Daily News Archive
Brought to you by Home Furnishings Business
April 30,
2008 by in UnCategorized 
By Home Furnishings Business in on May 2008
It’s been a full mail bag with many comments we loved and others that made us sheepishly drop our heads. All the same, it seems as if our bonus issue in February that took a detailed look at the consumer struck a nerve with many of you out there.
In our continued effort to share the good and the bad with you from our collection of letters, here’s what we’ve got for you this month. Boots, the boot salesman in Texas from our March issue, garnered good and bad reviews—a fair and balanced view. Sally, our February 22, issue sparked a good bit of comment.
Read on for more from our readers.
Hey Amy,
Let me make sure I have this right.
You were happy that you were left alone and not bothered while shopping the furniture store after the October market, but you did not buy anything.
You were also happy that someone did wait on you when you were in Dallas shopping for boots; and you did buy something.
Sounds like you consider furniture sales consultants pests and boot salespeople saints.
Next time you are in Birmingham I have a friend with a great shoe store that would love to meet you.
Stuart Shevin
Standard Furniture
Birmingham, Ala.
I loved your story about Bones.
For the furniture industry, we chased Bones out years ago and replaced him with Mr. Price and Mr. I Have No Passion and Mr. I Only Want to Make Fast Money and Mr. I Do Not Want to Give Back Anything to this Industry.
I am Bones as a sales representative. I believe in North American manufacturing; I believe in fashion; I believe in quality; I believe in value; and I believe in impeccable service. And, I believe that this is what it will take to get you to buy that new bedroom set. We need to bring more Bones back into this wonderful industry.
Regards to you, and I’ll keep reading your articles.
Jim McCudden
I once asked our ad agency since consumers call it a couch, why don’t we? They looked at me like I had three eyeballs.
My other favorite is frame and cover. This is used not only in stores, but on manufacturers’ Web sites, too. Wouldn’t we connect better with Mrs. Jones if we said style and fabric?
Mike Vogt
Homestead Furniture Inc.
Nescopeck, Pa.
What can I say? WOW! Probably the most easy-to-read and informative issue I’ve read about consumer purchasing behavior in the seven-plus years I’ve been in this industry.
CONGRATS!
Now, if only the manufacturers and retailers will read it, use it and benefit from it instead of running NO PAYMENTS UNTIL YOU’RE DEAD!
Bill Napier
Napier Marketing Group Inc.
I just wanted to take a minute and share with you my thoughts on your magazine.
We are a recreational products retailer with 14 locations throughout the Midwest. Our product lines include patio furniture, home theater seating, barstools, bars, game tables, spas, pools, pool tables, outdoor kitchens, fireplaces and more. Most of our stores are around 50,000 square feet.
Having been in this industry for many years it is truly a joy to pick up a trade magazine and actually enjoy reading it. Your publication is extremely well-written. Each issue has useful, real life information, which the retailer can directly apply to their business.
Keep up the great work!
Erik Mueller
Watson’s of Cincinnati
Cinncinnati
April 30,
2008 by in UnCategorized
By Home Furnishings Business in Markets on May 2008
At Furniture Brands International, the name Ralph Scozzafava has come to mean change. During an interview at the company’s Broyhill showroom during the High Point Market, the former Wrigley executive spoke frankly about the need to cut costs and boost efficiency by changing the long-standing practice of operating FBI as a set of separate companies with overlapping technology systems and products.
Formerly vice president of worldwide operations for Wrigley, the world’s No. 1 gum company, Scozzafava was named named vice chairman and CEO in June 2007 and has served a 10-month apprenticeship in the furniture industry with long-time CEO Mickey Holliman, who relinquished the top spot in May. In a wide-ranging interview, Scozzafava, who joined FBI after 27 years in the food industry, said the one area where furniture lags behind other consumer goods categories is in employing consumer research to guide product development and all phases of marketing. With a new team in place that includes Chief Marketing Officer Alex Hodges (formerly of Russell Athletic) and newly promoted Vice President of Strategy Dan Stone, Scozzafava says the pieces are now in place to reduce redundancies in corporate function—as well as in products—in FBI’s various operating companies. When it comes to the product side of the puzzle, Scozzafava said consumer research will play a key role in helping brands like Broyhill and Lane take on a new level of importance for both consumers and retailers.
