As tech stocks slid into the close of market on Monday afternoon, Wayfair Inc. (NYSE: W) was hurt worse than most, losing more than 5.5 percent off a market capitalization of nearly $10 billion.
The drop was most likely related to the news that Amazon.com Inc. (Nasdaq: AMZN) is launching a new in-house furniture brand, potentially bringing the e-commerce giant into more direct competition with Wayfair. The news was reported mainly in trade publications.
The new Amazon brand, called Ravenna Home, will reportedly launch with more than 300 items, mostly focused on living room furniture and decor. The move comes just a month after the last indication that Amazon would be increasing its focus on furniture, when it launched Scout, a site that collects data about shoppers' furniture preferences and then offers personalized recommendations. Last year, Amazon launched its first two in-house furniture brands, Rivet and Stone & Beam.
After a six-month run earlier this year in which Wayfair saw its stock price more than double to $149, the company's shares have fallen more than 30 percent since a peak in September.
Wayfair, like Amazon, has been searching for new ways to improve the experience of buying furniture online. The company is especially focused on augmented-reality tools to help people visualize what a piece of furniture will look like in their home. Earlier this month, the company announced it would operate two temporary "pop-up" stores — one at the Natick Mall and one at the Garden State Plaza in New Jersey.
Despite the perceived threat from Amazon, Wayfair has been growing rapidly across most metrics. The company now employs roughly 9,700 people, up from 5,600 at the end of 2016. Revenue topped $1.6 billion in the second quarter, up nearly 50 percent from a year earlier. The company is scheduled to release its third-quarter earnings on Nov. 1.