Fabric Protectant Companies Eye Resurgence
Gary Evans -- Furniture Today, May 4, 2011
Consumers can use stain and soil removers like Guardian’s Crypton to erase damage to their upholstery.
HIGH POINT - Furniture protectant companies may have new processes and coatings but what they really are working on these days is re-establishing their reputation for providing customers with reputable and needed service.
The industry, which sells warranties that protect upholstery, leather and wood furniture from spills, stains, rips and tears, has been picking itself up after the No. 1 supplier, Stainsafe, closed suddenly and left retailers and their customers out in the cold.
Restoring the luster of a business that in the past has delivered on the promise of win-win for both retailers and their customers is listed as protectant companies top challenge for the immediate future. Making sure that luster remains intact is the second biggest challenge.
Jack Castella, Sr., a former longtime president of Guardian and a retailer for 18 years, has a lot to say on the subject. Castella now heads a new company called NuGuard, based in Sparks, Nev., whose products feature Scotchgard.
"Image is a challenge we did not create," he said. "In spite of many years of reliable service to retailers, we are still a part of the industry that is not always viewed with respect. Aside from the environmental challenges and diminished revenue base, the perception of the warranty companies in the eyes of the retailer, salesperson and consumer has been badly damaged over time. This loss of confidence has diminished the ability of several companies to survive in the long run."
According to Castella, the furniture protection marketing wars of the past decade have been hard on both retailers and the warranty suppliers because market share was purchased with price rather than earned.
"The collateral used to purchase market share was a vision of unlimited coverage and a complete loss of respect for the well-being of the customer we serve," he said. "Customer service has lost its place in the equation and has been replaced with the continued and short-sighted desire to create a financial bubble within our industry."
Most retailers know the purchase of a warranty can increase the dwindling margins of a sofa sale and add value to the product by giving the consumer piece of mind that if anything goes wrong, the furniture is covered. And even in this era of falling prices, retailers can adjust their profits on warranties and make money - although not as much - on a $199 sofa as well as a $3,000 sofa.
The program works like this: A customer buys a piece of furniture, and the sales person sells them a warranty. A store technician sprays on a repellant purchased from one of the warranty companies. Everybody is happy. The 
Consumers’ environmental concerns have presented a challenge to furniture protectant warranty companies.
salesperson made extra commission. The store increased its margin. The protection vendor makes money. And the consumer is happy because if anything happens during the coverage period, the warranty company will provide a technician to fix the problem or replace the merchandise.
But elements of the process are changing, causing some concern among warranty providers. The traditional process of spraying is called a "wet" treatment, and involves chemicals to repel damage. But in recent years some warranty providers have introduced a "dry" treatment, which provides a warranty with no chemical applications at all.
Several warranty executives are not comfortable with dry treatments, although most offer them as an option. But they are popular with retailers, who can forgo the process of removing cartooning or plastic from a sofa or sectional, spraying it, waiting for it to dry, and delivering it without getting it dirty.
"We're trying to stay with a wet program because we're actually selling a product that you do spray on the furniture, and it sets up a protectant against stain," said Don Smith, president UltraShield, a long-standing supplier to the industry.
"If we make any changes, it will be because of the competition," Smith said. "Do we have a dry warranty? Yes. Do we promote it? No."
He added, "We know it's a service, and we know that whatever you do, you have to take care of your customers. To do that on a dry warranty, claims have to go up because you have nothing on there to protect," he said.
Smith agrees that there was a loss of confidence in the business from retailers shaken by the Stainsafe closure, but believes it's been overcome. "The key is that it's a very profitable part of the business, and, if done properly, it's a very good benefit for the customer. It should be kept on the level where there is no question in the customer's mind that it's a true benefit to them."
Guardian offers both wet and dry options, but includes a bottle of stain remover with a dry warranty so consumers can clean up their own spills, which works 88% of the time, according to Tim Vaughan, vice president of sales.
But the key challenge for Guardian, another longstanding supplier, is providing products for an increasingly environmentally-conscious customer.
"The introduction of green products is a growing concern, and we are addressing that for fabrics and all upholstery and case goods products," he said.
In the past 18 months, Vaughan said the company has entered into an exclusive merchandising agreement to represent Crypton in the retail furniture segment. "They are an entire group of environmentally- friendly green products whose chemicals have been approved by the EPA (Environment Protection Agency), with superior cleaning and stain repellency properties."
During that time, 16 of Furniture/Today's Top 100 retailers have either purchased or switched to the new brand, Vaughan said.
He said Guardian's business "is extremely strong" because its products and sales training are helping salespeople "make money on furniture that has already been sold" - an easier task than increasing store traffic for possible purchases.
"The reason our business is so strong is that we're showing retailers how to get additional profits on existing sales versus the difficulty of future sales," he added.
Vaughan said Guardian has the stability and backing of parent company RPM, a world leader in chemical coatings that include Mohawk wood finishes, and maintains a center near Hickory with 39 customer service representatives to service warranty customers.
"We're going to back up claims," Vaughan said. "We have an A+ rating with the Better Business Bureau."
NuGuard also has a high awareness of increasing environmental concerns and regulations and products that will provide product performance that will serve consumers as well as mitigate claim expense.
"Reduction of claim activity and expense are the drumbeat of survival in our marketing segment," Castella said. "Nearly all the suppliers who have polymer chemical programs are faced with sun-setting regulation that requires the reduction of carbon within the product."
By 2015, all suppliers will be required to reduce their current technology of Carbon 8 or Carbon 12 technology to a minimum of Carbon 6, Castella said. With fewer carbon molecules within the polymer, he said extensive research will be required to achieve performance and sustainability within the environment.
The true challenge, he said, is to make the chemistry perform at the expected level. "Some of the suppliers like 3M (makers of Scotchgard) already have Carbon 4 technology with demonstrated high performance. Performance is truly a value that can be sold successfully time after time."
"After all," he added, "is that not what the customer expected when they weighed the value of stain protection?"
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