Since the interview took place weeks ahead of the company’s annual shareholder meeting on May 1, Scozzafava was unable to address Sun Capital’s bid to place up to three members on FBI’s board of directors, but said critics will eventually be quieted by his team’s continued progress in meeting goals in the company’s transformation plan. The comments of Scozzafava—who was joined by Hodges and Stone during the interview—were edited for the sake of clarity and available space.
What’s the main lesson the furniture industry can learn from other fields you’ve worked in?
Scozzafava: On the consumer side, the people who are actually buying and using your products are going to tell you more about what they want than anybody else. When you ask them directly, you’re going to get really, really good information. I don’t think we do a lot of that now as a company. That’s probably the biggest thing for me.
The other is as I look at it, we all in this industry tend to do some of the same kinds of things. To say it politely, when I look at products, a lot of them look kind of like something that somebody else just did. That happens in lots of businesses, by the way, but it just seems to occur a lot in furniture. Another company will literally take this conference table (we’re sitting at) and adapt it, interpret it.
It’s obvious FBI is moving from being a collection of operating companies to a more integrated, single entity. How integrated will it become and how fast will that happen?
Scozzafava: We are moving from kind of a holding company structure to a collection of companies with shared back-office operations. What I don’t want to lose is that our brands are the focal point of what we do. Our commercial functions—such as sales and marketing—are something the brands still drive. We’re just going to take the things that are repetitive and leverage them, so HR should be the same across all of our brands, and IT, financing, accounting and certain supply chain procurement functions will all be the same. But, there will still be a focus on the P&Ls of the brands individually. We don’t ever want the brands to be all the same. Having Drexel Heritage becoming just like Thomasville is not the idea at all. They’re each separate and distinct, and each is targeted to a different group of consumers. But, there are things we can be share. When we run payroll, it shouldn’t be run in 10 different places. We should run it once and pay everybody on the same day, and we’ll get a lot of savings by doing it that way.
Dan Stone: The things that are invisible to the customers will be shared, and payroll is a good example of that, and so are questions like how many data centers will we have? Or, how will we deploy a wide area network? We can drives lots of savings that way. We’re completing the design phase of this (back-office integration), and we’re not talking about a completion date yet, but it won’t take years. In the consumer-facing side of things, we want a distinct positioning of our brands. What’s the right consumer appeal? What’s the segmentation? How do we go to market. All of those kinds of pieces are the visible piece that must have more distinctiveness. One of the things we want to move away from, as we talked about earlier, is product that looks similar.
There will certainly be naysayers who will ask, ‘Why hasn’t payroll been something FBI managed centrally all along?’
Dan Stone: The heritage of Furniture Brands comes from Interco, which was always run as a holding company. With that approach, you want to minimize central staff. ... Each company was a stand-alone business that was run entrepreneurially. The fear was that if you combined any part of it, you would homogenize those operating companies. Over the past three years or so, we started talking more about shared services and doing things differently. Now, we’re staffed in the right way and with the right people in the central organization to start pushing on it in a way that is making it real. We recognized the issue before that there was opportunity (in shared services), but we didn’t know how to do it and we weren’t willing to go beyond a certain point with what are really entrepreneurial standalone businesses.
To what extent is the goal of reducing operating costs driving the move to shared services across all of these brands?
Scozzafava: It’s really two issues. We want to share best practices across the company. At the same time, we want to take things that are being done in disparate places and become more efficient and automate where we can. So, it’s a little bit of both. If the issue is disaster recovery, for example, it you have 10 (business units) taking care of that separately, some will do it really well and others are going to do it poorly. All 10 units are going to pay more because they’re doing it separately. We can do it once, and everybody does it the right way and saves money at the same time. ... With the kind of scale we have, we can afford to pay for the research and expertise to get it done right in a way that little companies either don’t have the time for or can’t afford.
Increasingly, we’re hearing furniture retailers talk about “the store as the brand,” which is reflected in how much private-label or no-name imports they’re selling. So, what does a brand name like Broyhill or Lane mean anymore?
