💼 Credit & Sales Can’t Afford to Be Adversaries: Why Alignment Drives Profit in the Home Furnishings Industry
By David Johnston, Vice President and General Manager Furniture Manufacturers Credit Association (FMCA)
Executive Summary
Credit-sales alignment isn’t just helpful—it’s essential in today’s volatile home furnishings market.
Disconnected teams miss red flags, write off receivables, and claw back commissions.
Generic tools aren’t enough—industry-specific insight and action from FMCA are mission-critical.
In today’s relationship-driven but risk-heavy home furnishings market, success depends on more than beautiful products and competitive pricing. It requires total alignment between credit and sales.
Because alignment isn’t just helpful—it’s essential. And alignment without furniture-specific visibility is incomplete.
Sales teams grow relationships. Credit protects them. When they collaborate—with the right tools and insight—companies grow confidently and collect fully.
The High Cost of Misalignment
Furniture retailers are often undercapitalized, independent, and vulnerable to economic swings. Many may appear healthy while quietly teetering on insolvency.
Despite this, most suppliers invest heavily in sales—showrooms, reps, events—but underfund credit, leaving it under-resourced and under-leveraged.
This imbalance creates blind spots. And in this industry, blind spots become write-offs.
Alignment doesn’t slow down the business—it protects it.
🌪️ Economic Headwinds Are Intensifying Risk
In the current climate, home furnishings suppliers face mounting economic headwinds:
📈 New tariffs on imported goods increasing landed costs
💳 Higher interest rates straining consumer financing and retail liquidity
📉 Softened discretionary spending from inflation fatigue
Each of these factors puts additional strain on already fragile retailers—making them more likely to delay payments, overextend credit, or suddenly fail.
In this environment, generic credit data isn’t enough. You need fast, actionable, furniture-specific insight—and alignment between sales and credit—more than ever.
🤝 The “Us vs. Them” Mindset Is Dangerous
Sales wants to close deals. Credit wants to manage risk. But when these priorities clash instead of align, everyone loses.
Approvals get delayed
Risky accounts get through
Customer experience suffers
In today’s environment, the “us vs. them” mindset between departments is outdated—and dangerous. The smartest companies align early, often, and intentionally.
And when alignment is backed by industry-specific credit intelligence, results improve across the board.
Alarming Default Rates Are a Red Flag
As of May 2025, U.S. private credit default rates hit 4.6%, up from 4.4% in April and matching late-2024 highs (Fitch Ratings). Furniture and home furnishings are among the most impacted.
Additionally, Kroll Bond Rating Agency (KBRA) reports that 5% of middle-market borrowers are showing distress—particularly in retail, housing, and furnishings (WSJ).
In May 2025, discretionary retail default rates climbed to 4.6%, making it the riskiest sector in the private credit market. That’s well above the all-industry average and reflects increasing instability among non-essential retailers—including furniture chains.
This is especially concerning for home furnishings suppliers, who are often unsecured creditors—meaning they have little to no recourse or asset claim if a retailer collapses. Without visibility and alignment between sales and credit, that risk multiplies.
ℹ️ What Is Private Credit?
Private credit refers to loans issued by non-bank lenders—like private equity firms or direct lending funds. These loans often go to riskier borrowers and lack public reporting.
Why it matters: Defaults in this space are often invisible in generic credit reports—until it’s too late.
That’s why industry-specific insight from sources like FMCA is so important: it fills the gaps traditional bureaus miss.
💬 A Member’s Perspective on Credit-Sales Partnership
🗣️ “Over my career I’ve seen my fair share of newsworthy events: the housing market crash in 2008, the Covid-19 pandemic in 2020, and most recently the uncertainty in the current economy, all of which greatly impact the furniture industry. After joining our credit team nearly 10 years ago, I’ve come to learn how credit professionals are an integral role in lessening the impact these types of events have on a company. Early on I remember being amazed at how more senior team members seemed to ‘know what to do.’ I would often think ‘this isn’t something you can learn from a book; you have to experience it or learn from someone who has experienced it.’ And for some, having to learn in such a manner can be a daunting task. However, beyond my coworkers, I have a wonderful network through FMCA to help with that. FMCA’s members are a diverse group, encompassing a wide variety of product types and lines, which offers members the opportunity to form professional relationships to further both personal and professional growth. Coupling that with the services that FMCA offers, whenever I see a troubling trend, or am looking to support sales, my first stop is FMCA for up-to-date credit information. I am incredibly thankful I have this resource at my fingertips or a phone call away.” — Heather Gratowski, Credit and Collections Analyst II, La-Z-Boy Incorporated
🏚️ Recent Bankruptcies: A Wake-Up Call
Feb 2024: The RoomPlace files Chapter 11, liquidates 26+ showrooms
Jun 2025: At Home Group begins restructuring — 26 closures ongoing
Each collapse left suppliers exposed—often with no warning and no payment.
