Monthly Issue
From Home Furnishing Business
May 10,
2018 by HFBusiness Staff in Business Strategy, Industry 
“The term ‘solid wood’ lost a lot of meaning during the flood of imports, starting in the early 2000s with China joining the WTO,” says Gat Caperton, president of Gat Creek Furniture. “Five to 10 years ago, many retailers would say to me, ‘No one cares about solid wood anymore.’ Today, people care again.”
High-quality, high-end American-made furniture should be in demand for a lot of reasons, says Charles Curry, vice president of sales and strategy, Simply Amish. “American ingenuity has created some of the finest products in the world. Is it all about price? To some consumers it is,” he says. “Retailers are smarter than ever, but are losing money by not catering to those buyers who want higher-end product, customized to their exact wants and needs.”
Renewed Interest
Some of the reasons for the renewed interest in solid wood, says Caperton, are quality and the growing importance of having a healthy home.
“Solid wood is still one of the best building materials ever available,” he says. “It’s long-lasting, beautiful, and repairable. The furniture makers of the past were often called joiners—these are people who knew how to join two pieces of wood together to make something functional and long-lasting.
“Healthy home is about not bringing chemicals into the home. MDF and plywood are potential carriers of formaldehyde and other VOCs,” Caperton adds. “With solid wood, you know what you get, and you know that it’s natural.”
Luke Simpson, president and CEO of Durham Furniture, based in Durham, Ontario, Canada, expects growth in solid wood to continue “as consumers want to own quality more and more.”
“We’re seeing consumers return to heirloom-quality solid wood product after experiencing the shortfalls of lesser quality product,” says Simpson. “For many, ‘solid wood’ includes those products created from wood, including plywood, medium density fiberboard, and veneer. At Durham, solid wood does not include these products—all of our pieces are pure solid wood, including end panels and drawer components.”
Furniture becomes a part of your life, says Curry, “so case pieces that are funky, askew, and aren’t even wood, are akin to putting a rusted, oily engine block in your living room, and using it as a coffee table. Although that’s being sold as steampunk.
“American companies who still manufacture domestically would be well-served, in my opinion, to focus on design, quality, and instead of bludgeoning each other, band together to create a marketing campaign that resonates with American furniture buyers, gets them excited, and gets them into stores,” he adds.
A Trend Toward Softer Woods Online
Keith Covey, president of New Ridge Home Goods, an online retailer of birch storage products, has seen a trend toward softer woods, particularly pine, in the online space.
“That is part and parcel to the fact that the price points are more important than the actual wood,” he says of the uptick in pine. “Everybody’s using pine because it gets you to the price point where you need to be.”
New Ridge Home Goods has basically one line, Covey says, and has found its greatest success in what could be thought of as an unusual space—the bathroom. “It’s kind of been an underserved room in the home, [that] the traditional furniture store has certainly forgotten,” he says.
“For us, space savers, bathroom stools, shower stools, ladder shelves, any of the occasional furniture you might find somewhere else, the solid wood end of it has been very successful.”
The Right Price
Price points for New Ridge Home Goods are fairly low. “I would say our key pieces are $99, and that really goes back to the dot-com end of things,” Covey says. “It becomes very crucial to hit those specific price points for folks—$99, $149, $199. You can certainly find products for less money, but we try to do a better product.”
Gat Creek’s bestselling line is called Vineyard. “I created it 17 years ago,” says Caperton. “It’s based on New England Shaker, Arts and Crafts design.” Bedroom cases range from $2,000-2,500 in the collection, with a dining table and four chairs around $2,500-3,500.
The Defined Distinction Bedroom is Durham’s bestseller, with the four-piece collection, including queen bed, nightstand, dresser, and mirror, retailing for $6,500-7,500.
“The combination of solid cherry construction available in multiple finishes, brushed stainless steel bases, and dealer support of the collection have made it a top seller for the company,” says Simpson.
A bestseller for Simply Amish is the casual contemporary Auburn Bay dining table, with a retail price of $3,342 and available in soft maple and six other hardwoods, with custom surface treatments available. Another of their bestsellers is the modern-style Wildwood Cross Base end table, available in walnut and six other hardwoods, retailing for $1,620.
Contemporary Styles, Customization Find Popularity
Caperton describes Gat Creek’s second best-selling line, Sabin, as a contemporary take on classic forms. Their fastest-growing collection, Monaco, is also a contemporary take on traditional.
