Tough times as Focus on Furniture is the latest retailer to lose tens of millions - as expert reveals why Aussies are turning away from big purchases

By CAITLIN POWELL - NEWS REPORTER and AUSTRALIAN ASSOCIATED PRESS Published: 23:01, 13 July 2026 | Updated: 23:02, 13 July 2026 Popular homewares retailer Adairs has seen its growth overshadowed by the poor performance of Focus on Furniture, prompting warnings from experts about the ongoing impacts of the cost-of-living crisis.  Adairs Limited published a trading update for the 2026 financial year to the ASX on Wednesday, revealing its flagship business and the brand Mocka grew, but its Focus on Furniture business was struggling. The company warned it would book a non-cash impairment charge of between $62million and $68million against Focus on Furniture.  This would contribute to an expected statutory net loss after tax of about $43million. Adairs and Mocka units delivered 'pleasing growth' and trade remained positive, but Focus on Furniture's performance had declined in the latter half of the year, according to the statement. 'The business is transitioning under new management, and trading has been subject to more aggressive competitor promotional activity,' it said. Adairs said operational changes at Focus on Furniture would lay the groundwork for improved performance in the next financial year. 'This is a direct impact of the cost-of-living crisis,' retail expert Professor Gary Mortimer told the Daily Mail, when asked about the disparity in performance. Popular homewares retailer Adairs has seen its growth overshadowed by the poor performance of its subsidiary Focus on Furniture Retail expert Professor Gary Mortimer (pictured) said a key reason for its poor performance compared to the growth of Adairs' flagship business was the cost of living crisis 'When you think about throw rugs and cushions and home decoration, families are still willing to go out and spend a few dollars making over their lounge or bedroom.  'But when we think about couches or dining room tables, we're talking in the thousands of dollars.  'People are less willing to spend that much money, particularly at this economic time.' Professor Mortimer, a researcher at Queensland University of Technology (QUT), acknowledged the strong competition facing Focus on Furniture had also been a significant factor. 'When it comes to furniture, when there's declining demand but you still have a competitive marketplace, it generally tends to be the strong competitors that can fund discounts and promotions that will help them survive,' he said. 'Nick Scali, for example, seems to always have a sale on every month, so it's very hard to compete against a big player with deep pockets that can fund promotions.' Professor Mortimer also compared the situation to Barbeques Galore, which announced store closures in June. 'People were asking whether they really needed to spend $1,000 on a barbecue,' he said. Professor Mortimer said people are happy to decorate their homes but less willing to invest in larger pieces of furniture which cost more (Pictured, a customer at Adairs) 'You've also got those macroeconomic issues. We've got a housing crisis, fewer homes being built and, as a direct result, there's less demand for large furniture items. 'Aussie families are very focused on paying their rent or mortgages, putting fuel in their car and putting food on the table. 'Whatever remains at the end of the month may go towards utility bills or insurance costs that keep rising, but you are less likely to buy a new sofa or dining room table.' Professor Mortimer said the diminished consumer behaviour could be expected to continue for up to a year. 'I think consumers are very sensitive to what the RBA might do with inflation and with interest rates in the coming six to 12 months,' he said. 'I think the CEOs of Coles and Woolworths have both flagged food price increases over the next six to 12 months. 'As consumers, we are very sensitive to rising prices and the cost of living, and families are looking to cut costs where they can. One of those areas is major purchases, whether it's whitegoods or furniture.' Adairs bought Focus on Furniture for $80million in 2021 to expand its presence in the furniture market. In October, Adairs' chief executive Elle Roseby said Focus on Furniture had underperformed over the previous two years and ongoing promotions had failed to deliver a turnaround The challenges facing the subsidiary are not a surprise after Adairs Limited's annual general meeting in October last year also highlighted its struggles. Chief executive Elle Roseby said Focus on Furniture had underperformed over the previous two years, and ongoing promotions had failed to deliver the turnaround executives had hoped for. 'The value proposition of the business is sound, but it needs a refresh in certain areas - not a dramatic repositioning,' she said. The company has added two executives to its leadership team and accelerated store upgrades, with three to five refurbishments planned over an 18-month period, she said. Adairs also announced earlier this year that it had made the 'difficult decision' to cease operations in New Zealand as part of a reset strategy. It is understood recent financial losses had led to the stores being commercially unviable. Professor Mortimer said the decision may have been difficult but it was a 'smart, strategic' move. 'Sometimes, in order to grow, you need to shrink,' he said.  'Removing some businesses or geographic markets that are operating at a loss can leave you with a smaller business, but a much more profitable one. 'We've seen the same with Myer and David Jones closing stores where they can exit leases, resulting in a smaller store network but a more profitable business.'