Palliser goes after casual
By Michael J. Knell -- Furniture Today, October 28, 2002
High Point — Palliser has embarked on an ambitious strategy to become North America's dominant purveyor of casual contemporary case goods, firing its opening salvo at market with the three new bedroom suites.
Peter Tielmann, vice president of marketing and business development for Canada's largest assembled household furniture manufacturer, said it's a move akin to the one they made several years ago when Palliser decided to focus on becoming North America's largest maker of leather upholstery — a position they have since attained.
"We know that we can't be everything to everyone in case goods but we can be everything to everyone with an interest in casual contemporary," he said.
Tielmann said most research indicates casual contemporary is a hot button in case goods. "Even the most conservative retailer shows some casual contemporary on the floor," he said. "It's the fastest growing style category right now."
The strategy has both a merchandising and a manufacturing component.
Palliser has always been an item house, building products that stood on their own. Beginning next April, Palliser will begin to transform itself into a collections house with six collections encompassing master bedroom, dining room, occasional and entertainment. Three of those also will have junior master or youth bedrooms as well.
"When the bedroom is selling well, entertainment, occasional and dining room is an addition sale that often makes sense," Tielmann said. "Often it sells better and easier as part of a collection."
Home office won't be part of this collections strategy at least in the beginning.
"Home office is very solutions driven," Tielmann said. "That will evolve over a longer period of time."
Palliser will merchandise the collections on a new four-tier pricing structure.
Entry level price points will be dominated by laminated goods, often used with other materials — such as solid wood and glass — to make strong design statements without pricing itself out of the market.
"The key component to success in laminates is innovation," Tielmann said. "You can achieve looks in laminates that you just can't create in wood."
The second price tier will see Palliser use laminates cases with fronts made of wood such as plantation mahogany from Indonesia and plantation pine from Brazil. Fronts will be imported from overseas facilities the company controls to Canada for final assembly and distribution.
The third tier in the new strategy is solid wood with veneers. "The values we can get offshore for these types of products are incredible," Tielmann said, except for those made of oak and ash, which are still more economical to make in Canada.
The highest pricing tier will be marked not only by greater attention to design but by the use of value-added component such as leather headboards.
Palliser introduced Valencia, the first bedroom from this tier, this market with a suggested retail of US$999 for the bed. It's the most expensive item Palliser has produced.
"This piece comes out of Indonesia," Tielmann said. "It multi-stage finish is labor intensive and represents the top of the line for Palliser."
The sourcing of wood for components has become an important element of the new strategy. Close-grain woods, such as plantation mahogany, will come from Indonesia, while open-grain wood will continue to be sourced in North America. Pine will come from Brazil.
Tielmann said that sustainability is becoming increasingly important in Palliser's decision- making.
"Our mission statement doesn't allow us to harm the environment," he said. "We want to use sustainable materials in everything we do. That's why we stay away from virgin forests."
This explains in part why Palliser has worked in Indonesia rather than China. Indonesia has its own local materials and a strong commitment to replanting wood, while China has little environmental protection in place.