Contemporary is a bestseller for Durham Furniture as well. “In the last year or so, our bestsellers have been more contemporary than traditional,” says Simpson. “The majority of our contemporary lines have been introduced in the last three years.”
Durham offers more than 40 finishes on their collections and has found customization helps drive sales. “There was a time when solid wood was only offered to consumers the way the manufacturer presented it,” says Simpson. “Today, consumers want their purchases to reflect themselves, so providing customization options is the biggest change we’ve seen in the last few years.”
Designs are getting very creative, Curry notes. “You’re seeing larger American companies do designs that traditionally came out of boutique builders,” he says.
Caperton has seen a shift in colors and finishes, from warm tones to cooler. “Cool tones are grays, whites, and ‘walnut’ brown,” he says. “A secondary trend is away from glossy and thick finishes. People prefer a close-to-the-wood finish. This type of finish looks and feels more natural. Thick or glossy finishes too often remind people of plastic.”
April 10,
2018 by HFBusiness Staff in Business Strategy, Industry
But survey the extra-large kitchens, great rooms and even family rooms of many of today’s homes, and you’re likely to find a dining table and chairs. Granted, it’s probably used for a lot of other activities besides eating, but at meal time, the homework papers and craft projects disappear – only to be replaced by plates, cups and utensils.
So dining room furniture is anything but dead. Producers say the category is still very vibrant, but it clearly has taken a sharp turn away from formal.
“The floor plans in newer homes certainly are more open, so you’re dealing with a space that is being used differently,” said Neil MacKenzie, director of marketing at Universal Furniture. “We’re trying to meet that demand by having something that looks tasteful and elegant, but more functional in terms of everyday use.”
And from the perspective of MacKenzie and other executives, functional usually equals casual.
“We’re still seeing a lot of activity with larger table sizes, but with more casual finishes and a more contemporary, modern look,” he said.
Erin Sullivan, vice president of product development at Fine Furniture Design, said the dining table has become “the central command center of the home,” particularly those with open floor plans that combine kitchen, dining, living and entertainment spaces.
“Casual dining tables serve as more than just a spot for meals,” Sullivan said. “And because of their connection to other rooms, consumers need more choices when it comes to size, finish and fabric options.”
And dining room furniture producers clearly are taking a cue from their upholstery brethren when it comes to customization. And just like upholstery, customization is a rapidly growing segment of the category.
Bassett Furniture, in fact, has an entire factory in Martinsville, Va., devoted to its custom dining program, and even with upgrades that were completed about a year ago, the facility is still running at or above capacity. And Fine Furniture Design has worked with its factories in China to develop a program that offers 14 table base options, 36 finishes, more than 65 chair styles, and more than 200 fabric and leather covers.
“Consumers today want the ability to ‘make it their own’ and express their uniqueness through the products they purchase,” said Sullivan.
Another upholstery trend that has made its way to the dining room is performance fabrics. MacKenzie said Universal is seeing significant demand for such fabrics on dining chairs – largely because they have become more affordable as a dining room option, and it’s simply a common-sense choice. “It’s something livable, as opposed to something that’s lived around,” he said. “After all, when you eat, you’re probably going to spill something once in a while.”
But the open-concept floor plans in today’s homes hasn’t meant weaker demand for smaller sizes of dining tables. If anything, MacKenzie and Sullivan say it has given that niche a jolt because of the predominance of casual styles there.
“Smaller-scale round dining tables are casual in style and versatile in how they are used, whether it’s a casual card game or dinner for four in the family room,” Sullivan said. And in some cases, these tables find their way into a larger, open-concept kitchen, enabling the consumer to “create the dining experience that is just right for you,” she pointed out.
A survey of recent dining room furniture purchasers by Impact Consulting, parent company of Home Furnishings Business, showed that, to no one’s surprise, tables and chairs were the most common formal dining items purchased.
Tables were purchased by 63.89% of those surveyed, while chairs were acquired by 75%.
A buffet or sideboard was purchased by 30.56%, while a china cabinet was brought home by only 11.11%.
Other pieces were cited by 8.33% of buyers, and for Universal, MacKenzie said the company is seeing increases in multi-functional pieces such as bar carts, and bar storage units – often taking the place of a sideboard because of their increased functionality.
