What happened

Shares of online furniture retailer Wayfair (W -1.94%) have tanked today, down by 11% as of 1:20 p.m. EDT, after the broader market aggressively sold off. Ongoing coronavirus fears and a steep decline in oil prices are heightening concerns around the possibility of a global recession. Wayfair recently downplayed the potential impacts of the COVID-19 illness outbreak.

So what

While discussing fourth-quarter results with analysts last month, CFO Michael Fleisher said that Wayfair was not incorporating coronavirus risks into its outlook.

Wayfair logo

Image source: Wayfair.

The finance chief suggested that Wayfair's business model would be fairly resilient because customers will have plenty of alternatives:

The spread of the coronavirus and how impactful it might prove, if at all, is something we are keenly focused on. Our current guidance does not factor in any significant potential disruption due to the virus. We believe our marketplace model, where we offer vast selection to our customers, is an important mitigating factor for us. So, just over half of our suppliers' product is now manufactured in China.

Suppliers based in China have already been diversifying operations in response to tariffs imposed as part of President Trump's trade war, Fleisher added.

Now what

Still, a macroeconomic slowdown could potentially impact discretionary spending on furniture. Wayfair was expectedly more cautious in describing risks around suppliers in its 10-K annual report.

"As an example, the recent outbreak of the novel coronavirus (COVID-19) in China could adversely impact supplier facilities and operations due to extended holidays, factory closures and risks of labor shortages, among other things, which may materially and adversely affect our business, financial condition and results of operations," the company warned.