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NHFA will still pursue Preferred Retailer Program

Association can carry on without HGTV, says president

Clint Engel -- Furniture Today, August 18, 2008

HIGH POINT -- The president of the National Home Furnishings Assn. sees an opportunity in the loss of HGTV for a co-branded Preferred Retailer Program.

NHFA has been working for some time to develop a similar program and most of its elements still exit, Doug Kays said in a memo to the media.

While Kays said NHFA is disappointed in HGTV's decision to table the program for now, "we see this as a huge opportunity for a redirected effort," he said.

"The HGTV name gave us a huge brand exposure and instant consumer creditability," said Kays. But he added that those benefits "were only the icing on the cake."

HGTV told the NHFA last week that the TV network was delaying its plans for a co-branded Preferred Retailer Program, apparently after a months-long push failed to garner enough signed commitments from retailers.

The two groups said they will continue to work together and will revisit the plan later, but gave no indication of when.

Kays said NHFA won't be waiting around. The core of the program was the Web site, the related information, the preferred retailer designation and the store locator feature. The NHFA still has those components in development and will be able to put them to use, he said.

"I am not so naive as to totally discount the strength of the HGTV name," he said. "I certainly understand the loss that the program has endured. However, there were costs to the benefits HGTV was bringing to the table."

And now those costs are less for NHFA members, he said.

HGTV, for instance, had owned the proposed Web site, but now NHFA will own it and control the advertising revenues that it generates. Those can be driven back to support a national advertising campaign, he said.

"Additionally, without HGTV controlling the ad sales, NHFA can approach ALL components in our industry without regard to existing HGTV advertising contracts," Kays said.

He said NHFA's board of directors will discuss its options this week at a regular meeting in Pasadena, Calif.

He couldn't say exactly what a revised cost to members would be because the board has yet to discuss pricing. But he said, "It looks like the program would cost lest than one-third of the cost under the prior program"

The minimum cost to a retailer under the co-branded program was going to be about $3,500.

In the months since the announcement of the NHFA-HGTV plan, the groups met with hundreds of retailers and had about 100 companies - representing about 375 stores - sign letters of intent. Retailers with more than 1,000 stores indicated serious interest, Kays said.

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