🚨 Retailer Behavior: What Sales Sees First
Retailers may:
Quietly change ownership
Request higher limits to support risky expansion
Increase orders during instability
Stretch payments across vendors
Sales reps often see red flags first—new leases, store rebranding, expansion talk. Credit teams see payment trends, slowness, or vendor alerts.
When those two views are aligned—and bolstered by FMCA data—suppliers can act early, not react late.
🛡️ Internal Sharing Is Legal—and Essential
Can credit and sales share customer risk info internally? ✅ Yes. Internal sharing is completely legal and necessary.
Antitrust laws restrict data sharing between competitors, not within companies. FMCA also ensures external sharing is done under a compliant, structured framework.
The risk isn’t in sharing—it’s in not sharing.
💵 When Commissions Are Paid Before Payment, Credit Becomes Critical
Many companies pay commissions at invoice—not payment. That means if a customer defaults, the rep’s hard-earned commission is clawed back.
That creates tension—and makes credit action time-sensitive.
Tools like FMCA Final Demand Notices often prompt payment or a resolution, protecting both the sale and the commission. But if that doesn’t work…
FMCA is also a collection agency for its members—offering industry-low contingent rates. When Final Demand Notices don’t get results, FMCA can step in professionally and efficiently to recover what’s owed.
⏱️ Credit Empowers Sales to Work Smarter
When aligned, credit helps sales:
🚦 Avoid uncollectible accounts early
📌 Focus on scalable, healthy retailers
🔍 Identify risk shifts before they escalate
And when those credit teams have access to furniture-specific data through FMCA, the results speak for themselves.
🧩 Why FMCA?
FMCA isn’t just another credit tool—it’s purpose-built for the furniture and accessories industry. Members gain:
🛎️ Early alerts from fellow suppliers
📊 Real-world trade data and payment trends
📨 Final Demand Notices that drive responses
💼 Collection support with industry-low contingent rates
🧠 Peer collaboration through compliant credit interchange
If a retailer is under strain, FMCA’s network will usually know it first.
✅ Final Thought: Alignment Isn’t Optional
Alignment between credit and sales isn’t just helpful—it’s essential. And in the home furnishings industry, alignment means working from industry-specific intelligence—not generic reports.
That’s why FMCA isn’t just a helpful resource—it’s your frontline defense.
📣 Take Action
If you’re not already aligning your sales and credit teams—or equipping them with furniture-specific credit intelligence—now’s the time.
Because in this industry, you can’t afford to get paid late—or not at all.
⚠️ Note:
This article addresses business-to-business (B2B) commercial credit practices in the home furnishings and accessories supply industry. It does not pertain to consumer credit, which is governed by laws such as the Fair Credit Reporting Act (FCRA).
📘 Disclaimer:
FMCA (Furniture Manufacturers Credit Association) is not a law firm, and this article should not be considered legal advice. Please consult qualified legal counsel for guidance on compliance or regulatory matters.
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Credit & Sales Can’t Afford to Be Adversaries: Why Alignment Drives Profit in the Home Furnishings Industry
💼 Credit & Sales Can’t Afford to Be Adversaries: Why Alignment Drives Profit in the Home Furnishings Industry
By David Johnston, Vice President and General Manager
Furniture Manufacturers Credit Association (FMCA)
Executive Summary
Credit-sales alignment isn’t just helpful—it’s essential in today’s volatile home furnishings market.
Disconnected teams miss red flags, write off receivables, and claw back commissions.
Generic tools aren’t enough—industry-specific insight and action from FMCA are mission-critical.
In today’s relationship-driven but risk-heavy home furnishings market, success depends on more than beautiful products and competitive pricing. It requires total alignment between credit and sales.
Sales teams grow relationships. Credit protects them. When they collaborate—with the right tools and insight—companies grow confidently and collect fully.
The High Cost of Misalignment
Furniture retailers are often undercapitalized, independent, and vulnerable to economic swings. Many may appear healthy while quietly teetering on insolvency.
Despite this, most suppliers invest heavily in sales—showrooms, reps, events—but underfund credit, leaving it under-resourced and under-leveraged.
This imbalance creates blind spots. And in this industry, blind spots become write-offs.
🌪️ Economic Headwinds Are Intensifying Risk
In the current climate, home furnishings suppliers face mounting economic headwinds:
📈 New tariffs on imported goods increasing landed costs
🏗️ Slowing housing starts reducing furniture demand
💳 Higher interest rates straining consumer financing and retail liquidity
📉 Softened discretionary spending from inflation fatigue
Each of these factors puts additional strain on already fragile retailers—making them more likely to delay payments, overextend credit, or suddenly fail.
🤝 The “Us vs. Them” Mindset Is Dangerous
Sales wants to close deals. Credit wants to manage risk. But when these priorities clash instead of align, everyone loses.
Approvals get delayed
Risky accounts get through
Customer experience suffers
In today’s environment, the “us vs. them” mindset between departments is outdated—and dangerous. The smartest companies align early, often, and intentionally.
Alarming Default Rates Are a Red Flag
As of May 2025, U.S. private credit default rates hit 4.6%, up from 4.4% in April and matching late-2024 highs (Fitch Ratings).
