Natuzzi launching high-end stores

Initial SoHo store will open in spring '07

Joan Gunin, October 12, 2006

HIGH POINT — Italian upholstery manufacturer Natuzzi is set to announce plans next week to open a series of upscale Pasquale Natuzzi freestanding stores and flagship galleries worldwide.

The move is part of the company's ongoing campaign to segment its brands into a good-better-best offering.
To launch the new high-end effort, Natuzzi will refurbish its 3,300-square-foot, three-year-old, company-owned store in New York's SoHo district. Work is expected to be completed by the spring High Point market. As it builds the upscale brand, the company also will look at opening stores in such tony retail locales as Beverly Hills or Chicago's Michigan Avenue, and overseas in Milan, Stockholm and elsewhere. While the manufacturer is seeking retail partners, it initially will open company-owned stores to lock in key high-end locations. In addition to freestanding stores, new galleries will be opened and existing Natuzzi galleries in prime locations may be upgraded to the Pasquale Natuzzi brand. In addition to the high-end Pasquale Natuzzi brand, the company offers Natuzzi in the midrange and ItalSofa as a promotional line.To develop the Pasquale Natuzzi line, the company is creating a separate organizational structure, product assortment and retail distribution. "We're taking it forward around the world to introduce it to the high-end market as a standalone brand," said Dan-iele Tranchini, global marketing officer for Natuzzi, speaking by telephone from Milan."We want to bring something fundamentally new to the market and make a success of this. It's a win-win for everybody," Tranchini said. "Now we have a very clear, market-segmented strategy to take to everybody and to leverage all of our assets. This is a really important piece of evolution for this company."Conceding that business has been rocky over the past 18 months, Tranchini said, "This is very much a part of the turnaround."The new concept will be rolled out to high-end dealers at next week's High Point Market, said Natuzzi Americas President Fred Starr. The first floor of the showroom at 130 W. Commerce Ave. will feature Pasquale Natuzzi products only — including upholstery, lighting, rugs and accessories.In recent years, the upholstery maker has made inroads toward creating a good-better-best scenario with the Italsofa, Natuzzi and now the Pasquale Natuzzi brands. Named for the company's founder and chief designer, the high-end collection has added cachet because it's entirely "Made in Italy," the company said. Typical retail pricing for a Pasquale Natuzzi sofa in a base-grade leather cover is $1,999. A typical Natuzzi sofa would retail at $1,599 if made in Italy or $999 to $1,299 if made elsewhere. An Italsofa product, produced outside Italy, is $699 to $999.The Pasquale Natuzzi collection has been in place for three years but the company has not had dedicated sales support or retail distribution — until now, Tranchini said.Ken Rood, the former president of Ralph Lauren Home and a New York-based brand management consultant, has been working with Natuzzi since January to shape the Pasquale Natuzzi segmentation strategy.Natuzzi has hired former Ralph Lauren Home executives Tod Kraft and Philip Nielsen as vice presidents and brand managers for the eastern and western U.S. regions, respectively, for the Pasquale Natuzzi line. They will promote and market the Pasquale Natuzzi brand while scouting new U.S. retail partners, beginning with the 20 largest metro markets."They will be actively calling on high-end dealers to develop the PN brand," Rood said. As the high-end business grows, account representatives will report to them. "We are taking a pragmatic approach to developing the organization," Rood said.Tranchini said he expects to have about 50 new "points of distribution" (stores or galleries) identified over the next three years. "We are trying to be strategically careful in our selection process, first choosing areas to develop and test," he said.Initially, Natuzzi plans to open company-owned stores to get the concept aloft and to elicit interest from potential retail partners. The branded outlets will have a new logo, possibly Pasquale Natuzzi Home. In addition to the Pasquale Natuzzi collection, stores would offer other Italian-made Na-tuzzi-branded products. Worldwide, there are some 290 Natuzzi or Divani & Divani stores dedicated to the company's products, some of which would qualify for a refit as a Pasquale Natuzzi store, Tranchini said.Calling it "a bold step," Starr said the brand-building effort at the high end will trickle down to enhance Natuzzi's other brands and to boost existing retail partners. A revamped product mix will be introduced at the newly renamed Pasquale Natuzzi store in Cologne, Germany, in conjunction with the January show there. In addition to upholstery and accessories, the store will carry the first dining room collection from Natuzzi. Natuzzi will make the dining chairs, but the case pieces — while engineered and designed by Natuzzi — will be made at an Italian woodworking plant. An advertising campaign to promote the Pasquale Natuzzi brand will be launched in shelter books and high-end magazines after the spring 2007 market, Tranchini said.


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