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Labor Day Sales Solid

Clint Engel -- Furniture Today, September 16, 2011

In a new Schneiderman’s Furniture commercial, a man overseeing his furniture delivery from the store assures his neighbor that he didn’t get a raise or win the lottery. “We’re not rich,” he says. “Our furniture just looks that way.”HIGH POINT - Furniture stores across the country reported solid sales gains during the important Labor Day weekend, some saying it was a continuation of improving summer business and others saying it was a welcome change of pace.
     What they weren't saying was that these results necessarily mean good things to come. Most expect that the tone for the rest of the year will be set by continuing economic turmoil, weak consumer confidence and jobs numbers - and consumers' penchant for narrowing their shopping to special deal periods.
     Resurgent long-term, no-interest financing programs and other aggressive promotional tools took center stage during the Labor Day weekend, giving retailers at least a temporary reason to cheer.
     "I have to say it was a big up for me," said Larry Schneiderman, president of Lakeville, Minn.-based Schneiderman's Furniture. "Things have been so hard to predict the past few years, and of late, so much in the news (has been negative) - consumer confidence being the No. 1 problem."
     But for a four-day holiday period starting Sept. 2, Schneiderman's sales were up 21% over the same period a year ago, the best increase in several years, he said.
     "It's such a pleasant surprise," Schneiderman added. "It's too early to make a judgment on this, but I‘m thinking the change in our television advertising might have played a big role."
     About 60 days ago, after conducting consumer research, Schneiderman's began airing new TV spots addressing a common consumer misperception that its furniture is more expensive than it is. One ad features a pizza deliveryman looking disappointed in his tip while scanning the living room furniture. The homeowner says, "We're not rich. Our furniture just looks that way."
     During the holiday, Schneiderman's also ran price-oriented promotions, including four-year, no-interest financing and a truckload mattress sale.
     Al Tahan also was pleased with the weekend results, especially since the weekend before was a disaster at one of his three Utica, N.Y.-area Joe Tahan's Furniture stores. Heavy rains from Hurricane Irene had led to the flooding of the parking lot and 42,000-square-foot showroom in Yorkville, N.Y.
     "It went very very well, considering the herculean effort it took to open by Labor Day," he said. "Traffic was very good and business was good as well, so it's encouraging."
     Tahan's promotion included a "make-an-offer" event on remaining stock in its clearance outlet and a direct-mail push for its other two stores, offering four-year, no-interest financing with no minimum purchase. He said both offers worked well, and that the media attention the store received after the flood damage didn't hurt either.
     Some consumers came in specifically looking for deals on flood-damaged goods, but Tahan couldn't sell them until he sorts things out with an insurance company.
     Considering the inconsistency of sales this year, Tahan said it's difficult to read anything more into the strong Labor Day other than what it was - a good holiday sales weekend.
     "Right now, it's just too early to tell if this is a trend," he said. "The highlight of the year has been the holiday sales. People have been looking for that extra reason to shop. If you have a strong offer on the holidays, that does seem to be working."
     For the three-store Nader's La Popular of Gardena, Calif., "It was the best weekend we've seen in months," said George Nader, vice president and co-owner of the promotional to midpriced stores.
     He estimated that sale were up roughly 20% from a year ago for the holiday weekend. Nader said the company is cautiously optimistic this could be the beginning of a good fall and holiday season.
     One thing Nader's won't do in this unpredictable market, though, is cut back on advertising as a way to save money, he said.
     "You're not doing your business any good by cutting back," Nader said. Instead, "we might try throwing in something new."
     Jeff Seaman, CEO of Seffner, Fla.-based Rooms To Go, characterized the holiday weekend sales as "pretty good." The retailer combined its 20th anniversary event with a holiday promotion that included coupon savings and no-interest financing until January 2016.
     The only place the retailer could have done better was along the Gulf Coast, which was soaked with rains from Tropical Storm Lee, he said.
     Seaman declined to say how much business was up overall compared to last year, but noted that sales softened Rooms To Go’s 20th Anniversary Sale concluded with a “grand finale” on Labor Day weekend and featured coupon savings and no-interest financing through January 2016.in 2010 in the two months leading up to the November elections, and that the comparison was pretty easy.
     Seaman said he believes the healthy Labor Day is a continuation of pretty good business for RTG over the summer.
     "But I think the world is looking a little dicier, so I'm a little cautious from here," he said. Indeed, that concern has led RTG to make small strategy changes.
     "I'd be a little hesitant to add infrastructure in this environment - extra warehouse space, stuff like that," he said. "Even though business would suggest it, current events don't."
     Aminy Audi, president and CEO of Stickley Furniture, said she was pleased with business at the company's 14 high-end retail showrooms. Based on early numbers, she said, Labor Day weekend sales appeared to be on par with last year.
     "I think it was good, but not necessarily great," she said. "I can't look at this and say it is our best Labor Day, but given the economy and given the times, I am very grateful for where we are."
     To drive business, Stickley gave customers 5% off for up to $1,000 in purchases, an additional 7% for up to $5,000 in purchases and an additional 10% for more than $10,000 in purchases.
     "We all have to be responsive to the economy and offer a compelling reason for the customer to buy," she said, adding that Stickley also continues to educate consumers about its quality and value story.
     Kittle's CEO Eric Easter said the Indianapolis-based retailer had the best four-day Labor Day event in its history, with same-store sales up in the mid-20% range. And that was on top of an outstanding Labor Day event a year ago.
     "It was over-the-top good," he said, adding that the 12-store retailer offered deep discounts and three-year, no-interest financing for its private preferred customers (two years for others).
     "We were all over TV, ROP, broadsheet inserts in the paper, billboards in our major markets of Columbus (Ohio) and Indianapolis, direct mail. It was kind of an all-out-on-all-fronts effort," he said.
     And although the results added to an already good year for the chain, even Easter isn't ready to say it's a sign of better times ahead.
     "The world is so fickle right now," he said. "You enjoy these moments."
     Associate Editor Thomas Russell contributed to this story.

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