Alex Hodges: In the surveys we’ve done recently on both aided and unaided awareness. Broyhill is No. 1 and Lane is No. 3, so we have two of the Top 3 brand names. We have brands that have great heritage, and they’re very relevant today. At the same time, we’re ready to invest to make them even more relevant in the future and make them even more important in terms of what’s driving the consumer’s purchase decision. It’s not just the brand in relation to product, either: It’s the total experience and all of the touch points she has with that brand, including everything from how she researches the product potentially online, the store she goes to and the type of service she gets. Obviously, the style has to be right, feel right and work in her home. It goes all the way into the delivery into her home. We’ve got to extend the power of these brands to all of these all the different touch points.
When it comes to making the brand more relevant, is that primarily a challenge in winning over retailers or consumers?
Alex Hodges: We have to do both. First and foremost it starts with the consumer. Because we are doing a better job of creating a better product based on that consumer need, we then go to our retailer customer and say, ‘She’s going to be looking for this Broyhill or Lane piece of furniture in your store. We’re also going to advertise and communicate that directly to her in her home in one fashion or another, so she’s going to come looking and asking for that product. That’s why you (the retailer) need to carry it.’ It starts with the consumer, but, absolutely, there’s a combination of addressing our retail partners and marketing to them as well.
Dan Stone: In the current system, the dealer tells eight manufacturers, ‘I need 70-inch camel hair sofas for the next market,’ so all of those manufacturers scurry off to make those, but then what’s any manufacturers’ point of differentiation with everybody else? If we instead start with the consumer understanding by doing the research on what is going to sell, you’re able to show the dealer how it works, and that changes the relationship around.
Scozzafava: I think the power of two brands is incredibly strong if both brands are strong. So, if a Nebraska Furniture Mart combines to sell Broyhill, man, that’s powerful. I think we can help the (smaller) furniture retailer, too, because we can bring that into his or her store. It’s powerful for them to have good merchandise that consumers understand, and that’s pre-sold before she gets there. When you go into a Best Buy and buy a Sony TV, you know you’ve done a pretty good job for yourself. If you go into another store, like Ralph’s Electronics, and buy a Sony, it’s still a good purchase, right? But, if you went into Best Buy and bought an off-brand, you may not feel as good about it.
What type of consumer research will you be doing?
Hodges: It’s a combination of things. We’re kicking off some qualitative focus groups next week (in mid-April), but it’s really just the starting point to make sure we understand how the consumer talks about our category and the language she uses. It’s just one input into a very in-depth set of quantitative research studies. The end result will be to segment the market and segment consumers within the market. ... There may, for example, be the furniture shopper who is obviously concerned about both brand and value, and they may represent 12 percent of the market and 20 percent of all the dollars that are spent. There’s another group of customers who are furniture enthusiasts who are all about high-end designer brands. So, you segment the market and quantify the size of each of the groups as well as FBI’s opportunity to reach those segments with the brands we have in our portfolio. We will try to do a better job of not having as many of the overlaps that exist today.
As the transformation plan progresses in the year ahead, what signs can we look for to know whether FBI is succeeding in its goals?
Scozzafava: I think we’ve already seen the first sign. Our balance sheet is as strong as it’s ever been, and that’s good because we’re in a challenging economy. The second thing is you’re going to start to see products that, hopefully, you’ll identify as pretty neat and innovative. Our brands have spent a lot of time developing and designing, and it will get better as we do more consumer work. You’re going (to see progress) by looking at our profit numbers and our performance in the marketplace. We have a plan we think is a good one. We have a good team. We have a lot of folks who have spent a lot of time in this industry. We also have some who are pretty new, and I’m one of them. What I tell our guys is ‘We don’t need a lot of me.’ Watch our results. What we’re trying to do now is just really manage a large company and do it in such a way that we feel like a small company. If we can do that and energize our people along the way, we’re going to be OK. But, I think the first part is in good shape. We said what we’d do with the balance sheet and we did it, so we’re just going to continue to promise and deliver, promise and deliver. Our (initial) promise was to reduce debt and produce cash. We did that, and there will be more to come. We’re going to get better. The work that Mickey (Holliman) started more than a year ago and that I’m engaged in now has, I think, put us in a good place. I don’t see any gaps.
