Accent Makers Market Magic of Luxe
Heath E. Combs -- Furniture Today, April 20, 2013
There's magic in luxury goods.
Don't believe it? Ask Rod Lambeth, president and CEO of Tomlinson/Erwin-Lambeth. "I've had a $400 Belk suit and a $2,500 custom made suit. And when I put on that $2,500 custom made suit you couldn't touch me. I was a cat dog," Lambeth said. "It's part of that luxury mystique."
As stock market improves and the high-end sector's finances get healthier, some furnishings companies are benefiting. Lambeth said luxury consumers didn't necessarily spend the recession hiding - but were perhaps shoring up their finances.
"People who have a lot of money can make a lot of money when no one else has it. So my belief is the (high-end) furniture business didn't fall off because people were scared or didn't have money, in my particular case," Lambeth said. "It fell off because they had better options to earn money than to spend it on furniture."
Rudy Van Thiel, founder of Van Thiel & Co., wasn't expecting much at the recent Maison & Objet show in Paris, considering a shaky European economy.
"We had the best show ever. In an economy - Europe - that is really in trouble," Van Thiel said. Surprisingly, sales were best to economically troubled Spain.
"Who do you sell in Spain? To the more luxury resort areas, the islands, the vacation places - the places where money is. There is of course still a lot of money in the market," he said.
Van Thiel said that in the U.S., the retail landscape for high-end has changed dramatically in the past 10 years, shifting away from big regional players.
"That market has gone somewhere. It went to the niche stores and the smaller people that understand that times are changing. It's a big shift," Van Thiel said. "They are more personally managed. It's usually the mom and pop kind of idea."
A challenging sales environment in recent years has meant protecting yourself, said Cecil Adams, creative director at Currey & Co., adding that higher-end goods were not completely recession proof.
"We took a dip, but the good news is that it was not a drastic dip. Even so, there was a softening in the business and while we opted to become a bit more cautious in terms of inventory, we never reduced our advertising or our number of introductions," Adams said.
The company kept about 90% of its inventory ready-to-ship.
"By taking that responsibility in order to be loyal to our customers - which includes lots of designers - they, in turn, were loyal to us," Adams said.
While housing was hit hard by the recession, there was a silver lining, he said.
"Lots of affluent homeowners who had planned to move could not sell their existing homes so they called in designers to rejuvenate...and that worked in our favor due to our strong base of customers who are designers," Adams said.
Fewer high-end stores meant that suppliers became proactive about protecting their customers' turf. For Jonathan Sowter, CEO of Jonathan Charles, that meant helping high-end retailers protect their brand.
"Protect them and don't flood the Internet with your product and they have a fighting chance," Sowter said.
"One example of how we protect the retailer is we don't put a brass plaque inside our drawers. Sounds like a small thing but to a small independent high-end store they don't always want the customer seeing the brand, as it is too easy these days to shop online and find it cheaper," he said.
Tomlinson's Lambeth said that being known behind the scenes is also part of the game, since exclusivity means not being shown at price-driven stores where volume sales of an item can make it less unique for luxury customers.
"They don't want what's in everybody's apartment," he said.