Wanted: Great deals
August 3, 2012-- Furniture Today,
The emphasis is on "great."
Few retailers appear ready to make drastic changes in their lineup and they haven't indicated much excitement over any particular introductions they've heard about heading into market. But they'll keep an eye peeled for deals, including traffic builders to draw consumers in over the Labor Day weekend and through early next year.
Their focus on specials and quick ship programs suggests many retailers are either taking advantage of suppliers' openness to deal or aren't willing to take on too much risk in uncertain times. However, some are using rebounding business to justify stepping up price points.
Also, while all the key furniture categories will be shopped, several retailers said their focus will be in bedroom, bedding and home accents, because the market here has struggled to offer a meaningful upholstery selection for them.
"Our lineup is pretty well set, but we're always looking for ... special purchases and door-busters," said Larry Alterwitz CEO of Walker Furniture, the Top 100 Las Vegas retailer whose main showroom can be seen from the World Market Center complex.
Alterwitz said business has been improving every month, although he doesn't expect it to return to pre-recession highs anytime soon.
"The whole furniture industry got beat up for such a prolonged period," he said, "so we're grateful for the increases we're seeing."
Since Nevada is a so-called swing state for the presidential election, television stations have been flooded with negative political advertising, making it tougher for retailers such as Walker to get their messages across to consumers. As a result, Alterwitz said that through the election cycle, Walker will probably rely a little more on direct mail, and will go in and out of television as needed.
As for the door-busters at market, Walker is looking for promotions in all categories "that can create a lot of excitement," Alterwitz said. That could be a $197 sofa, $397 or $497 five-piece wood bedroom groups, or sectionals for $399 or $499, for example.
With several holidays and holiday weekends coming up, starting with Labor Day, "now's the time to get those things lined up," he said.
Outside of this, Walker will look for ways to tweak its lineup in key categories without making major changes. It's not planning to enter any new categories, though the company did recently push into outdoor furniture and "we'll see if we can expand our efforts a little bit," Alterwitz said.
Business for Englewood, Colo.-based American Furniture Warehouse is running about 10% ahead for the year, said CEO Jake Jabs. For a five-day period during the Colorado wildfires, business fell off about 10%, but that was followed by a jump that pushed overall July business up dramatically.
Jabs guesses the uptick may be partly due to fire victims moving to new homes, but also the housing decline in general. Some consumers are moving out of houses and into apartments, condos or rental properties, he said, but they still need furniture.
Jabs and most of his buyers are making it a short trip to Vegas, but since business has been good, AFW has a strong open-to-buy position, he said.
"There are a lot of good deals out there in closeouts, and I'm not talking about an old, moldy fabric or cut-and sew pattern that's been sitting in a warehouse for two years," he said. "I'm talking about real good stuff.
"It seems like factories are needing business, so we're going for some good deals to run as special purchases."
Lane, one of AFW's biggest suppliers, is among those that have offered specials, Jabs said, including great buys on quality leather upholstery. He said the same is "so true of many factories right now."
As usual, Jabs said his buyers will be on the lookout for fresh looks across all categories, although he hasn't heard of anything in particular that he can't wait to see.
As the upholstery buyer, Jabs said he's not expecting to find much in that category, noting that he only has about five vendors to see, including Ashley. However, AFW's case goods buyer will shop home office and ready-to-assemble furniture aggressively, and the retailer's accessories buyer will be shopping here "the whole week," Jabs said, noting that Las Vegas is her best market.
A handful of other retailers had similar stories - not expecting to make major changes here, but ready to consider fresh looks and whatever comes off as a true value.
Houston-based Star Furniture "will work real closely with our bedding suppliers," said CEO Bill Kimbrell. Star will visit with Serta, Simmons, Tempur-Pedic and Restonic, among others.
"We're just keeping up with the innovation in bedding," he said. "That's the home furnishing product that has had the innovation."
Star also will explore Las Vegas to see some suppliers it doesn't typically shop in High Point.
Jeff Seaman, CEO of Seffner, Fla.-based Room To Go, characterized business as "decent" and said the retailer is coming to Las Vegas for "the usual."
What's the usual?
"We never know," he said. "In any given market, there is no big glaring need. We're looking for things that are different and new and exciting and a good value."
Charlie Malouf of Charlotte, N.C.-based Broad River Furniture was more specific.
"I'm really looking for some killer case goods - another best seller for both brands," said the co-owner of Ashley Furniture HomeStores in the Carolinas and Georgia and soon to be two multi-line Savvy Spaces stores.
"We need something that's going to resonate with the customers - a great price point, a great value that we can get a lot of turns and a lot of velocity on," he said.
Malouf added that he's talking about bedroom furniture (with queen beds retailing from $399 to $799) more so than dining room, because bedroom is more of a primary category and helps drive sales in that other important business segment - mattresses.
"There's a huge opportunity to continue to improve on mattress sales every time you sell a bed," he said.
In addition to this, and particularly on the Savvy Spaces side of the business, Broad River is in the market for suppliers with East Coast warehouses - in North Carolina, Virginia and Atlanta, for instance. Quick ship and replenishment capabilities and lower freight costs are important, he said, "so we don't have to go long in the tooth with containers or stock."
Like Jabs, Malouf isn't expecting much in the upholstery category. However, "I suspect we'll see some more great sellers and trimmed right groups from (Ashley).
"My expectations are already high, and I think they will continue to execute," he said.
Mike Allen, vice president of home furnishings for buying group BrandSource, called business conditions "seasonably average," noting a typical late March slowdown followed by a pickup in the summer, but not as strong as the first-quarter gains.
He said he has been encouraged by increased activity in certain housing markets, including greater Seattle.
"The only concern I have is it being an election year," Allen said. He noted that a BrandSource retailer at a recent dealer meeting in Minneapolis said he wouldn't be advertising on television until after the general election because he can't afford the going rates and "there was very little (available) in the way of time."
In Las Vegas, Allen said BrandSource will focus on goods across all categories for its circular program.
"We're not so much looking for price-driven products," said Allen.
There was much greater emphasis on price about two years ago, he said, when BrandSource came out with circular in which everything shown was priced under $1,000. That kind of pricing pressure has eased, Allen said, and that should open the door to fresh looks and maybe ratcheting up some price points "so everybody can make a little more money."
Saltillo, Miss.-based The Spencer Group, which operates Ashley Furniture Home-Stores and two multi-line Stash stores, is coming to market not only to see all the new product introductions from its main supplier, Ashley, but also because "this is where we come to solidify our vision and unity across the (Ashley) brand," said co-owner Chad Spencer.
For the eclectic, upper-mid priced Stash format, the retailer is seeking another value upholstery line, with fabric sofas that can retail from $799 to $1,299, to complement its primary upholstery supplier.
"We want great solid looks with a lot of value," he said. "We're trying to find someone who can provide simplicity in special orders ... as well as on time and timely deliveries."
In bedroom for Stash, Spencer said the retailer will have an eye out for strong transitional looks to retail for less than $2,000.
He said business has been steady for most of this year and traffic has been good. Same-store sales are running single digits ahead of last year, although he added, "July has been perplexing" as traffic has held up but sales have softened.
The credit-restrained consumer "is still a huge issue," he said, adding that approval rates are still low compared with historical standards.
On the plus side, Spencer isn't operating in any swing states, so he hasn't seen the onslaught of negative advertising affecting consumer moods in other markets.
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