Upholstery gearing up for robust activity
Cindy W. Hodnett -- Furniture Today, January 28, 2013
LAS VEGAS — Pantone's choice of emerald as the color of the year might just be the perfect pick. As the 2013 market season gets under way here, industry leaders are expecting strong activity in the months ahead, and green hues could be a spot-on symbol for robust sales in the upholstery category.
In the Furniture Store Performance Report published by Furniture/Today in October, more than 9,400 storefronts reported significant increases in the median price of stationary sofas. Fabric stationary sofas had the second greatest price increase of all categories included in the survey, averaging 33.4% more in 2012 than in 2010 with a median price point of $799, up from the previous $599.
The increase is substantial, especially for a market period dominated by numerous economic challenges.
For the Las Vegas winter market, many manufacturers are focusing on providing expanded product options, on-trend styles and quicker delivery times. Industry representatives say that customization programs give retailers more choices to offer consumers in the store, and faster delivery times provide important added value.
"Las Vegas is the first national market of the year and this will be our biggest introduction ever," said Chris Podschun, president of LaCrosse Furniture. "We are introducing a new upholstery line named Ahz, and this line will be ‘Made in Kansas-USA' using many domestic fabrics. It will be available with a special-order handle of fabrics for a $100 retail upcharge, and sofas will be priced to retail from $599 to $799."
United Furniture Inds. is introducing four new stationary groups in Las Vegas as well as several new accent chairs. Each stationary group will include a sofa, loveseat, chair and ottoman.
"We're focusing on a cleaner, more transitional product in stationary," said Greg Morgan, director of merchandising for United. "Also, we have a new wood base sofa that goes more transitional/traditional. And we are excited about bringing back true velvets to the marketplace. We have a supplier who has introduced some new velvets this season and we are one of a few manufacturers showing them in Vegas. We are also introducing a new collection of six cotton prints on accent chairs that will be domestically produced."
Marshfield Furniture is adding new products to its Simply Yours collection, increasing the total number of SKUs to 41. The company is also introducing Essentially Yours, a new collection that offers "simpler choices" according to company President William Mork.
"Essentially Yours offers a particular handle of fabrics for one price," Mork said. "For the consumer, too many choices can be overwhelming. This simplifies the process."
He added that he believes furniture manufacturers need to rethink their business strategies. Pointing to an upswing in employment and consumer confidence, he said the improving economy offers opportunity for manufacturers to redefine themselves and their products.
"In my opinion, we as an industry are fighting for discretionary income, which some estimates place as less than two dollars out of every hundred the consumer has," Mork said. "Picture someone in front of a big flat-screen television playing a Wii or an Xbox and sitting on a beanbag thinking it is furniture. That's what our competition looks like.
"We have to help people view furniture aesthetically, as a comfortable place to be nesting," he said. "For all too long, our industry has been focused on price, price, price. You don't see that happening in the electronics category."
Chuck Massoud, president of Massoud Furniture, agreed.
"The commoditization of our industry hasn't served one company or one person well, just the opposite," he said. "It's imperative to get out of the ‘we're just selling a commodity' mindset."
He said Massoud Furniture has "no barriers on customization." He added that the company offers a program that allows buyers to decrease or increase the length of a sofa, change the seat depth or base and switch the number of seat cushions and back pillows.
"We're basically operating as a custom factory. Our good customers are sending photos of what they want to us and we're building it," Massoud said.
AICO/Amini Innovation Corp. is taking a multifaceted approach to reaching buyers. Chuck Reilly, senior vice president, said the AICO team has an eclectic method for merchandising product. He said branding efforts have been a key focus, as evidenced by the collaboration with actress, artist and designer Jane Seymour.
"Michael (Amini, AICO's CEO) identified an opportunity to attract attention to things we are not known for by collaborating with a known consumer icon," Reilly said. "Consumer advertising to take advantage of Jane's popularity and partnering with major magazines like Architectural Digest, Elle Décor and House Beautiful have been major initiatives in branding Michael Amini to today's consumers."
Emerald Home Furnishings is continuing to develop Correlates, the company's "whole room/whole home" program with coordinated pieces for every room. It offers dealers several options to mix upholstery and wood products from the same factory in one container, increasing the variety of products that can be stocked and limiting inventory exposure on a single product.
"We offer a wide variety of styles and designs developed to both complement key pieces of specific collections for consumers looking for a coordinated look, and to also stand alone as individual pieces for those mixing styles in more eclectic home decors," said David Beckmann, president of Emerald. "For example, we have introduced accent chairs in an array of colors and covers which perfectly tie in with specific sofas, but would also serve as great standalone chairs in any room.
"One of the most dramatic shifts in our business over the last five years has been the continuing trend of consumers and retailers demonstrating increased desire for quality, durable furniture that is also full of features and style," Beckmann said. "Customers today expect their furniture to not only look good, but also last."
Massoud thinks that a renewed appreciation for quality would serve the industry well.
"Look ahead by going back 10 years," he said. "We have had a decade of pure deflation and what did we gain? I believe an appreciation of quality is going to come back to the industry, and I think there will be a better segregation of products - low, medium and high. It's the only way for the industry to survive.
"Stores have to start regaining their personalities, and it is up to us as an industry to help them," Massoud added. "We have a lot of ground to regain, and we can't have the economy make or break us. We have to tell our story to the consumer."
"Our better-priced products are selling well, and this means dealers are making more money per square foot," LaCrosse's Podschun said. "You have to merchandise differently to make money, and it starts with beautiful product displayed well."
Comfort Design is introducing a Mission upholstery collection that is domestically produced. Upholstery items include a sofa, sofa-sleeper, loveseat, chair and coordinating reclining chair.
"This product introduction continues our strategy of debuting domestically made, classic and unique, designer-inspired stationary upholstery," said Phil Cooper, executive director of the company. "We are building a brand and reputation for style, comfort and value in the better upholstery market. We offer premium made-in-America furniture available for special ordering."
Pacific Furniture Inds. is introducing 40 new groups ranging in retail price from $499 to $899. The company is expanding its feather-down program significantly for Las Vegas and anticipates a strong year.
"We continued to see double-digit growth going into 2013 and believe that it is primarily fueled by consumers' desire to buy custom, local hand-crafted American products," said Nathan Hagglund, co-owner of the company. "Our style focus continues to be on casual contemporary and transitional with new introductions in the mid-century modern and urban contemporary categories."
Klaussner Home Furnishings continues to focus on style and speed, according to company President Bill Wittenberg.
"Klaussner's business model is quick delivery and custom order capabilities," Wittenberg said. "We continue to broaden our styles and selections of fabrics to meet the demands of consumers, which addresses the need for eclectic style trends. Selection and speed have never been more important to our retail partners.
"The move away from our vertical format strategy of company-owned and franchised stores has had a positive impact on our company," he said. "It has allowed us to focus on domestic manufacturing and marketing of imported product and has also allowed us to expand our U.S. distribution. The changes in China have also had a positive effect in our domestic core upholstery business. The value gap between domestic upholstery product and imported upholstery has narrowed significantly in recent years."
Wittenberg is also positioning Klaussner for growth by preparing for the industry's evolution.
"There will be fewer manufacturers and retailers 10 years from now," he said. "There will be a different generation buying furniture through multiple and currently unknown channels of distribution. Regardless of the channel, the Internet will play a role in every transaction."
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