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On your mark, reset
Sales and marketing executives are sharpening their pencils for the retail resets that start in March. This round of proposals figures to be as competitive as any in recent years, given the relatively sluggish retail economy over the past 18 months.
The pressure is on to provide more function and more fashion at an even better price. That may not sound like a big change from past resets, but producers say they anticipate some tough competition for retail slots.
The Kmart conundrum
Kmart is operating as debtor-in-possession after filing Chapter 11 late last month. The direct exposure for furniture factories — O'Sullivan and Dorel's Ameriwood — appears to be minimal compared with other merchandise categories, such as groceries and apparel.
However, if Kmart doesn't make it — and right now everybody is being supportive and positive so nobody is saying the company won't survive — the loss of another retail outlet for flat-pack furniture would be a blow for all producers, not just those supplying Kmart.
Nobody wants to be caught without a chair when the music stops, and several chairs have been removed from the game in the last several years — Bradlees, Caldor, Service Merchandise, Wards, etc.
A waking opportunity
All the major factories pumped up the volume in the bedroom category last year, and now, as that product finds its way to retail floors, it's time to see if that category can do more than sleepwalk. The opportunity seems obvious, with dwindling competition from assembled furniture manufacturers at promotional price points. However, discounters don't like cumbersome headboards, so RTA bedroom will have to earn its growth props through home furnishings stores.
How good is solid wood?
It's growing on trees: As price distinctions blur between some imported wood furniture and domestic panel processing, you can expect to see more and more wood ready-to-assemble furniture around in RTA showrooms.
Several niche players such as American Moulding & Millworks and Canwood have successfully demonstrated that the niche exists, supplying catalogers and specialty retailers, and a couple of big boys have been playing around with it, too, notably O'Sullivan and Sauder. More important, real wood is a value that consumers understand, which is why discounters continue to expand their selection of traffic items and other forms of promotional wood furniture.
Rebounding retail
Strong recent comp-store sales at Wal-Mart, Target, Circuit City and Best Buy, among others, seem to suggest that retail may be bouncing back. The numbers aren't as vigorous as the heyday of 1999 and early 2000, but they provide hope for a revitalized 2002.
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