Lexington turns up heat on branding
By Jeff Linville -- Furniture Today, January 27, 2002
LEXINGTON, N.C. — Lexington Home Brands is building on recent sales increases by focusing more tightly on its stable of branded lines, with a further boost expected from new TV advertising, says President Bob Stec.
In addition to such stalwart collections as Bob Timberlake and Tommy Bahama, the century-old manufacturer and importer markets a bevy of other brand-name lines — Henry Link Trading Company, Nautica Home, Palmer Home, Smithsonian, Southern Living and Waverly. These brands make up 42% of sales now, Stec said, and should climb to about 80% eventually.
"We are an aggressive marketing company that happens to manufacture some of its products," he said.
The company, which has narrowed distribution considerably in recent years, now has more than 200 Lexington Home Retailers, stores with dedicated space for its brands. Orders from those stores were up 6.6% in 2001 over the previous year, Stec said, and shipments to them up 9%. By comparison, Lexington's shipments to other customers dropped 13%, bringing overall shipments down for the year.The first Bob Timberlake product hit retail floors a dozen years ago and has grown every year since, Stec said. Knockoffs abound, but consumers still want the name brand, he said.
Lexington's new consumer ads sell a lifestyle rather than just show product, he said. A new Tommy Bahama commercial focuses on a tropical island setting. A Timberlake ad evokes nature and a simpler way of life. After panning over the furniture, the tagline says, "Surround yourself with the things you love."
"All ads will be tagged with local dealers," said Stec. Commercials for Bob Timberlake, Tommy Bahama and Nautica will air in all regions on local TV and as spots on cable channels over the next few months.
Also, Lexington has printed the third edition of a consumer publication called "The Spirit of Home," which is published twice a year. The 34-page volume describes the brands, with emphasis on personal feelings and experiences, but also can be used as a tool to help sales representatives push the product. In addition, the company will continue to place ads in shelter books.
"Prior to 2000, Lexington Home Brands did very little consumer advertising," said Stec. "The number was substantial in 2000, increased again in 2001 and is planned (to go) up again in 2002."
He said annual advertising expenditures exceed $10 million.
"This does not include dollars spent by licensed brands to promote brands on their own," he said.
A new brand launched at premarket last September was Haley & Carter, based on a fictional artistic husband and wife. This brand will cover a variety of styles and take over all the products currently marketed under the Lexington name. Stec said furniture no longer will bear the company name.
At the October market, Stec said the company received "extremely positive response" to the brand concept and the products. The Haley & Carter line topped expectations by 15%, and Lexington now is shipping the products to stores. A second full collection will debut during premarket in March for shipping early in the third quarter.
Lexington was one of the Masco Corp. furniture companies spun off in 1996 to create LifeStyle Furnishings International. Under a breakup plan LifeStyle announced late last year, Lexington would be the sole furniture maker remaining under LifeStyle's aegis.
Lexington Furniture changed its name to Lexington Home Brands in March 2000 to better reflect its emphasis on branding.
Stec joined the company in July 1999 as executive vice president of sales and marketing, under then-President Jeff Young. Young resigned less than two months later. Over the next few months, Stec became both president and chief executive officer.
A number of top Lexington executives have left the company in recent years, and administrative, management and customer service people have been laid off. The Spruce Pine, N.C., plant was closed in October 2001 and work shifted to nearby plants in Davie and Davidson counties. A big youth bedroom factory is now scheduled for mothballing.
In the past three years, the company has moved from an open-distribution approach with over 8,000 accounts to more selective distribution with less than 2,000 accounts, Stec said.
"The plan is to do more business with more-comprehensive floor displays and better-trained floor salespeople in fewer strategically selected accounts," he said. Lexington also has shifted from a more rural focus to a greater focus on major metro areas and key markets.
| Stec |
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