We all know that Sun Capital is working to seat members on your board. Will a change in the board change the strategy you’ve described?
Scozzafava: The board is a big part of any company. I always think the board is at the very top overseeing management and validating strategy. Boards do what they have to do. I sit on our board, and I see how decisions get made. All we want to do is make sure the best decision for all shareholders is the decision that gets made. I can’t predict the future. I know we have one hell of a strategy, though.
You came to furniture from Wrigley, the world’s largest gum maker. Are there elements from that industry you can apply in the transformation of Furniture Brands International?
Scozzafava: Some of the things that are different and are better is that during a major industry conference, it tended to be that you only had time to meet with the big guys—the Top 10 or so that accounted for 70 percent of your business. So, that was the only input you got. Here you meet with everybody. You get ideas from guys with one store and guys with 10 stores, and I always think the more information you get, the better off you are and the smarter you’re going to get. I come here, and I listen to everybody. I’m still learning like crazy. I spent 27 years in the food business, and I was learning every day at that. I come here to High Point, and I’m learning like 10 times as much every day. You just try to learn and understand and listen to everybody.
I’ve just met so many high-quality, high-integrity smart people in the furniture industry. Then, of course, I had Micky Holliman, who has taken me under his wing. What would be better than to have Mickey Holliman teach you the business? If the UNC grad school offered a course taught by Holliman, I’d sign up no matter what it cost. It’s been just a great introduction to the business.
Hodges: The real commonality between furniture and other industries is that we’re going to win in the same way which is by knowing the consumer better than anybody else. So that’s what we want to bring to the home furnishings industry. We want to know why she buys and where she buys and by doing the best job of marketing to her needs, that’s how we’re going to make the difference. That’s the discipline that comes from Ralph’s prior companies as well as the companies Dan (Stone) and I worked for. What we’re going to do with the learnings and experiences from those industries. Like furniture, the products we dealt with before are similar in many ways (to those of competitors). We are focused on finding out how to bring (our furniture) to market in ways that meet the consumer’s needs better than anybody else.
April 30,
2008 by in UnCategorized
By Home Furnishings Business in High Point on May 2008
Picture yourself in a furniture showroom, but take out the crowds of buyers, the harried sales reps and the fear you’ll be late to your next appointment.
That’s the situation you’ll find yourself in at a single-vendor event that generally last only two or three days. Vendors have been inviting top buyers to special events in High Point, Las Vegas and resort locales for decades, but, in recent years, manufacturers have been attracting large numbers of furniture store owners and buyers in less familiar locations such as Tacoma, Wash., or Tigard, Ore.
“They offer some tremendous deals to entice you to come,” said Gordy Wallenstein, president of the 28-store Furniture Outlets USA, who has visited High Point in January three years running for the Lifestyle Enterprise event that attracts 700 to 800 buyers. “Also, you can get a jump on products that everyone else hasn’t seen yet. We also have an opportunity to visit some (High Point) showrooms we normally wouldn’t plus some (vendors) we are buying from.”
Wallenstein and other retailers say they aren’t, necessarily, looking for new additions to their market calendars, but many see appeal in events that offer bargains, fun social events and a chance to strengthen bonds with a trusted vendor.
Staying In High Point
James Riddle, Managing Director of Lifestyle Enterprise, said the Forbidden City Furniture Show was launched when the company opted not to join the thousands of furniture companies that set up showrooms in Las Vegas. The company pays the travel expenses of buyers and also hosts a dinner with entertainment and gives away two sports cars costing as much as $50,000 each.
“We felt we could host a show in January, and it wouldn’t cost us as much as Las Vegas,” he said. “Needless to say, it cost more, but we feel it’s been highly successful for us,” he said, adding that original projections didn’t factor in bringing in so many retailers or giving away cars.
In Portland, Ore., MasterCraft Furniture now hosts twice-yearly events instead of showing in Las Vegas and San Francisco, where it once had showrooms. Owner Marty Olson said the Open House works better for the upholstery producer that is focused on about a dozen Western states. He said a nearby competitor, Madison Furniture, holds its own event at the same time, and some customers visit both factories.