When asked the style of furniture in their formal dining room, traditional and country/European tied for the most responses at 22.22% each. Contemporary was next at 19.44%, followed by transitional at 16.67% and country/rustic at 11.11%.
The only other style mentioned was cottage, which was cited by 8.33%.
According to the survey, cherry, mahogany and oak are the clear leaders among the respondents’ preferred wood or finish. Mahogany led the way with 34.75%, cherry was cited by 33.05%, and oak was named by 22.03%
The only others mentioned were maple (6.78%) and pine (3.39%).
When asked how much they would expect to pay for a formal dining room set (table and six side chairs) today, 25% said it should be below $1,500. However, 55.56% said the price should be $1,500 to $3,999, and another 16.67% said they would expect to pay $4,000 to $11,999.
Only 2.77% said they would expect to pay more than $12,000.
March 12,
2018 by Jane Chero in Business Strategy, Industry
Retailers who sell the category more than just occasionally are likely to find their average tickets regularly increasing, and the number of walk-offs and be-backs regularly decreasing. When sold as part of a seating group, a set of end tables or a coffee table can round out that perfect room package. Or when sold individually, occasional pieces can be effective cash-and-carry items for the consumer who is reluctant to pull the trigger on a whole room of furniture, or isn’t in the market for that.
Not only are there styles, shapes and sizes for virtually every taste and budget, but the occasional category has come to mean a lot more than end tables and coffee tables in recent years. Of course, the three-pack table group isn’t going anywhere, but the category today also includes sofa tables, console tables, benches, magazine racks, bar cabinets, and even small writing desks.
And if the recent Las Vegas Market is any indication, many vendors of occasional furniture are becoming more aggressive with their product roll-outs. Many are adding significantly to their SKU count, expanding their assortments and devoting more showroom space to the category.
Zuo, for example, opened a new Las Vegas showroom that is dominated by offerings from its new Zuo Décor division, which includes occasional furniture and home décor products such as wall hangings and knick-knacks.
And Coaster, long a powerhouse in the occasional category, doubled down on its successful licensed collection with the Scott Brothers of HGTV fame by adding 250 SKUs to the Scott Living lineup, including dozens of new occasional pieces.
The Scott Living collection, in particular, includes a variety of styles and has no single style theme, particularly in occasional. And that’s consistent with research conducted recently by Impact Consulting Services, parent company of Home Furnishings Business.
The survey of recent purchasers of occasional tables showed that almost one-third (32.47%) purchased a table with traditional styling, and the identical number purchased contemporary.
No other style category came close. Country/rustic was the third highest at 15.58%, while country/European was purchased by 9.1%. Mission/shaker were each purchased by 5.19%, while cottage styling wasn’t named by any survey respondents.
And when it came to the type of table purchased, end tables led the way, being purchased by 54.55%. A coffee table was purchased by 38.96% of respondents, and a sofa or console table was acquired by 23.38%. (Multiple answers were allowed.)
The only other type mentioned was nesting tables, which were purchased by just 5.19% or respondents.
When asked how much they would expect to pay for an occasional table group if purchasing today, 44.16% of respondents said $250 or less. Another 32.47% said $250 to $499, while 18.18% said $500 to $999. Only 5.19% said they would expect to pay $1,000 or more.
Survey respondents weren’t too sold on the importance of packaged offers when purchasing occasional tables, such as bundling a coffee table and two end tables for a single price. On a scale of 1 to 7, with 7 being “very important” and 1 being “not at all important,” the average response was a meager 3.61. In fact, nearly one-quarter (23.38%) of respondents rated it a 1.
An equally lukewarm response was given when respondents were asked the likelihood of buying a coffee table with extra seating, such as a model with stools that tuck under it. On a scale of 1 to 7 with 1 being “not at all likely” and 7 being “very likely,” the average response was only 2.87. More than one-third (36.36%) rated it a 1.
January 19,
2018 by Jane Chero in Business Strategy, Industry
Since the end of the Great Recession, mattresses have been Old Reliable for just about anyone selling home furnishings.
Quarter after quarter, the category has registered comfortable single-digit sales increases while continuing its strong track record of profitability. Aided by the souped-up marketing budgets of many vendors, and financial incentives that include everything from local advertising rebates to special sales commissions, it consistently has produced healthy retail margins.
