Youth enjoys decent momentum

Creative function plays a big role in stimulating sales

By Lisa Casinger -- Furniture Today, December 24, 2006

High Point — Youth furniture remains a category to watch as the players shift and the market expands.

Several major manufacturers like Broyhill, SLF and Lea Inds. expanded their youth offerings this year.

Though Broyhill has had youth groups in the past, they typically were spin-offs of popular adult lines.

This year, the company debuted Broyhill Kids, featuring stand-alone youth groups, as well as an accessory program with pieces that complement the furniture. Each group has the same 17 SKUs, though the styles and finishes, of course, differ.

A deeper commitment

SLF grew its commitment to the category by increasing the youth space in its High Point showroom from 1,800 to 6,000 square feet.

Jack Richardson, president of American Drew and Lea Inds. said Lea, whose "total focus is youth," is concentrating on building the brand by extending its merchandising with top-of-bed products and an accessories-in-a-box program.

Earl Wang, vice president of product development for Lea, said the segment overall is off about 10% "due to tougher business conditions and more competition" and that Lea's numbers mirror that trend.

"For a manufacturer, 2007 is going to be tougher because of more competition, and the new competitors trying to enter the youth market are bringing in lower-cost products," Wang said. "The retail market will continue to be slower, but those retailers who are advertising and marketing to moms with a broad assortment of products will get their share."

One of the quiet success stories in youth is four-year old Opus Designs. The company has enjoyed substantial growth, which was a catalyst for its move to a larger, 5,000-square-foot showroom in High Point's Plaza Suites in October. Opus Designs now offers more than a dozen collections.

"In a tough economy, we're doing very well," said James Millner, president, product design and development.

Legacy Classic Kids also is growing; its youth sales are up 50% over last year, according to Lee Boone, president

"The consumer isn't aggressively buying big-ticket items, and despite the difficult business climate Legacy Classic Kids is doing well," Boone said. "We're in a growth mode and have good momentum."

Value plus service

Boone said the company combines the best of both worlds by "having comprehensive styles, finishes and SKUs and the value of Chinese imports with an improved service model." Top-selling styles for the company include white Victorian, boys cherry and white cottage.

Since its inception in 2004, Legacy Classic Kids has outgrown the warehouse space it shared with sister company Universal. Legacy Classic Kids and Legacy Classic now have their own warehouse. Legacy Classic Kids' success also has pushed parent company Lacquercraft to expand its Chinese manufacturing facilities for the successful youth line.

"My guess for 2007 is that (business) is going to be more of the same until something significant happens like getting out of the war in Iraq and/or lower interest rates," Boone said. "Consumers aren't buying right now, whether it's cars, houses or furniture."

Danny Olivas, director of marketing for Zocalo, is optimistic about the coming year.

"I think 2007 holds a tremendous amount of potential, but I think success will require focus and consistency in order to connect with consumers," he said.

Zocalo has had a "banner year" with its youth business, Olivas said. Its best-selling youth groups have been Ariel and Fuze Box.

"The industry ethos seemed more open-minded in 2006," Olivas said. "The majority of retailers also seemed to be embracing styles and trends that were more colorful, fun and design-savvy than in previous years."

Olivas counts Zocalo's ability to partner with a variety of distinctive retailers as one reason for the growth of its youth collections, along with design innovation.

Companies like Stanley's Young America and Loft continue to think outside the box by bringing out interesting designs, such as University Loft's Hide & Seek system, and color options, such as the 20 finishes of Young America's myHaven collection.

Glenn Prillaman, senior vice president of marketing and sales for Stanley, said though it's hard to pinpoint a best seller for Young America since the selection is so broad, myHaven is "off to a great start."

"Overall, the youth industry seems to be flat for the year," he said. "Our sales reflect that. Momentum has slowed a bit and many retailers' appetite for new product has been adversely affected by them experiencing a drastic increase in inventories due to buying containers from overseas sources.

"This is the problem right now with the furniture industry as a whole and it has greatly hurt many independent retailers."

Young America represents about 30% to 40% of Stanley's business.

Unique collections

Stickley, Pulaski and iconic designer Alexander Julian joined the youth category this year, each with unique collections that wowed retailers at markets. Stickley Starters is an 18-piece Arts & Crafts collection with smaller cases suitable for youth bedrooms or second homes and guest rooms. Pulaski's highly marketed Build-A-Bear-Workshop Home Collection drove traffic to the showroom and sparked a lot of interest from retailers.

"For 2007, we're looking to significantly grow the BABW collection and strengthen the program," said Dallas George, Pulaski's new vice president of marketing. "As soon as we round that out, I see us strengthening our Casa Cristina youth program as well."

AJ Kids from Manchester Furniture — Alexander Julian's foray into youth — debuted three collections at the April High Point Market.

More players

Other players in the category, including Vaughan Furniture and Powell Furniture, also maintained their strong presence in the market.

"There are lots of players in the youth industry now," said Bill Vaughan, president and CEO of Vaughan Furniture. "But we've always done youth, and it's a cornerstone of our business."

About 25% of Vaughan's sales are in youth, and to protect its market share, the company launched both a traditional cherry and a casual ash group at the October High Point Market, filling style voids in its line.

At Powell, youth sales "are up close to 10% over last year" according to Tom Liddell, senior vice president, national sales. This follows a nearly 50% increase from 2005. Though the company doesn't release specific numbers, Liddell said youth furniture is a "very important part of Powell's overall business."

Best sellers this year were the company's "tweener" designs Monster Bedroom and the Pinnacle Award-winning Z Bedroom.

Liddell said Powell is projecting an increase in youth furniture for 2007 based primarily on the successful placements of new collections like MAX, Sunday Funnies and the bedroom-in-a-box program.

The company opened a 340,000-square-foot distribution center in Ontario, Calif., this year, about 50 miles east of its headquarters in Culver City, to serve the western United States.

"The company has experienced continued sales increases over the last four years, and in 2005 Powell saw unprecedented growth in sales on both the East and West Coast," said Bill Benton, president and CEO. "To accommodate West Coast increased demand and reduce shipping times, we have opened our new state-of-the-art Ontario, Calif., facility. This will play a vital role in providing the highest level of service to our customers."

A few setbacks

But the segment also had a few setbacks and changes in strategy. Palliser still makes youth furniture, but it's doing so through custom and private-label channels. And two well-known names in youth — Good Cos. and Founders — went out of business. Founders, which made promotionally priced particleboard youth and adult bedroom furniture, had been in business since 1974 and shuttered its doors after domestic sales declined.