Home Decor Business Overview

Home decor retailers sell decorative items, furnishings, and accessories that enhance living spaces. These stores help customers beautify their homes with products ranging from small accent pieces to larger statement items. The merchandise mix typically includes kitchenware, textiles, small appliances, fixtures, wall art, mirrors, lighting, seasonal decorations, throw pillows, area rugs, curtains, bedding, and other decorative accessories.

The common business models in home decor retail include:

• Traditional Retail Store: Physical locations displaying curated collections of home decor items and accessories for in-store shopping
• Online Retailer: Digital platforms selling home decor products directly to customers through websites and mobile apps
• Hybrid Store: Combination of physical stores and online sales channels to reach customers through multiple touchpoints

Related: Checklist To Start A Business

How Do Home Decor Stores Make Money?

Home decor stores generate their main income by purchasing products from manufacturers and wholesalers at wholesale prices and selling them to customers at retail prices. The typical markup ranges from 50% to 100% of the wholesale cost, though some premium or unique items may command higher markups.

Industry Statistics

Home decor stores sell home furnishing products through retail locations. This industry falls under NAICS code 44229 – Home Furnishings Stores. Here are some statistics that show how this industry performs:

Home Decor Industry Size & Growth: The home decor retail industry generated $69.5 billion in revenue last year, growing at an average rate of 1.7% annually over the past five years. The industry is expected to expand by 3.9% annually over the next five years, driven by increased housing starts and renovation activities. (IBISWorld)

Number of Home Decor Businesses: There are 53,100 home decor businesses operating retail locations across the country. Most stores are independently owned and operated, with the three largest companies controlling less than 20% of the market. The TJX Companies holds the largest market share, followed by Williams-Sonoma and Bed Bath & Beyond. (IBISWorld)

Home Decor Profit Margin: Home decor retailers typically see profit margins between 11% and 18%.

States with Most Home Decor Businesses: Home decor stores concentrate in states with large populations and high retail activity. California, Texas, Florida, and New York have the highest number of establishments, reflecting their larger consumer markets and retail presence. (U.S. Census Bureau)

Costs To Start a Home Decor Store

Starting a home decor store typically costs between $50,000 and $200,000. This range includes costs for both small boutique shops and larger retail spaces. There are several expenses to start this type of business, and here are some of the larger ones to plan for:

Retail Space: A retail location for a home decor store ranges from $2,000 to $8,000 per month in rent. This cost varies based on the location and size of the space. Most home decor stores need around 1,000 to 3,000 square feet to properly display their merchandise and create attractive room settings.

Initial Inventory: The starting inventory for a home decor store typically costs between $20,000 and $75,000. This includes a mix of small decorative items, textiles, wall art, lighting fixtures, and seasonal merchandise to fill the store and offer customers enough variety.

Store Fixtures: Display fixtures, shelving units, and storage equipment usually cost between $15,000 and $40,000. This includes display tables, wall-mounted shelving, glass cases, lighting fixtures, and storage solutions for excess inventory.

Point of Sale System: A complete point of sale system with hardware and software ranges from $2,000 to $5,000. This includes the main register, card readers, barcode scanners, receipt printers, and inventory management software.

These estimates provide a general idea of startup costs, but actual expenses will vary depending on location, store size, and inventory selection.