Blended strategy in wood proves winner at Tupelo
By Jeff Linville -- Furniture Today, March 5, 2006
Tupelo, Miss. — Using blended sourcing is helping some longtime domestic producers boost case goods sales.
Manufacturers showing in Tupelo offered a mix of locally produced case goods and imported product. Rather than leaching sales from domestic lines, the sourced goods often are amounting to incremental new business.
Eight months through its fiscal year, Orleans Furniture's sales are up 28%, said Dan Ide, vice president of national accounts. Yes, some of that is because people in the Gulf Coast region have begun to replace furniture lost in last year's hurricanes. But even without that regional boost, the total would still be up about 20% because of nationwide gains, Ide said.
Orleans President and CEO Ed Marshall said this shows the company's blended strategy is working. Orleans offers its Turbo program out of its warehouse in Columbia, Miss., allowing customers to buy U.S.-made goods or imports, which the company offers at the container-landed price plus the freight cost from Mississippi to the store.
Retailers can get imported goods out of the warehouse in 45 days, or mix up to six imported bedroom groups from Orleans' Hummerz line in one container arriving in 90 days. Some retailers are ordering containers, then supplementing sales out of the warehouse until the container arrives, Ide said.
Orleans works with some majors, but hasn't lost its focus on mom-and-pop stores. Executives said the importing strategy was devised to make sense for its foundation of small and midsized stores, with annual sales of $5 million to $25 million.
Harden Mfg. launched an imported line more than three years ago and has seen bedroom sales double since then, said Lee Scott, vice president of sales. Both imports and domestic product are doing well, he said.
About the same time the imports launched, Harden hired designer Heath Simpson to revamp the domestic line. Scott said Simpson and Merchandise Manager Terry Furr have improved the styles and made use of new, fashion-forward paper laminates.
Each division has helped sell the other, Scott said. Its established retailer base bought imports, and the imports helped attract a few Top 100 accounts Harden hadn't sold before. Those retailers, in turn, tried out some of Harden's domestic groups.
The strategy also is working with West Coast manufacturers like Good Cos., which has a North American factory in Tijuana, Mexico, and also imports from Asia.
Domestic producers of laminate furniture have made their niche with promotional pricing, but product from China has gotten so cheap that niche is disappearing. One executive noted that in January, Lifestyle Enterprise ran ads for a four-piece solid-wood bedroom group at $299 F.O.B. "I can't even sell my particleboard for that," he said.
High fuel and utilities costs also are hurting North American companies. Dynamic Furniture, based in Canada, has seen rising expenses cut into profits. Utilities that cost about $40,000 a year ago were up to $102,000 in January, said Karim Kurji, vice president of sales and marketing.
Last year, one Southern particleboard company shut down. Hart Furniture sent a letter to its employees in May 2005 saying that a major customer had replaced Hart's goods with Chinese imports.
-
Blended strategy in wood proves winner at Tupelo
Mar 9, 2006
Featured Company
-
FurnitureCore.com
FurnitureCore.com is a dynamic web application aimed at the furniture industry. Retailers and manufacturers alike will find our deep reserve of tools to be exactly what their furniture business needs.www.furniturecore.com... more
VIEW ALL GALLERIES
