Youth sources see signs of recovery
By Gerri Hunt -- Furniture Today, March 22, 2010
HIGH POINT —
It's hard to imagine that business in 2010 will be anything but an improvement over last year's disappointing figures.
“Like everyone, business has been tough for us,” said Kevin Walker, Young America's vice president of product sales and management. “But I'm confident we've seen the bottom. Sales have been improving, and we anticipate a good year.”
At Newport Cottages, CEO Pockets Alvarez said he is “excited and optimistic” about growth in 2010. “We experienced a decline in sales during the last quarter of '08, and throughout all of '09 we were able to maintain a constant level of sales.”
Capretti President Mitchell Schwartz is “really pleased with the direction” of business, following overseas structure changes and an investment in its Capretti Green line. And Greg Sicard, national sales manager for Best Home Furnishings, said his company's juvenile sales have been “identical to the adult side, almost to a T.”
But as business is on the upswing, the industry is being detoured by safety regulations. Amid millions of crib recalls, plus the phase-in of the Consumer Product Safety Improvement Act of 2008, manufacturers are being forced to change processes and products — but they're glad to do it, as it means children are safer.
“We have seen a sharp rise in consumers calling us to confirm that our furniture is in fact made domestically from hardwoods, and ensuring that our finishes are non-toxic,” Alvarez said.
“This challenge will turn out to be an important competitive advantage for those manufacturers that can instill that trust factor in the consumer,” he continued. “For example, we no longer offer drop sides on any of our cribs. We made this change in the fall of last year, and I'm sure that our dealers and consumers appreciate the fact that we are proactively doing everything we can to produce the highest quality and safest product in the industry.”
Capretti has moved fast as well. “We've taken a proactive approach, and wanted to have all the testing lab results first,” Schwartz said. “No one is more compliant than we are, and we weren't going to rush production or risk recalls.” The biggest battle Capretti has faced is elevated security levels at U.S. ports, where its Chinese imports get X-rayed.
On the flip side, Young America announced late last year that its furniture would be produced stateside. “That means a lot to the consumer,” said Walker. And Young America already has its paper trail tracking products back to their sources — a procedure that “puts a big burden on all importers,” he said.
Tracking has been easy for Best as well. “The people we deal with were so far ahead, they had all the paperwork in place,” said Sicard.
For this year, Best is adding power to its juvenile recliners. Sicard said Best continues to cut its lead time, with a goal of delivery under two weeks — even though the chairs are built to order. The fabric merchandiser watches bedding trends, to make sure upholstery will match what parents are putting in their nurseries. “It's one of the fastest things that changes,” he said. “Mothers want the newest thing out there.”
Newport Cottages has seen a change in consumer habits. “We've noticed an increase in sales of certain types of pieces … that can easily be transitioned into a guest room, or used in the bedroom as the baby grows,” said Alvarez. “A quality piece of furniture can last many years, even generations, and people want to make sure they can take advantage of that longevity.”
With retailers in mind, Newport Cottages has changed its Web site and increased Internet marketing efforts.
“Many specialty retailers complain that the Internet is making competition more difficult for them. This challenge is not going to disappear, but will intensify in the coming years,” said Alvarez. “We are developing a marketing plan that will empower our retailers, open them up to increased store and Web site traffic, and give them other tools that can have a significant impact on sales.”
Young America is making sure its customers know its four-part story: color, safety, Greenguard and sustainability. “We meet and exceed CPSC requirements, and have our own standards,” said Walker
While Young America spent most of its energy last year on the transition to its Made in America concept, new collections are expected to debut at the ABC Kids Expo in October. “With 60 finish options, the infant and youth collections can mix and match across the line,” said Walker. “It gives consumers more choices.”
Capretti focuses on its target niche — a small dedicated core group of independent retailers. “We stay in constant contact with them,” said Schwartz. “Price is not our deciding factor. It's a very competitive market … we focus on delivering quality in a timely manner. We try to explain to them why they shouldn't try to compete with mass merchants, at the level of service they do.
“It's difficult for them to understand. With foot traffic going down, they can't afford to sell consumers lesser goods. Their expenses and overhead aren't changing.”
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