14192 Fri, 04/04/2008 - 2:23pm
By Nancy Meyer
HIGH POINT, N.C.–The ready-to-assemble furniture industry is in the midst of major restructuring, as players position themselves for survival in the toughest economy in recent memory.
At this week’s High Point Market, several RTA companies will implement price increases, while others will explain to retailers their recent internal restructuring.
Even before the economic downturn, Bush Industries and Ameriwood, a division of Dorel Industries, started changing the way they go to market. Now Bush is making more changes, separating its sales functions from marketing and branding, and Sauder Woodworking is restructuring its domestic production.
The current business climate is the most difficult in recent memory, vendors told HFN.
“It’s the most challenging time I’ve ever faced in my 32 or 33 years in this business,” said Jeff Housman, vice president of Ameriwood. “It forces us to be not only smarter, but the smartest we’ve ever been. It pushes us to our intellectual limits.”
Some RTA vendors said they have absorbed as many of the skyrocketing materials and labor cost increases as they can and are now passing them along to retailers.
“We’re putting a package together to bring to market,” said Jim Sherbert, chief executive officer of Bush Industries. “Obviously, the market will be resistant to it, but there’s just no way around it.”
Earlier this year, Sauder, the largest RTA producer, raised prices on domestic and imported goods. Like other vendors, Sauder is looking for ways to keep prices low, through different designs, or looking for sources in Vietnam. But the company is downsizing domestic operations and eliminating slow-selling goods in order to maintain profitability for the long term.
“While we recognize sales are up year-to-date, most price increases haven’t already hit, so it may have a negative effect on sales,” Kevin Sauder, CEO of Sauder, told HFN. “We’re purposely downsizing a bit to make sure our business gets back to a sustainable level of profitability.”
At market, Sauder said, “We need to explain some of these changes; some of our SKU reductions will affect retailers.” Sauder said the company will work with customers to help maximize productivity of their assortments. This market, Sauder has moved its Progressive Furniture case goods unit from Plaza Suites into Sauder’s main showroom space in 220 Elm to give retailers a one-stop venue for all of its brands and divisions.
Product-wise, buyers can expect a lot of newness.
Sauder will continue its emphasis on laptop and home office solutions for the mobile student and home business owner. The company also will unveil several home entertainment pieces that address specific needs of today’s fast-changing television technologies in a wide range of popular styles, from relaxed country to sleek contemporary.
Ameriwood will show some more entertainment products, such as plasma TV mount stands; storage items like garage and multipurpose storage; and several home computing items for laptop use.
Additionally, new finishes and papers that have a “real feel” touch that resembles veneered wood will be unveiled. Ameriwood said the Kube system it previewed last fall was well received so the company will go into production on it this summer. Ameriwood has scaled back its non-core categories, such as closet storage, to focus on salable products that will drive volume for its retailers.
“We’re trying to be innovative, but innovative within the scope of the marketplace,” Housman said.
At Z-Line Designs, introductions will be made in home office furniture and seating, as well as entertainment, including the fast-growing plasma mount segment. The company’s domestic warehouse program, under the direction of Rick Lamb, vice president of merchandising, has been expanded to 12 SKUs for quick delivery to independent furniture dealers and chains.
One player is focusing on niche businesses.
Michael Rush, principal of Rush Industries, has developed a whole line of furniture designed and engineered specifically for the obese. The line, currently at 60 SKUs, includes indoor and outdoor seating and tables, as well as door mirrors twice as wide as traditional ones. The seating is tested to 1,000 pounds, and dimensions start at 32-inch-wide seats, Rush said. Desks have castors on them, for instance. Rush said it is already selling it to a major chain.
“We’re also doing very well with domestic production parsons chairs, accent chairs, boudoir chairs, benches, settees, storage ottomans, and we’re doing it for the big people,” Rush said.
Avenue Six has moved its showroom from the basement to the third floor of 220 Elm, and is sharing the space with Legare Furniture this market. Avenue Six has expanded its assortment of lobby and reception furniture, particularly blend wood and upholstery with a soft contemporary look, said Paul Reitzin, president.
Bush “uses High Point more as a regional show now,” Sherbert said. “In our product category, there’s no justification for four shows a year.” Bush has used its Las Vegas showroom for three different venues this year, and has made Las Vegas its launching pad for new products.
At Linon Home Decor Products, which also brought out new goods in Vegas, hopes for High Point are temperate. Still, Linon will bring out more than 100 new items.
“We believe in new product, in innovation,” said John Michaelides, Linon’s vice president of sales. “It’s what’s going to separate the players from the pretenders.”