TV show's discount shopping tips rile industry
By Clint Engel -- Furniture Today, March 10, 2002
HIGH POINT — Can consumers shop North Carolina discounters and outlet stores to get 40% to 75% off the prices they'd pay at their hometown furniture stores? An NBC "Today" show segment last week said they could, and that has raised the ire of some manufacturers and retailers.
Retailer associations, two manufacturers named in the story, and industry analyst Jerry Epperson say the segment was inaccurate.
Still, it's not the first time this has happened. For some reason — unrealistic list prices, or maybe a general mistrust of the industry — the consumer press seems to take turns focusing on deals, real or otherwise, in North Carolina. And some say the industry has asked for it.
In the March 4 segment, host Matt Lauer interviewed consumer author Kimberly Causey as she stood in front of retailer Furnitureland South here.
"If you're talking about legitimate, factory-owned, factory outlets, you're going to be saving 60 to 75% off of the prices your local retailer will charge you for the very same furniture in perfect new, first-quality condition," Causey said.
At "deep discounters," she said, consumers can still save 40% to 50% off retail if they order by phone, using item numbers they obtain from a local retailer.
"She's just misleading the public," said Epperson, managing director of Mann, Armistead & Epperson in Richmond, Va. "She's telling them something inaccurate in order to sell a $25 book (Causey's "The Furniture Factory Outlet Guide 2002 Edition")."
Most critics of the piece said Causey appeared to be using manufacturers' suggested retail prices or list prices as if they were what retailers usually charge.
"I'd like to ask her if she ever paid sticker price for a car," Epperson said.
And while he agrees there are deals at outlet stores, he said they typically sell seconds, returned and damaged goods or discontinued items.
Chris Pfaff, president of Thomasville Furniture Inds., a brand featured as an outlet storefront along with sister company Drexel Heritage, said the segment abused the Thomasville name.
"This was about as bad a piece of journalism as I have heard about," he said, adding that he has referred the issue to the company's legal counsel.
The segment also showed an image of Hickory White's Genesis dining room group. Causey said a regular retail store charged $20,576 for the set, a deep discounter $10,576, and an outlet store $7,345, or 64% off retail.
Hickory White President Randy Austin said the show's producers have "misinformed their viewers. This lady has led them to believe something that is not true." He said the outlet price sounded reasonable, "but if it was in the outlet store, it's not first quality" as Causey claimed outlet furniture was.
In an e-mail responding to the complaints, Causey said she used Hickory White's suggested retail price for her $20,576 everyday retailer price, but said she believed the two basically were the same.
Austin noted that Hickory White has a minimum retail pricing policy, with the minimum set at about 45% less than Causey's "everyday" quote. Dealers across the country can sell anywhere between the list and the minimum price. And during sale periods, retailers can go up to 50% off of list.
He added that factory outlets don't sell below minimum retail "unless it's distressed goods. It's not our intent to undermine dealers. That would defeat the whole concept of the outlet store."
Causey said the collection shown on "Today" was in Furnitureland South for $10,576. She said she found the identical set about two years ago at an outlet.
"It was a showroom sample in perfect condition," she said.
Steve DeHaan, executive vice president of the National Home Furnishings Assn., said he had heard a few complaints about the segment. He said average industry margins are in the 43% to 44% range, so Causey is suggesting that discounters or outlets are selling for less than the wholesale price, which doesn't make sense.
"For better or for worse, retailers don't sell at that (suggested retail price)," added Jim Gabbert, an NHFA executive committee member and chief executive officer of Minneapolis-based Gabberts.
"They discount 30, 35, 40%. So now you're talking about 40% off at retail vs. a deep discounter's 40, 45 to 50% off. These differences between retailers and the outlets are fictitious, and it's just too bad that people, authors and media buy into that deceit," he said.
Still, the industry has little room to complain, he said.
"We brought it upon ourselves. With retailers perpetually pressuring manufacturers to increase their price list markup so that retailers could advertise ever increasing percent discounts, that strategy … has come back to haunt us," he said
"Furniture retailers' advertising has created the delusion that makes such outrageous statements made in this report plausible," Gabbert said. "Shame on us."
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