At Home Expects 'immaterial' Financial Impact From Proposed Tariffs

- Jul 21, 2018-

PLANO, Texas — Home furnishings superstore At Home Group is the latest retailer to come out saying the proposed 10% tariffs on Chinese imports would affect part of its merchandise mix but expects any financial impact would be "immaterial."

That's because of the 164-store retailer's international sourcing flexibility and ability to adjust pricing, in certain cases without hurting its value proposition, it said.

“The company has evaluated the list released by Office of the U.S. Trade Representative and believes that a portion of its home furnishings and accent décor would be impacted by the proposed tariffs to the extent sourced from China,” the Plano, Texas-based retailer said in a statement.

“The company does not believe that the tariffs, if adopted as proposed, would have a material impact on its fiscal 2019 and fiscal 2020 financial results. At Home has an efficient and diverse supply chain with a significant number of product partners in China, the United States, Hong Kong, Belgium, Taiwan, India and Vietnam, as well as more recent partnerships in Turkey, Indonesia, Mexico and Malaysia.”

At Home also has established a program of direct factory purchases rather than purchasing through agents or trading companies “to improve international sourcing flexibility, reduce product costs, increase supply chain diversity and broaden the company’s access to unique and quality products,” it said.

“At Home intends to continue to work with its product partners and leverage its flexible supply chain and growing scale to help offset the impact of proposed tariffs while maintaining its competitive position.”

Also, the retailer’s low average selling price of $15 and average ticket of $65 should give it the ability, in some circumstances, to raise prices “without materially affecting its overall customer value proposition,” it said.

The company said it will provide further updates next month in conjunction with its fiscal second quarter earnings conference call.

Last week, the U.S. Trade Representative proposed a 10% tariff on $200 billion in Chinese imports — including a long list of finished furniture and home furnishings components.

Luxury home furnishings retailer RH came out with a statement later in the week stating that its mix of products coming from China will be decreasing through 2019, though news reports on how much product was actually coming from China had been inaccurate.

The Corte Madera, Calif.-based retailer also indicated its buying power and potential sourcing shifts would limit the impact of any new tariffs should they be imposed.