Share this on
HIGH POINT — Leather still retains its lofty position in terms of stationary upholstery sales. In a year that saw the U.S. marketplace first buffeted by dismal fiscal returns and then rocked by the terrorist attacks of Sept. 11 and its aftermath, leather continued to chug along. The product category continues to track upward at retail, although at a somewhat toned-down pace.
Leather upholstery manufacturers, while waiting for the U.S. economy to turn the corner in mid-2002, are in unanimous agreement that leather will retain its retail sparkle with consumers.
Stationary leather upholstery represents approximately one-fourth of estimated retail upholstery sales in the United States. Despite fluctuations in sales and availability and pricing and hides, sales of leather this year spurred such producers as American Leather, Natuzzi, Legacy Leather and Natale to admit to double-digit sales growth.
Pricing has stabilized now, and the pace has slowed, but various manufacturers who were asked to comment on business in 2001 and look ahead toward 2002, expressed optimism.
A pleasantly surprised Cary Benson, American Leather vice president of sales and marketing, said the company would end this year on an up note. This year it scored a 12% increase in sales over 2000 and predicts another 12% spike in 2002.
"We had planned on 15%, but we've had to scale back our expectations a bit," Benson said. "We're still seeing growth but at a slower pace."
As for 2002, Benson suggests more of the same: "It will be difficult like this year, but there are still people out there buying furniture."
The aggressive Dallas-based producer has seen growth spurts due the popularity of its Comfort Sleeper sofa bed, featuring no bar, (15% of its sales) and its Style in Motion seating, featuring zero-wall clearance.
For 2002, American Leather will put a big push on consumer advertising in terms of both total dollars as well as percentage of sales. The promotional brand-driven advertising, including print and television, will roll out nationally, including spots airing on CNN, next month.
Survival of fittest
"We came through 2001 in darn good shape," said Johne Albanese, executive vice president and chief marketing officer for Natuzzi, which also recorded a double-digit increase for 2001 and expects the same in 2002.
A well-needed burst (or "correction") in consumer confidence during the first half of 2002 could push the economy to "really steam the second half of the year," Albanese said.
Leather is still growing, he said. "While it is difficult to get a handle on the exact percentage, we haven't seen any indications that it has flat-lined or reduced. Hopefully, the category will continue to expand."
The "calming down" of leather prices provides Natuzzi a window of opportunity to implement some creative pricing and marketing strategies. "We want to support our retailers through improved branding efforts," Albanese said.
For Natuzzi, 2002 will represent a year to execute several newly drawn creative strategies intended to uplift its gallery programs and support its retail partners. "We have a lot of initiatives on our plate," he added.
Business had its challenging moments this year, both earlier this summer and after the Sept. 11 terrorist attacks, said Dwight Hardison, vice president of marketing and merchandising for BenchCraft. "But we are seeing it coming back to acceptable levels. We have been very aggressive in our product offerings and sales."
BenchCraft's four-tiered leather program is merchandised to "interlock" from promotional to better pricing. Its ongoing leather business has experienced increases in its sales volume for leather, despite an otherwise flat stationary business.
Aside from "logical step-ups," Hardison foresees no major changes in BenchCraft's pricing levels. "We're going to keep on expanding where needed in programs and hides or styling. A few suppliers have bargains here and there, and we are going to take advantage of those offers. We're planning to have a better year next year."
Strong expectations
DeCoro USA enjoyed a wonderful year, according to Jeff Baron, president. "We are on the map now. Retailers seem to appreciate what we are doing and consumers are voting with their checkbooks. Our growth in 2001 was gratifying, and we expect 2002 to be even better."
Baron strongly disagreed at any suggestion concerning a slowing in leather sales. "I haven't seen any."
Looking toward 2002, Baron is elated to hear newscasters buzz about rejuvenated spending on home furnishings, since "our success depends on placements in retail stores."