There are no signs that pattern is going to change anytime soon, but that doesn’t mean the category has been free from drama.
Last year began with Tempur Sealy International parting ways with its largest customer, Mattress Firm, in a classic he said/she said divorce. And it ended with Mattress Firm’s parent company, South Africa-based Steinhoff International, facing scrutiny over “accounting irregularities” that led to the resignations of its longtime CEO and board chairman.
And in between, traditional vendors and retailers got worked up about the rapid rise of so-called “bed in a box” producers who sell mattresses online and don’t mind tweaking the noses of traditional players. Mattress Firm got its nose so bent out of shape, in fact, that it sued one of the largest online players, Tuft & Needle, accusing the company of making false and disparaging statements about them in its advertising.
Another big online player, Purple, is about to become a public company (and may already be one by the time you read this). That’s important because, amid charges by traditional vendors that the sales figures tossed around by some online players are wildly exaggerated, it will give everyone a more accurate picture of the company’s finances.
(In presentations to potential investors last fall, Purple has claimed it had sales of more than $50 million in 2016 and was on a “run rate” to hit almost $200 million for 2017.)
But regardless of who’s right, the market share battle is not going to end soon, because a new online player emerges seemingly every week to challenge traditional vendors and retailers. And of course, many traditional vendors have developed their own bed-in-a-box programs, and a few online players are getting their products placed in brick-and-mortar retailers.
That’s a lot of drama for a category marked by slow, steady growth.
According to a proprietary industry model developed by Impact Consulting Services, parent company of Home Furnishings Business, bedding sales in the third quarter of 2017 were 4.8% ahead of the third quarter of 2016. That pushed the industry over the $4 billion mark in the quarter.
The 4.8% third-quarter growth was better than the first two quarters of last year, however. The industry model showed that the second quarter was 3% ahead of the same quarter in 2016, while the first quarter was 3.4% above the opening quarter of 2016.
For the first nine months of 2017, industry sales totaled $11.34 billion, a 3.8% increase from the first nine months of 2016.
Much of the growth for the past decade has been driven by specialty bedding, which essentially is any mattress that’s not an innerspring model. That point was driven home by an Impact Consulting survey of recent mattress buyers, in which roughly 48% of them said their most recent mattress purchase was not an innerspring model.
According to the survey, 40.9% of respondents said they purchased a memory foam mattress, while 4.55% bought an air mattress such as those produced and sold by Sleep Number, and 2.27% said they bought a latex foam model.
And since no respondents admitted to purchasing a waterbed -- yes, a few vendors still make them – that meant the remaining 52.3% bought an innerspring mattress.
While that may seem like bad news for producers of innerspring bedding, it’s not as horrible as it appears since many models classified as “innerspring” now have a combination of specialty foams – some of which are gel infused to help keep the sleeping surface cool -- and innersprings. These hybrid models are some of the top sellers today, despite the difficulty deciding how to label them.
Retailers and manufacturers will be happy to know that a plurality of respondents – 45.5% -- said they bought a king-size mattress. A queen mattress – the size leader in most surveys – finished second in this one with 36.4%. Another 11.4% said they bought a full-size model, and just 6.8% said they bought twin size.
Not surprisingly, bedding specialty stores were the most popular retail locations for a mattress purchase. Some 36.4% said that’s where their most recent purchase was made, while 29.6% said they used a traditional furniture store. In addition, 11.36% each said they bought their mattress at a mass merchant and on the internet, while 6.8% said they used a wholesale club.
Department stores trailed the field with only 4.55%.
And the industry’s long-running message of urging consumers to replace their mattress every eight to 10 years seems to be having an impact, as more than half the respondents (54.6%) said a mattress should be replaced every six to 10 years. Another 27.3% said it should be replaced 11 to 15 years after the purchase, and 11.4% said it should be within five years of the purchase. Only 6.8% said replacement should be in 16 to 20 years.
December 18,
2017 by Jane Chero in Economic News, Industry
Rapidly changing consumer work patterns and even more rapidly changing technology are continuing to drive the home office category, despite the move toward designing homes with more open floor plans.
Such floor plans typically don’t allow for a dedicated home office space, but producers say that doesn’t seem to have crimped sales. Instead, consumers are creatively developing spaces for multiple uses in their homes. And producers say some are even buying home office furniture with no intention of setting up a home office.