Discounts, Not Airline Tickets Bring Buyers
Taking a no-frills approach, MasterCraft uses special discounts to attract retailers and doesn’t pay for their travel expenses. He said about 40 dealers come to a typical two-day event, which often includes a dinner cruise on the nearby Willamette River. “It’s very effective with a captive audience and very targeted to the customer we’re focusing on. At the show in April, were were offering a sofa-love seat combination for three sets for $1,000 and we were selling a $299 sofa at $199. It’s definitely a recognizable value, and it brings people in for us to show our new lines.”
Discounts are also a focus at Lifestyle. A year ago, company Chairman William Hsieh told HFB the company has spent millions of dollars on its January event, with incentives such as free floor samples costing far more than the car giveaways or the airfare and hotel expenses the company picks up for customers. What the show delivers for Lifestyle is new buyers and increased attention from West Coast retailers, Riddle said recently. “We had several Top 100 accounts in this past January that had not (ever) been in attendance in the past. ... We had a number of people who came to our January show who do not attend market in April or October, and we even had an eight-person buying team from the largest retailer in South Africa.”
Al Lyons of Lyons Furniture, Mount Vernon, Wash., said substantial discounts attracted him to the 2007 event. “They had great pricing up front, but the second container was another 25 percent off, which basically paid for all the freight charges,” he said. “Another advantage as that there a number of other (vendors) who open during that time in High Point, so you have ample time and opportunity to visit a couple of others while you’re at it.”
Lyons said the less-hurried pace of visiting Lifestyle’s showroom in January—versus April or October—also was appealing. “You can focus on that one vendor and what’s available. At Market, there are a lot of distractions.”
Golf In Combination With Sales Increases
On a smaller scale, Emerald Home Furnishings brings about 120 dealers to its Tacoma,Wash., headquarters and showroom each April and October for a two-day event that’s heavily focused on networking and fun events such as a dinner cruise in nearby Seattle, but also offers time to preview new furniture introductions and take advantage of deep discounts on a few items. The event President David Beckmann calls “Open House” is a tradition that dates back to 1988, but has grown since 2002. “It has evolved into an (event) where we can spend a little extra time with each other, and the relationships that evolve from that transcend what can be accomplished during a typical (market) or by sitting across from the buyer at a desk in a store.”
Marty Cramer of Cramer’s Home Furnishings, a five-store chain in Ellensburg, Wash., is a regular attendee, and said the social aspect is one of the major reasons he attends twice a year, especially for the spring event’s golf tournament. products they’ve only seen in the catalog. ... Every time we take a manager, the sales from the Emerald catalog in that store increase. ... For items we don’t carry, the manager can tell the customer, ‘I saw this, and I think it’s gorgeous,’ so we definitely see an increase in special orders.”
Beckmann said he once began scaling back the Open House, but quickly reversed course and expanded the event because the retailer response was so strong. Emerald added more entertainment offerings and began donating part of the proceeds to local charities. He said dealers like to attend “simply to spend time with their counterparts from other areas, sharing experiences and frustrations and taking the temperature of other dealers’ businesses.” Cramer regularly attends similar events by manufacturers like those sponsored in the Portland, Ore., by MasterCraft, Madison and Furniture Factor, which no longer have showrooms at major markets. “All three companies have an event during the same three days in March, so we’re able to go down and see everything at once,” he said.
Time Versus Money
Cramer said other manufacturers have offered to fly him to California and other areas for factory tours or events, but he almost always declines. “If it’s not a company I’m doing a significant amount of business with, I just don’t have the time.”
Asked if a retailer is more likely to fly to an event if the vendor is paying travel expenses, Wallenstein said, “Probably. The biggest decision is to commit the time, but it makes (my decision easier” when the vendor pays, he said.
Jim Hanley of National Furniture in Spokane, Wash., jokes that when Emerald pays for his trip across the state for an Open House, “they get it back ten times over from what we buy.”
Greg Follett of Follett’s Furniture, Lewiston, Idaho, said, “It definitely helps when they want to foot the bill,” but added he’s most interested in the chance to meet up with fellow retailers. “I live and breathe furniture, but in the same place. It’s nice to change locale sometimes and talk to other retailers.”
