Styling advances expand the reach of promo BR

New paper laminates replicate look of wood

By Powell Slaughter -- Furniture Today, March 13, 2005

High Point — In the past two years, promotional goods have increased their share of the master bedroom market, increasing from $780 million, or 10% of total consumer spending in the category in 2002, to $1.3 billion, or 16% of 2004 master bedroom purchases.

That's according to findings of the 2003 and 2005 Furniture/Today Consumer Buying Trends Survey, which defines promotional bedroom as $899 or less.

Don't blame the increase just on a rough economy: During that same period, households earning less than $30,000 a year went from 27% of promotional bedroom buyers to 22%, while households with incomes of $60,000 to $74,999 almost doubled from 12% to 23% of promotional buyers.

Sources say that while some imported wood groups have migrated down to promotional price points and are contributing to growth, huge improvements in laminates, especially paper laminates that replicate wood looks, are a key to low-price bedroom's success of late.

Wood accents add heft

The use of solid-wood components such as moldings and drawer fronts in combination with laminates brings extra heft and value to low-price bedroom.

Some manufacturers also use today's natural-looking papers — the result of an optical embossing technique that bears a striking resemblance to real wood — to create large-scale print bedroom that goes head-to-head with wood in the $1,500 and under price point for suites.

Promotional sources can't say enough about the quality of papers that have emerged in the past two years, especially from Japanese suppliers.

"You're getting incredible depth with these marble and stone, as well as wood looks," said Danielle Grimes, national sales manager for Higdon Furniture. "When paper suppliers started being able to establish that level of look, things really took off in this category."

Heartland, Higdon's No. 1 group at $799 retail for four pieces, is a good example of a hybrid wood/laminate suite.

"The suite has inch-thick, solid-wood drawer fronts, molding, headboard and mirror," Grimes said. "And, to keep the price competitive, we put a paper on the end panels and tops."

Standard's Union Square bedroom combines optically embossed laminates with imported resin moldings and grills and glass from China, all assembled and finished domestically. The group is a powerhouse in the company's promotional lineup after only a few months in stores.

"You get a $2,000 look at under $1,000 for bed, dress-er/mirror and nightstand," said Todd Evans, vice president of sales. "The first really good paper we had that looked like wood was about 18 months ago. In 2004, the suppliers really stepped up. The paper quality is the No. 1 factor in a laminate product."

He credits improved papers for much of Standard's growth in promotional bedroom. The company's laminate groups grew 28% in 2004, and were up another 12% through the first two months of 2005.

Several sources credit the increasing importance of paper versus foil laminates not only to improved capabilities from paper sources, but also to conditions in the laminate market.

One of the major suppliers of foils to the U.S. furniture industry, Germany's Kurz-Hastings, shut down its U.S. plant a couple of years ago. Not only that, foil suppliers are concentrating more on other industries, said Chris Hart, president and chief operating officer of Hart Furniture.

Kurz-Hastings was Hart's major foil supplier, and its U.S. closure left limited competition in the market, Hart noted, adding that applications like edge banding on promotional suites still require foil.

More perceived value

"Lead times for foil started equaling delivery (of those of papers) from Japan, especially as foil suppliers looked more toward other industries," he said. "Furniture is still important to the paper suppliers. ... Foil used to have the better look — now it's 180 degrees the other way."

Improved papers have allowed manufacturers like Hart to offer better products at the same low price points.

"By putting a better paper on a suite, there's more perceived value," Hart said. "It's enabled us to take what was a $200 (wholesale) suite yesterday but still a $200 suite today and make it look much better."

Laminates offer an astounding array of options in the effort to add value to promotional bedroom.

"It's limitless what you can do with paper compared to real wood," Hart said. "You can match any grain pattern with any color. With paper, you can have oak grain and cherry color.

"The optical embossing is a big breakthrough — as if you could walk over and feel wood. One supplier I know is working on putting actual wood texture on the paper."