"We are very proud of the commitments our existing, as well as new, retailers have made to us in the last two months which leads us to be very bullish in 2002," he said. "We expect to double our floor space."
Nicoletti enjoyed a good year despite the increase in leather prices early on. "We made a lot of placements in March and April," said Mauro Bracciale, U.S. sales manager, "so even though what happened the second half of year, we were already in good shape."
Nicoletti recorded U.S. sales of $30 million in 2000 and is expecting to end 2001 at $65 million, Bracciale said. "If all goes well, because of the recession, we hope we can increase 20% or 30% for next year."
At Legacy Leather, Inayat Vasta, comptroller, indicated the economy will "still remain a little soft" heading into 2002 but predicts a turnaround this summer. "The highly-leveraged people will have a difficult time to go through a mini-recession," Vasta said.
Canadian-based Legacy, which ended its fiscal year in October 2001, recorded a growth of 61% for its U.S. and Canadian business, compared to a year ago. Legacy, which was reborn as a Canadian operation nearly five years ago, derives 90% of its business from the U.S. marketplace. "We are looking to grow 50% for fiscal 2002," he said. "We expect to reach the $30 million mark in 2002."
Vasta attributes the corporate growth to ongoing expansion along the eastern seaboard. "We are already in the West and the Midwest, and now we are heading east. We are picking up good independents."
Heading into 2002 means some system modifications for Legacy, which disbanded its cut-and-sew import operation in October in favor of its own in-house water-jet laser cutter. "We can better control the quality," Vasta said.
Sticking to strategy
Natale was also up significantly, with a 50% spike in sales over 2000. James Riddle, president of the U.S. division, called October "our best shipping month in history."
At Berkline, 2001 will end on the good side, following a year of ups and downs. "We are ending stronger than normal, based on a good market," said Martha Shafer, vice president of leather products for Berkline.
Looking toward fiscal recovery sometime after the first quarter or the first half of 2002, Shafer said, "We think furniture will be okay because people will stay home."
In April, Berkline inaugurated a stationary leather program as a companion to its recliner/motion lines. Now, advancing another step, the Tennessee-based manufacturer is seeing results from its new Asian import program. Berkline is carrying four groups of finished product from Asia. The new lower-priced Solano collection serves to bridge a pricing gap, she said.
Campbell Leather Sales, which imports finished leather frames from Italy, recorded additional growth in 2001, but 2002 will prove "a breakout year for us," said Happy Wade, vice president of sales and national sales manager. "We are gearing up our warehouse for tremendous growth opportunities."
Campbell, which added Gold Comfort and CIAC to its existing Mantellassi offerings, is currently negotiating with yet a fourth producer. "We are sticking to our niche of quality craftsmanship priced lower than you'd expect," Wade said.
Campbell this year built a national sales force (48 states), as well as adding national chains and private label programs to its leather repertoire.
In 2001, Campbell will exhibit at the Tupelo Furniture Market for the first time. The company's 10-frame offering will feature Gold Comfort's wood-trimmed Kingston, redressed in Anilina, a new luxe cover set to retail at $1,995.
| Coja, the Canadian producer of this three-over-three nailhead frame seeks to benefit from a more streamlined manufacturing process in 2002. |
| Chateau d'Ax was among those manufacturers experiencing a stable business environment in 2001, despite fluctuations in the retail marketplace. |
| Natale, which manufactures a series of Italian-made frames, is poised to expand its retail customer base of national independent accounts in 2002. |
| In 2002, American Leather will emphasize its brand image with a national TV advertising campaign. The series of 30-second spots produced by Lance Benefield of Scottsdale, Ariz., begin airing next month. |
Share this on
-
Upholstery makers have hopes up high
Feb 6, 2012 -
Leather upholstery players' moods mixed
Oct 19, 2008 -
Bonded leather making inroads
Sep 3, 2011 -
Leather sofa sources expect price increases
May 2, 2011
Most Viewed Articles
Sponsored Links
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