The Retail Angle
Major retail networks like La-Z-Boy, Badcock and Bassett Direct also hold their own shows or conferences that combine educational opportunities with social events and, in the case of Badcock, a large exhibition area featuring major vendors.
At the La-Z-Boy Furniture Galleries Conference, virtually all of its 100 dealers attended the most recent national conference in Las Vegas two years ago. The manufacturer and retailer holds the event every two years, but has held annual regional meeting since 2005. At the events, La-Z-Boy executives discuss new retail initiatives, and dealers are able to share successful strategies with one another, according to a spokesman.
Badcock, which has a network of 330 stores, expects 600 to 700 dealers at its upcoming annual event August 22 in Richmond, Va. In addition to Badcock executives providing business updates, there are workshops on topics such as product warrenties. In addition, more than 125 manufacturers supplying Badcock stores will have displays at the three-day event.
Getting Salespeople Involved
Over the past couple of years, Follett has attended events sponsored by companies such as Englander, Lane and Simmons. The Simmons event included a tour of the company’s new factory in Sumter, Wash. “It was so informative that we got them to agree to foot the bill for us to also send some of our salespeople” later. “I think when (store sales associates) are more involved in seeing things like how the mattresses are made, they feel closer to the business, so it was a big help to us in that sense,” Follett said. “We definitely strengthened our ties to Simmons by going to the events we did, and I think it’s helped us have a better relationship” since the events.
Woody Whichard of Midtown Furniture Superstore in Madison, N.C., said the January Lifestyle show in High Point offers the chance to see new collections before competitors see the new furniture in April. “We’re able to have the product on our floor before some of our competition and sometimes even before they purchase it. We can beat them to the punch.”
Madison Furniture started inviting a small group of customers to its Tigard, Ore., factory last year after pulling out of major markets like Las Vegas to focus on direct sales through its network of sales reps in the region. Owner Bob Cohns said that as a regional upholstery supplier the event can be a success if 15 retailers show up. The one downside, he said, is that customers can’t walk across the hall to another vendor when their rep is busy. “It’s good and bad in that way because there’s no place else (a buyer) can go.”
December 2,
2007 by in UnCategorized
By Home Furnishings Business in Casual Furniture on December 2007
National Geographic, Washington, has teamed up with New Creative, Milford, Ohio, to develop a line of outdoor living furnishings that include accent furniture, fountains, décor accessories and birding products.
The collection , which debuted earlier this month in retail stores, builds on National Geographic Home Collection products that include collections by Lane Home Furnishings, a licensee since 2003, as well as framed art, lighting and rugs.
“Our goal was to create a line of products that is both aesthetically pleasing and authentic,” said Krista Newberry, vice president of licensing, home furnishings, National Geographic. “Collaborating with experts, including our own National Geographic ornithologist George Watson, ensures that the products make a positive contribution to wildlife while bringing the mystery and wonder of nature to people of all ages.”
According to an announcement last week, the New Creative products are available in most Wild Bird Unlimited stores and on Amazon.com .
December 2,
2007 by in UnCategorized
By Home Furnishings Business in Bedding on December 2007
International Bedding, the industry’s eighth largest manufacturer, announced Friday that it has hired Mesirow Financial Consulting to assist management and the board of directors in developing the company’s strategic direction.
Mesirow is a full-service financial advisory consulting provider with a wide range of services that include corporate recovery, interim management, valuation services and performance improvement.
A day prior to announcing the hiring of Mesirow, Fort Lauderdale-based International Bedding said it had added three members to its board of directors, including Thomas Allison, senior managing director of Mesirow Financial Interim Management, who was elected chairman of International Bedding’s board.
Other new additions to the company’s board include Robert Lackey, the former general counsel of Comdisco Holding Company, and Jeffery Maillet, founder of Nobel Asset Management. The two board members are also investors in the company, according to an announcement.
International Bedding CEO Tony Smith said of the board appointments, “This is a very positive event for the over 500 International Bedding employees, our retail partners and our suppliers who all have been very supportive during the past several months. The senior management team and I are pleased to have the opportunity to work with such an outstanding board of directors.”