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Despite increasing cost pressures, manufacturers of motion upholstery and recliners are convinced they can maintain the momentum that has produced numerous winners during an otherwise lackluster furniture sales period.
Producers believe the sluggish economy will continue to hold down furniture sales into early 2003, but they say the motion and recliner categories can remain ahead of the curve as long as producers continue to turn out comfortable, stylish pieces at a wide range of price points.
They say leather will continue to grab a greater share of the market, and many believe larger-scaled items such as sectionals will become increasingly important.
"It still comes down to the basics — eye appeal and comfort appeal — both at an affordable price," said Bob Young, merchandising manager for recliners at Lane. "Both styling and cover application are equally important."
Customer base broadens
Young and other executives believe that recent design trends will continue to blur the styling lines between motion and stationary upholstery, and most say such moves are essential if the categories are to appeal to a broader base of consumers.
"The typical 'Bubba' recliner customer is going to remain, but our challenge is to appeal to a consumer who wants attractive accent chairs that happen to recline," Young said.
Paula Hoyas, product manager for motion upholstery at La-Z-Boy, said the same is true for larger motion pieces such as sofas and sectionals.
"People are spending more time in their homes ... and they want to be comfortable and stylish,"she said. "We expect to continue to do well in the category."
Hoyas said she expects leather, faux suede and other high-quality covers to gain strength next year, but she and other executives said such trends probably won't lead to significantly more merchandise being sold at higher retail price points. Recliners will continue to do the bulk of their volume at $499 to $799, while $1,699 to $1,999 will be the hot price points for sectionals, producers predicted.
Leather prices dropping
One factor keeping downward pressure on retail price points is leather, whose popularity appears to be increasing in inverse proportion to its price. All-leather reclining chairs are now available for as little as $499 retail, and some leather/vinyl models are as low as $399.
"Leather is going to be very, very strong next year," said Cabot Longnecker, merchandise manager for recliners at Berkline. "The values that are available in this category are incredible."
Those value stories, however, are making retailers more resistant to paying higher prices for any item, regardless of its styling or cover selection. And that creates cost pressures for manufacturers faced with increased operating costs.
For example, Barcalounger President Wayne Stephens said his company had raised prices by only 1.5% in the last three years, even though employee wages have risen 3% to 4% annually during that time and other costs have risen even faster.
Imports on the rise
That's why Barcalounger and most other producers increasingly are turning to offshore suppliers for many components — particularly cut-and-sew leather from China, Mexico and South America.
"The business was a lot easier when we didn't have to do that, but to remain competitive, we have to get the stuff out the door at a lower price," Stevens said.
Chuck Tidwell, product manager at Franklin, said such an environment could give manufacturers a chance to gain market share if they deliver great values to retailers.
"Our greatest opportunity is to continue to focus on value, not price," Tidwell said. "Value does not necessarily mean the cheapest price."
Don Hunter, vice president of merchandising at Catnapper, believes value can be shown in large pieces such as sectionals, which he says will be particularly hot in 2003 because they can be used in a variety of configurations on the retailer's floor and in the consumer's home.
"All of our new sectionals at (the October High Point) market were home runs," said Hunter. "A dealer is more willing to put a sectional on the floor because he can sell multiple SKUs while displaying only one sectional."
Home theater seating
Hunter also believes home theater seating will continue to gain in importance next year, but says producers need to broaden its appeal by designing products for consumers who can't afford five-figure sound systems and expensive large-screen televisions.
"Not every home has a free-standing media room," he said. "People with 27- to 32-inch televisions would like to have comfortable reclining furniture with cupholders, too."
Another sub-category that could have significant growth next year is power reclining mechanisms. Producers say much hinges on the success of La-Z-Boy's lineup of power recliners that was unveiled with considerable fanfare in October.
"More and more people are going to find it acceptable now," said Berkline's Longnecker. "I don't know if we'll ever sell as many power mechanisms in the U.S. as they do in Europe, but I think it could become a much bigger part of the market."
Leather items such as this Berkline sofa are hot sellers in motion upholstery.
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