Wood segment confronts challenges
It takes creativity to grow in competitive environment
By Jeff Linville -- Furniture Today, December 24, 2006
High Point — Overall case goods sales — including bedroom, dining room, casual dining and youth bedroom — should grow about 8% this year to nearly $24 billion, accounting for 28% of total furniture spending, according to estimates by Furniture/Today and Easy Analytic Software.
All four segments of the wood category — adult and youth bedroom, formal and casual dining — are expected to post good gains.
Master bedroom
Master bedroom continues to be the leading wood category, garnering 11% of overall furniture spending this year, third behind stationary sofas and mattresses. Sales should grow from $8.4 billion in 2005 to $9.2 billion in 2006, thanks mainly to the values offered by imports.
Youth bedroom
Youth/second bedroom sales are seen growing to $5.1 billion from $4.7 billion last year, making up 6% of total spending. Infant furniture, such as cribs and changing stations, should rack up $1.2 billion in sales this year. Together, these two segments would create the fourth-largest furniture category, bigger than formal dining, home entertainment and home office.
"From a category standpoint, youth is still a growing (segment)," said Lee Boone, president of Legacy Classic. "It continues to evolve. It's not just strictly juvenile furniture anymore."
Manufacturers and retailers are offering youth/teen furniture to young adults, seniors downsizing to smaller houses or assisted-living facilities, and college students in dorms, said Boone.
"Most homes have only one master bedroom, but two or three smaller rooms, so we say, 'Here's a 58-inch dresser that will fit,' " he said.
Casual dining
Sales of casual dining, which continues to blur the line with formal dining, should grow from $3.4 billion in 2005 to $3.6 billion this year for similar reasons. Not many homes can hold a 100-inch table, but all can accommodate a 54-inch square table that closes down to 36 by 54.
Formal dining
Not to be outdone, formal dining sales also grew in 2006 by borrowing from its little brother's approach. For instance, Pulaski's standard dining table measures 44 by 72 inches, but it introduced some new sizes this year, including a popular 66-inch-long table that gives a little more breathing room in tight quarters, said Jim Kelly, former executive vice president of product development for Pulaski and the newly appointed president of Solutions.
Dining sales, $5.8 billion in 2005, inched up 3% this year to $6 billion.
Playing a big role in dining designs are the floor plans of homes, people's current lifestyles and the latest style trends.
Younger consumers might well see formal dining as something more appropriate for their grandparents than for them, but manufacturers say there are ways to make groups more viable in today's market.
Chair designs can help move a table toward a more formal or a more casual look, said Kelly Cain, vice president and product manager for Stanley Collections.
Some of Stanley's more ornate chairs are selling well, like a fully upholstered wing chair and a leather chair with an aged finish.
On the other hand, some exhibitors at the October High Point market showed benches with their bigger tables, giving the groups a more relaxed feel.
How a table is displayed on retail floors also has a big impact, said Legacy's Boone. If the table is dressed in a more modern or contemporary look, it might catch the eye of a younger consumer. But if it's shown formally, some shoppers will walk right by without noticing it.
"In today's tough business climate, more than ever, consumers want, and expect, to be inspired," said Nathan Cressman, Magnussen Home's vice president of merchandising and international operations. "Home magazines and make-over TV programs do a great job of helping consumers get inspired. It's imperative that we think that way in furniture on the retail level as well."
At the October market, he said, Magnussen Home's showroom focused on offering dealers inspiration. "We set up realistic environments and mixed in items from our Home Accents collection," he said. "Our showroom wasn't just a showroom of furniture. It was a showroom of 'could be' interiors."
Creating a room environment can mean using furniture outside its typical setting. A functional nightstand could serve as an end table, or a bombé chest could go in the living room or bedroom. Finding new uses for a piece also maximizes SKUs. Rather than keeping a bunch of items in stock, a store could show the same piece in multiple settings.
"Bedrooms are multifunctional now," said Tom Staats, Highland House's president, adding armoires should accommodate the latest TVs, and writing desks need laptop computer function. More and more upholstery is seeing double duty in the bedroom, with a chair used for reading near a window or as seating for a writing desk, he said.
Given the tough retail climate, stores have to put more emphasis on return per square foot, said Darrell Ferguson, chairman of Ferguson Cope-land, meaning margins will face increasing pressures. There's a tendency in lean times to trade down in price points, he said, but that may not be the best approach, since better goods don't face the fierce competition from imports that's prevalent at the lower price points.
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