Impact of imports

At Harden Mfg., National Sales Manager Lee Scott believes imports as well as improved domestic laminates account for some of the promotional segment's increase in the master bedroom category.

"The imports have gotten so cheap that you have some wood bedrooms getting into that price range," he said. "We're finding that we're getting a lot of laminate business for second bedroom and vacation homes, and we've been working on cleaning up the line as far as looks go."

Harden has a growing import wood program, which has made its mark on the company's domestic line.

"A popular imported adult bedroom group was the influence for a new domestic laminate group, Montrose," Scott said. "We're using imported wood posts for the bed, but the rest is MDF, and the laminate matches the posts perfectly."

The result: $799 retail for a four-piece set.

In addition to better papers, Perdue is working with new applications for vinyl laminates and new shapes for cases.

"One of our better groups has curved sides," said Rich-ard Perdue, president and CEO. "We're always trying to do things that haven't been done before with particleboard and MDF. As well as paper, we're laminating vinyl, especially on youth groups — we can sell that it's stain-resistant, that you can draw on it with crayons and not ruin it."

Textured vinyl works not only as a stone application, but in looks replicating wood for adult bedroom, said Joe Engler, Perdue's national sales manager.

"We use it in wood tones so that you actually have the hand of real wood when you touch it," he said. "We're using it in inlay panels and cross-backing to give you the look of planks."

Some manufacturers are using improved papers in combination with hefty scale to offer laminate bedrooms at starting wood price points. Orleans' reintroduction of Lumberton is a good example, incorporating wood posts from Chile, step-up hardware and large-scale pieces. The suite retails around $1,499.

"One thing the ocean freight cost is doing is making a wood group like that from overseas too expensive," said Ed Marshall, president. "You can buy a wood suite in that price point, but you can't get the look."

While groups like Lumberton create an opportunity, Marshall said Orleans will continue to address truly promotional prices with its domestic laminate program.

"You can't have your whole line there," he said. "We concentrate our starting retail prices for laminates around $699, and go up to $1,499."

Good Cos. combines a strong in-stock position in its Mexican-made bedroom with a new import program for wood dining room to go head-to-head with all-wood full-home collections from Asia.

The strategy has paid off, said President Sarah Garcia.

"Our orders are up 23% versus a year ago, and we have a $3 million backlog, which we haven't had in five years," she said at the January San Francisco market.

"And while other people in these price points are focusing on commodity, we focus on design. We've doubled our number of designers and worked closely with paper suppliers on designs for things like faux leather."

The improved capabilities of paper suppliers add new appeal for the category with retailers for companies like Good.

"Our next step is to get into larger accounts that haven't yet considered print," Garcia said.

Promo BR spending

2004		2002
$7.9 billion	Consumer spending on master bedroom	$7.8 billion
16%	of master bedroom sales were promotional bedroom	10%
$1.3 billion	for a total of	$780 million

Promo BR spending

Who's buying?
% of U.S. households purchasing promotional master bedroom in
Household income	2004	2002
Note: Promotional master bedroom is defined as $899 and below. Source: Furniture/Today Consumer Buying Trends Survey, 2003 and 2005
Under $20,000	11%	17%
$20,000 – $29,999	11%	10%
$30,000 – $39,999	16%	14%
$40,000 – $49,999	9%	12%
$50,000 – $59,999	8%	9%
$60,000 – $74,999	23%	12%
$75,000 – $84,999	4%	6%
$85,000 – $99,999	4%	7%
$100,000 – $124,999	7%	8%
$125,000 or more	7%	5%
Generation
Generation Y Born 1976 to 1985	19%	10%
Generation X Born 1965 to 1975	23%	29%
Younger Baby Boomer Born 1956 to 1964	16%	18%
Older Baby Boomer Born 1946 to 1955	20%	22%
Happy Days Generation Born 1936 to 1945	15%	12%
Senior Senior Born 1935 or before	7%	9%
Region
Northeast	12%	18%
Midwest	30%	24%
South	36%	36%
West	22%	22%