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La-Z-Boy Europe tightens market focus, broadens line

By Powell Slaughter -- Furniture Today, February 8, 2004

COLOGNE, Germany — La-Z-Boy Europe showed a broader product line and a tighter market focus at last month's market here to help spur business with the continent's retailers.

The two-year-old joint venture pairs La-Z-Boy's brand, marketing and product development expertise with the production capability and market familiarity of big German manufacturer Steinhoff.

"When we launched the program, we wanted to get retailers' attention, so we came in originally with very high-design product serving the high end of the market," said John Case, president of La-Z-Boy Branded Product.

"Now, we've filled the line from the upper end down," he said. "That high end had appeal, but it was not mass market. This Cologne market was really about filling in some critical price points from a merchandising standpoint."

At last year's Cologne market, La-Z-Boy Europe showed recliners and motion seating retailing mostly from 999 euro. This year, price points on about 40 SKUs started at 599 euro. The company also displayed product made for the U.S. market, and stationary upholstery, for a more complete presentation.

La-Z-Boy says it has narrowed its European market focus to tailor the line to consumer preferences in Europe's various countries.

"Once we've built some distribution, our intention is to market the brand in Germany and Austria and support the brand with our marketing dollars (within a year)," Case said. "In the early stages we defined Europe fairly broadly."

That focus also led La-Z-Boy Europe to streamline its merchandising. Last year the line featured a variety of comfort levels.

"We needed to simplify the merchandising process, because if you don't have a dedicated retail program, it's difficult to get that (comfort story) across," Case said.

"We now have three collections, but it's basically a styling issue, with different levels of function within those styles. In the German market, the retailer doesn't carry any stock. It's all special order, so you need to keep it simple."

Steinhoff just added a 500,000-square-foot, state-of-the-art distribution center in Germany to its already powerful manufacturing and warehouse infrastructure.

"Steinhoff felt there was an opportunity in Germany and Austria in particular to come up with a different retail model," Case said. "Right now we see the huge opportunity as in-store presentation — a gallery. This isn't a question of 'Do you like these two chairs?' It's 'Do you like this 1,500 square feet?' This is a long-term commitment. We've got great partners and it's moving along."

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