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Buyers seek fresh looks, values

Clint Engel -- Furniture Today, November 4, 2011

HIGH POINT - Retailers attending the furniture market here say business conditions remain challenging back home and have gotten even tougher since Labor Day.
     But their shopping lists are long as they try to entice consumers through the door with fresh looks and even better values.
     Buyers will be splitting their time between finding the type of incredible deals that draw traffic and shopping for step-up goods to satisfy consumers who are making fewer furniture purchases but spending more when they finally pull the trigger. Some also say "Made in America" continues to gain traction in the marketplace and not just in the upholstery category, so they will be on the lookout for more domestic offerings and the shorter lead times and inventory requirements that come with them.
     Key categories that have held up even in tough times, such as bedding and motion upholstery - especially power motion - will get extra attention, as will casual and modern styles across the board.
     "We're looking for compelling values. That seems to be the only thing consumers are responding to right now," said Terry Oates, owner of King's Great Buys Plus, with stores in Evansville, Ind., and Owensboro, Ky.
     Oates said business has been flat to slightly up this, but the four weeks following Labor Day were difficult. "A lot of folks are ill at ease with the wild swings in the stock market," he said.
     Compelling values could be recliners that are "a good scale with nice covers" that King's can retail for $299 to $399. "That seems to be exciting customers," Oates said. Sectionals in the $999 to $1,499 range also "have been extraordinarily popular of late," he added.
     Oates said he's not seeing a great deal of movement in case goods outside of occasional tables. Consumers aren't buying bedroom furniture for now, choosing to focus on rooms where they entertain.
     The one exception in the bedroom is a premium mattress set. "Bedding has been a bright spot and one of the luxuries people will turn loose of a little money for because it makes their quality of life a little better," he said.
     King's does well with Tempur-Pedic, with Serta's exclusive Bellagio line - for members of buying group Nationwide Marketing Group - and with Serta's iComfort gel memory foam beds, which Oates said "may be the single most compelling value the bedding industry has seen since latex bedding came out."
     He will be shopping both suppliers here to see what's new. His other key stops will include Ashley, Lane and Klaussner. Oates said Klaussner seems to be developing a wider rage of price points appealing to a broader range of consumers.
     With new competition recently entering the market in the form of Living Spaces, San Diego-based Jerome's President and CEO Lee Goodman said his company needs to step up its game, which will make this market more critical than most.
     Goodman said Jerome's has been lucky, "considering the world is falling around us," with same-store sales up nearly 5% for the year.
     But just as many others are reporting, he said the period since Labor Day has been tough. The main reason Jerome's has shown sales growth, he said, is because it has taken market share from competitors.
     Jerome's is shopping High Point for ways to attract both the value customer and those willing to pay a little more for style and innovation. Its buyers will shop for sofas in the $299 to $499 range from suppliers such as United Furniture, as well as the exciting power motion category in leather. The retailer now tops out at about $1,399 in the latter category and is looking to fill in at the top end as well as push up a price point or two - possibly to $1,599 or $1699.
     "That's just been a huge category for us," Goodman said. Among his stops for leather motion at the higher end of his price spectrum will be Era Nouveau.
     Jerome's also wants to recast its bedroom offering. A spate of price increases passed through to consumers has hurt the value story of its current lineup and slowed sales velocity "to the point that it didn't make sense" anymore, he said.
     While Goodman believes Jerome's can command higher prices in the category, its current lineup is performing poorly and "is vulnerable to being replaced by other product that is a much better value," he said. The retailer will shop the category aggressively across all price points, from $799 to $3,299 for four-piece groups.
     Among his stops will be A.R.T., Magnussen Home and Folio 21, the new case goods importer launched by industry veteran Bill Benton.
     Latex bedding, particularly natural latex with an environmental message, continues to perform well for Mueller Furniture of Belleville, Ill, in greater St. Louis, said General Manager Mark Mueller. The retailer has done well with latex from Bemco and with Sealy's Embody line, but Mueller is interested in "seeing some of the other options out there."
     He also wants to see more of Bradington-Young's Envision collection, with affordable and transitional sofas retailing for about $1,500 in top-grain leather. He also will shop formal dining room for something not too ornate, to replace the Avignon collection that Universal dropped.
     Mueller has done well with higher-end merchandise, such as specialty bedding and made-in-America Amish case goods, so it will be shopping for more here along those lines. Some Amish producers are offering transitional, updated styles and "the quality level is much higher than what you see with a lot of imported goods," he said.
     "Customers see that and appreciate that," Mueller said. "They want to buy American, but they also want what they want, which is more updated styles."
     Mueller said business as challenging, with consumers prone to shopping around holidays and special events, but he added that the store has worked to leverage these peak traffic periods and has been rewarded with its best sales year in about 10 years.
     At Fort Lauderdale, Fla.-based City Furniture, which just announced aggressive expansion plans, the emphasis will likely follow the consumer's desire for more modern and contemporary looks, said President Keith Koenig.
     "We have some demand for some European contemporary," he said, adding that City also will be looking for more lifestyle or casual looks, citing retailer Pottery Barn as a style leader.
     At Salt Lake City-based R.C. Willey, business has been up every month but one this year and President Jeff Child and the company's buyers will continue shopping for the kinds of items that drive traffic through the doors.
"Motion is very hot, so we're going to keep trying to improve our assortment," Child said.
     And the retailer will try to get a better feel for bonded leather in its various forms and names here.
     The Berkshire Hathaway-owned company sells some bonded leather upholstery at starting price points but, "we haven't been real crazy about it," and has been slow to embrace the category, he said. However, Child said he feels the retailer now needs to strengthen its offering in the category.
     Home office business also is starting to pick up a bit, so R.C. Willey will work on that category, too.
     "And then we're just going to be looking for good deals we can use to drive people into the stores," he said.
     Child is looking for the same thing his customers want - something that calls them to action. Consumers are still buying, "but you have to be pretty aggressive to get them in the store. There's got to be something going on ... to get them to come in," he said.
     "They're there not just waking up one morning and saying, ‘Let's go buy some furniture.'"

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