Furniture Brands to retarget brands, streamline operations
Upscale brands to aim at designers; some Lane, Broyhill stores may close
By Furniture Today Staff -- Furniture Today, October 23, 2007
NEW YORK — Furniture Brands International said today it would overhaul its far-flung organization by targeting designers for its upper-end brands, consolidating back-office operations, and implementing a new product development strategy.
In a presentation to securities analysts here, the No. 2 U.S. furniture source also said it will emphasize growing its Thomasville and Drexel Heritage dedicated stores, but may be closing some Lane and Broyhill stores.
Ralph Scozzafava, vice chairman and CEO-designate, said the midpriced Lane and Broyhill brands will be targeted to traditional furniture stores and mass-market retailers, while dedicated stores will be the focus of the higher-priced Thomasville and Drexel Heritage brands.
The company’s other high-end brands, including Henredon, Pearson, Laneventure and Hickory Chair, will be targeted to designers, he said.
Scozzafava told analysts the brand strategy is a key element of FBI’s transition from a holding company to an operating company.
Other key parts of the transition include combining back-office operations such as human resources, finance, information technology and supply chain management.
“We have too much infrastructure, and we will deal with that,” said Scozzafava.
In addition, the company soon will begin implementing a new product development strategy that will involve considerable consumer research and testing before a product is put on the market.
“We don’t have a great product development strategy,” Scozzafava acknowledged. “It’s more art than science … but we want to bring a little bit more science to it.”
He described 2007 as a year of “cash flow and clean up,” but said 2008 will be a year to focus on improving margins. In 2009, the company will be able to focus on improving margins and growth, he said.
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