Magnussen shifts focus
Importer scales back on product mix
By Thomas Russell -- Furniture Today, January 4, 2010
HIGH POINT — As part of a growth strategy, case goods importer Magnussen Home has scaled back on its product mix.
In the past, the company offered a complete collection of bedroom, dining room and occasional, including licensed lines with such well-known names as Cristina Ferrare and Asheville, N.C.'s Biltmore Estate.
Now the licensed lines have faded away, and the company has shifted its emphasis to bedroom and occasional and away from both formal and casual dining.
This largely ties in with Magnussen's efforts to develop bedroom priced more in line with its occasional. The occasional falls in the middle price points with cocktail tables retailing from $199 to $399. Many of the groups are consumer tested, meaning retailers can get an idea of how they will do on the floor before making the purchase.
As recently as October 2008, the company's bedrooms were priced in upper middle ranges with four-piece sets retailing from $1,999 to $2,499. That all changed this past April and October as the company launched a lineup of consumer-tested sets at $1,299 to $1,699, with the strength of the lineup in the $1,499 range for four pieces. Other pieces also are available, including media chests.
“It's where the power of the sale is,” said company CEO Richard Magnussen. “We focused on the 20% of the pieces that do 80% of the volume and we made it easy for the retailer.”
The company achieved the better pricing through product engineering that sometimes resulted in smaller-scale pieces and thinner materials. But at the same time, the company increased the scale on some pieces and improved its finishes to provide a higher perceived value, Magnussen said.
“Its really dissecting at a high level what the consumer wants and getting it down to a science of what she is looking for,” he said. “We are engineering it to meet her needs.”
As the company shifted its bedroom to the new price points, it also began to phase out dining and some of its larger collections.
“I'm not saying there isn't a collection business, but I think at our price point, the retailer and consumers are looking for the best value in bedroom and they separate that (buying) decision from a dining purchase,” said Magnussen.
He said dining has been a small portion of the business anyway, with the bulk of its sales in occasional and bedroom.
Like others in the industry, the company has seen its sales decline this year, but Magnussen believes it gained market share in the second and third quarters. He said that with its product lineup, it is well positioned to add to that gain.
This isn't to say that the company won't get back into dining in the future. But before doing so, Magnussen said he wants to see how the category develops.
“I won't say that we will never be, but we will wait for that transition to happen and then we will come in like a lion,” he said.
He also said that he isn't opposed to future licensing agreements, but doesn't plan any immediate moves in that area.
Two retailers who have shopped Magnussen say they like the company's product approach.
Howard Freed, owner of Freed's Home Furnishings in Dallas, said he has purchased some dining room from Magnussen in the past. But the importer's move away from dining doesn't bother him because he believes the company has been stronger in the bedroom category anyway.
In October, his store picked up four of Magnussen's 19 new bedrooms. Freed said the newer sets “are smaller scale and more lifestyle oriented, but they are right on target and well priced…. They are very much in tune with what the market is wanting right now. They've done their homework and have hit the mark on bedroom and will have some winners on their hands. ”
Magnussen's new lineup also is fine with Jacqueline Conley, who runs Home & Mattress Revolution USA in Tampa, Fla. She likes the styling of Magnussen's bedrooms and was pleased that she hadn't seen the designs elsewhere.
“They have great craftsmanship and original designs,” she said, adding that she also likes the mechanisms on case pieces such as drawer guides, which translate into ease of use for the consumer.
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