Furniture and home furnishings are among the most impacted.
Additionally, Kroll Bond Rating Agency (KBRA) reports that 5% of middle-market borrowers are showing distress—particularly in retail, housing, and furnishings (WSJ).
ℹ️ What Is Private Credit?
Private credit refers to loans issued by non-bank lenders—like private equity firms or direct lending funds. These loans often go to riskier borrowers and lack public reporting.
Why it matters:
Defaults in this space are often invisible in generic credit reports—until it’s too late.
That’s why industry-specific insight from sources like FMCA is so important: it fills the gaps traditional bureaus miss.
💬 A Member’s Perspective on Credit-Sales Partnership
🗣️ “Over my career I’ve seen my fair share of newsworthy events: the housing market crash in 2008, the Covid-19 pandemic in 2020, and most recently the uncertainty in the current economy, all of which greatly impact the furniture industry.
After joining our credit team nearly 10 years ago, I’ve come to learn how credit professionals are an integral role in lessening the impact these types of events have on a company.
Early on I remember being amazed at how more senior team members seemed to ‘know what to do.’ I would often think ‘this isn’t something you can learn from a book; you have to experience it or learn from someone who has experienced it.’ And for some, having to learn in such a manner can be a daunting task.
However, beyond my coworkers, I have a wonderful network through FMCA to help with that. FMCA’s members are a diverse group, encompassing a wide variety of product types and lines, which offers members the opportunity to form professional relationships to further both personal and professional growth.
Coupling that with the services that FMCA offers, whenever I see a troubling trend, or am looking to support sales, my first stop is FMCA for up-to-date credit information. I am incredibly thankful I have this resource at my fingertips or a phone call away.”
— Heather Gratowski, Credit and Collections Analyst II, La-Z-Boy Incorporated
🏚️ Recent Bankruptcies: A Wake-Up Call
Feb 2024: The RoomPlace files Chapter 11, liquidates 26+ showrooms
Jul 2024: Conn’s HomePlus files Chapter 11, shutters 100+ stores
Jun 2025: Factory Mattress (Austin, TX) declares Chapter 11
Jul 2025: American Mattress files Chapter 11 — 52 stores closed
Jun 2025: At Home Group begins restructuring — 26 closures ongoing
Each collapse left suppliers exposed—often with no warning and no payment.
🚨 Retailer Behavior: What Sales Sees First
Retailers may:
Quietly change ownership
Request higher limits to support risky expansion
Increase orders during instability
Stretch payments across vendors
Sales reps often see red flags first—new leases, store rebranding, expansion talk.
Credit teams see payment trends, slowness, or vendor alerts.
🛡️ Internal Sharing Is Legal—and Essential
Can credit and sales share customer risk info internally?
✅ Yes. Internal sharing is completely legal and necessary.
Antitrust laws restrict data sharing between competitors, not within companies.
FMCA also ensures external sharing is done under a compliant, structured framework.
💵 When Commissions Are Paid Before Payment, Credit Becomes Critical
Many companies pay commissions at invoice—not payment. That means if a customer defaults, the rep’s hard-earned commission is clawed back.
That creates tension—and makes credit action time-sensitive.
Tools like FMCA Final Demand Notices often prompt payment or a resolution, protecting both the sale and the commission. But if that doesn’t work…
⏱️ Credit Empowers Sales to Work Smarter
When aligned, credit helps sales:
🚦 Avoid uncollectible accounts early
📌 Focus on scalable, healthy retailers
🔍 Identify risk shifts before they escalate
And when those credit teams have access to furniture-specific data through FMCA, the results speak for themselves.
🧩 Why FMCA?
FMCA isn’t just another credit tool—it’s purpose-built for the furniture and accessories industry.
Members gain:
🛎️ Early alerts from fellow suppliers
📊 Real-world trade data and payment trends
📨 Final Demand Notices that drive responses
💼 Collection support with industry-low contingent rates
🧠 Peer collaboration through compliant credit interchange
If a retailer is under strain, FMCA’s network will usually know it first.
✅ Final Thought: Alignment Isn’t Optional
Alignment between credit and sales isn’t just helpful—it’s essential.
And in the home furnishings industry, alignment means working from industry-specific intelligence—not generic reports.
📣 Take Action
If you’re not already aligning your sales and credit teams—or equipping them with furniture-specific credit intelligence—now’s the time.
Because in this industry, you can’t afford to get paid late—or not at all.
⚠️ Note:
This article addresses business-to-business (B2B) commercial credit practices in the home furnishings and accessories supply industry. It does not pertain to consumer credit, which is governed by laws such as the Fair Credit Reporting Act (FCRA).
📘 Disclaimer:
FMCA (Furniture Manufacturers Credit Association) is not a law firm, and this article should not be considered legal advice. Please consult qualified legal counsel for guidance on compliance or regulatory matters.
This article was created with AI support and human oversight. © 2025 FMCA. All rights reserved.