Sources drop 'froufrou' to increase value
By Joan Gunin -- Furniture Today, January 26, 2009
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Opportunities exist
HIGH POINT — Leather upholstery resources catering to the high end are working hard to come up with new approaches to spur business for themselves and their customers.
Like everything else, business at the high end has been slowed due to the slumping economy. And even at the high end, today's customers demand value — and manufacturers are striving to give them what they want.
In some cases, this means less “froufrou” or embellishment, a lesser-grade hide or smaller scaling.
Some upscale producers are grateful to be generating add-on business from contract work and the design trade.
At Century, Phil Brown, merchandise manager for leather and chairs, described these times as “challenging.”
The company plans to limit the number of SKUs it presents at the High Point Market in April.
“We have scaled back a bit,” Brown said. “Our focus is on getting out in front of customers more and training sales associates.”
This market, Century's upholstery introductions include “more finely proportioned frames,” Brown said — measuring from 80 to 84 inches instead of the usual 92 to 98 inches.
“We still have a lot of large-scale sofas in the line but people are toning it down,” Brown said. “It's not as flashy as it has been in the past.”
Century is putting more emphasis on training, Brown said, to make sure its sales reps are “familiar with all of the features, trims and options we offer. This strategy is an ongoing process.”
The company also is conducting in-store leather education seminars for retail salespeople.
In terms of the outlook for business, Brown said “there is uncertainty but I think things will improve. It is just a matter of when.”
At Zagaroli Classics, President Todd Zagaroli said the company is working to deliver orders in six to eight weeks — quicker if possible.
“We're all about our customers,” he said, adding that the company is keeping its designs simple and not doing as many embellishments as it used to.
To shave costs, some customers are asking Zagaroli for mid-grade leathers but with something extra like a glossy sheen, he said.
But the upscale crowd has its limitations.
“Those matte leathers with pigmented stuff (at the lower end) won't appeal to our customers,” Zagaroli said.
Zagaroli's most effective tool in the current environment is e-mail. Striving to communicate with sales representatives and to stay in contact with designers, Zagaroli transmits regular “Z-blasts” via computer.
Be it a sketch, a special message or a market invitation, Zagaroli is relying heavily on electronic communication.
“With our reps, we can see who pulls (the message) up and forwards it,” he said. “We are trying to mine more lists and become more aggressive with direct marketing and do our part to get those e-mails out so when our reps visit, their customers are prepared.”
The Z-blasts also are saving money.
“We are doing more (messaging) electronically so that we don't get bogged down by catalog costs,” Zagaroli said, crediting his wife, Cecily, director of merchandising, for designing the Z-blasts.
“Electronic communication for us is the only way we can communicate,” Zagaroli continued. “With a limited budget for marketing as an Achilles heel, we instead use these e-mails as a sales aid.”
Opportunities exist
While business has been “fairly consistently bad,” Zagaroli said he is taking on more private-label, custom and contract work.
“There is a lot of opportunity there,” he said.
At the April market, Zagaroli will offer more styles that “blur the line between traditional and transitional,” with a wide range of leather and fabric options offered on single frames.
Classic Leather's strategy for its high-end retail and interior design customers continues to be customization.
“Whether it's a frame created on CAD software or scribbled on the back of a napkin, as a manufacturer with frame shop capabilities and cushioning fabrications, we can accommodate that type of project,” said National Sales Manager Guy Holbrook.
For such special requests, Classic Leather typically applies an upcharge and asks for longer lead times. “The customer with discerning taste is willing to do that,” Holbrook said.
And despite the economy, Holbrook said he is seeing strength in independent retailers, especially family-owned businesses.
“They are running better, with leaner budgets and a better eye on the bottom line. These smaller organizations can more easily identify where the costs and problems are and adjust accordingly.”
Holbrook expressed optimism about the new Obama administration but said, “You can't wave a magic wand. It's going to take a collaborative effort” to get the economy back on its feet.
David Hicks, national sales manager for Hooker's Bradington-Young upholstery division, agreed. “It's a waiting game,” he said about prospects for recovery.
Although its dealer base continues to do well with certain best-selling frames at standard pricing, Bradington-Young is offering discounts on select frames to spark additional business.
“Everyone is much more value-oriented,” Hicks said. “Consumers are being much more frugal.”
This means consumers are not inclined to buy the highest grade of leather or the most expensive frame available.
“It does not have to be the top of the line. Consumers are taking a closer look and being more frugal.”