“People are finding ways to integrate office pieces throughout the home,” said Lorri Kelley, president of office and entertainment furniture resource BDI. “That’s why we’re designing pieces that are more modular in nature. We are making sure that our product offering will fit into a variety of rooms, for a variety of functions in a variety of layouts.”
She said increasing real estate costs, and the ease of conducting meetings and collaborating with co-workers without everyone being in the same room is decreasing the need for workers to go to a company office every day. Instead, she said many are choosing to work from home at least part of the time.
“We know the category is going to continue to grow just for that reason,” said Kelley. “That just makes the development and integration of these types of products even more important.”
Consumer research by Impact Consulting Services, parent company of Home Furnishings Business, showed that, among recent purchasers of home office furniture, nearly half (46.4%) use their furniture for work when they’re not in their regular office. Another 42% said they use it for home and family business, while only 11.6% said it is used for a home-based business.
Nearly 60% of those surveyed said the furniture was going in a room specifically set aside for a home office, while 42% said their office was in a room also used for other functions.
Tim Donk, director of marketing at Legends Furniture, said he believes the increasing use of rooms for an office and other functions is contributing to strong sales of his company’s writing desks. Such desks will more easily blend with almost any type of room décor, unlike the large executive desks that once dominated the category, he said.
“We do really well with our 60-inch writing desks … and the matching bookcases,” he said. “The bookcases are something that can be used virtually anywhere. They don’t even have to be in an office.”
Among consumers in the Impact Consulting survey, some 26.1% said a writing desk was their preferred style of desk, which was second only to an L-shaped desk at 27.5%.
Corner desks came in third at 15.9%, and executive desks were next at 14.5%. They were followed by desks with a hutch (8.7%), a secretary (4.4%) and roll-top desks (2.9%).
Donk said he was surprised by the strong showing from L-shaped desks, given the trend toward smaller living spaces and the reduced need to accommodate desktop computer towers and large amounts of storage space for paper files and books.
“It’s always interesting to see how furniture industry trends are driven by electronics,” he said. “We used to sell a lot of computer desks, but back then, almost everybody was using a desk top, and there were no smart phones.”
Desks with an adjustable-height feature that allows the user to stand while working wasn’t included among the survey choices, but Kelley said that style is rapidly gaining in popularity. In fact, BDI and other producers, notably resources such as Twin-Star and Turnkey, are devoting increasing amounts of time and showroom space to develop these products.
“We have been exceptionally pleased with the (sales) results from our standing desks,” Kelley said. “It will be significant part of our product development strategy going forward.”
She said the adjustable-height feature is being marketed as a health benefit, noting that many health experts now recommend that office workers stand 45 minutes to an hour in the morning and afternoon. Kelley, who uses an adjustable-height desk in her office at BDI’s headquarters in Chantilly, Va., said they also help alleviate neck and shoulder cramping that can result from long periods of sitting “hunched over a computer.”
Donk said he also has an adjustable-height desk in his office at Legends Furniture in Phoenix, but is more skeptical about the long-term prospects for the product. He believes it will continue to gain strength in commercial office settings, but may not catch on in residential use.
“There’s some novelty to it. But I think the jury is still out,” said Donk. “We decided it would not be that strong of a residential item.”
Donk and Kelley are in agreement, however, about the trends in finishes they’re seeing. Suffice it to say the lighter and grayer the better.
“The growth of gray has been remarkable to watch,” said Kelley. “It’s fun to see fashion start to come into furniture, particularly in case goods.”
Donk said the gray finishes that are most popular in the Legends line have a casual rustic feel. “Most of our better-selling writing desks are along the rustic line. The grays still have legs.” he said.
Desks have always been the centerpiece of the home office category, and the Impact Consulting survey showed that more than 59% of respondents had purchased a traditional desk or computer desk in the past two years.
The most frequently mentioned item, however, was a desk chair, which was purchased by 47.8% of respondents. Some 36.2% said they had purchased bookcases for their home office, 15.9% had purchased a file cabinet, and 10.1% had purchased a work table.
In addition, one-third of survey respondents said they spend more than 15 hours a week in their home office, while another 10.1% said they spend 10 to 15 hours. Another 30.4% said they spend five to 10 hours per week, while 26.1% spend less than 5 hours.
