Home Source Opens a New Front
Carole Sloan -- Furniture Today, February 8, 2010
A major thrust into supply chain management for retailers and off-shore manufacturers is the newest growth venture for Home Source International.
A new 60,000-square-foot facility will enable the company to act as a replenishment facility for domestic retailers, as a low cost just-in-time warehouse/facilitator for off-shore manufacturers as well as a ship-to-consumer provider for all types of retailers.
The company, now a decade old, is looking beyond its core base of home textiles in the new venture. “There are a lot of companies doing direct importing outside of home textiles, and we can help them cut inventory levels,” said Keith Sorgeloos, president/ceo.
“We believe we can help retailers be even better retailers rather than inventory control specialists,” Sorgeloos remarked. As for the off-shore manufacturers, they really only want to make product – not worry about the rest, he said.
The core Home Source International business is also undergoing significant changes. In addition to its licensed product portfolio of Vera, Portico and Diesel, it will add a French and an Italian brand from the Zucchi Group’s design portfolio this year.
To showcase these collections and the balance of the expanded product mix, Home Source will triple its New York showroom in time for the market in March. Another new highlight will be customized monogramming.
High-end specialty stores remain a major business opportunity for the company and that group of retailers has climbed to 2,000 active accounts. Direct-to-consumer activity with these retailers is viewed as a major growth area. “It’s not new for us, but it will grow even more,” Sorgeloos said.
There are a lot of high-end specialty retailers importing more than home textiles, and it is through the new division that Sorgeloos believes there is a major growth opportunity to work with them.
“We look on it as a an economy of scale.” Products include gifts and furniture as well as home textiles. “And a benefit for the specialty retailer is that we can ship to the store or directly to the customer,” he explained.
Another new growth area for the company is marketing bedding especially to furniture stores. “So many retailers put ugly bedding on their high quality beds. This is a real opportunity for them and us since we ship direct to the consumer.”
At the same time the company is structuring its own website and social media marketing, which should be finalized this year. “We’re really looking at getting to consumers versus dealing with the retailers. In the next 10 to 15 years we want to control more of what we do,” Sorgeloos stated.
In fact, he added, “while our web business is small now we see it building to 10 to 15 percent of sales a year.” One of the incentives for direct-to-consumer business is “we can sell better product and the margins are two times retail.”
The company had significant growth goals for the next few years, but as Sorgeloos noted: “In September 2009, we were down 5% at $50 million. This year we are on track to have a minimum increase of 10%. Sales could go up $20 million unless the second half goes kaput.”
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