Counting on Casual
By Jessica Goldbogen Harlan
With President Barack Obama in the White House for another four years, and the economy a little more stable, members of the casual furniture industry are looking forward to a relatively strong year of business in 2013.
A continuation of new distribution channels, coupled with lots of innovative new products, will ensure a strong year, said Joe Logan, executive director of the International Casual Furnishings Association.
"At the Casual Market in Chicago in September we saw an incredibly strong lineup of new product introductions, which is always a good indicator of the industry's future outlook," said Logan. "I know this will excite consumers and really help the industry to have a great year in 2013."
At Agio-USA, Bob Gaylord, president, has high hopes for the coming year. He said that company sales have grown annually since 2008, and with sales for 2013 already mostly written, they represent the largest percentage increase in that time. "We are seeing sizeable increases in our furniture business and mass business," said Gaylord. "We're seeing a new dealer base coming into outdoor for the first time."
Additionally, current customers are increasing their outdoor footprint. Gaylord pointed out that the outdoor category is one of the few home categories that's increased over the past six years, citing a Mann, Armistead and Epperson report that estimated a 46 percent growth rate in that time. "I really believe we've only scratched the surface," he said.
At Brown Jordan, which won numerous industry design awards over the past year with its designs, Stephen Elton, chief brand officer, Brown Jordan, said he's optimistic about the year, especially with new retail placements and plans for new marketing projects. "We closed 2012 out strong, and we're looking forward to 2013 being an even better year," he said.
This year will be Z-Line Designs' second year in the casual furniture industry, and Mark Gorr, senior vice president of the casual division, predicts it will be a growth year. "Will we have double-digit growth? I don't think so," he said. "But people will go into the selling season with at least a modest optimism. I think we'll see some growth early on. There is so much pent-up demand right now, and that's going to be one of the positive factors."
Charles Hessler, executive vice president of Barlow Tyrie, is "cautiously optimistic," about 2013. He thinks the contract market will continue to rebound, and he says that retailers, too, should experience better sales due to some of the company's new product lines. The company recently introduced its first motion piece, a swivel rocker within a range of teak deep seating, which was well received by buyers. The company also added a new range of shade products, including market umbrellas and a sun shade that opens and closes with a butterfly effect.
Indeed, motion pieces are predicted to continue to be strong sellers, as are conversation pieces, multifunctional pieces and fire-oriented accessories.
The product development strategy at Z-Line Designs was to add motion into all of its current collections, and to incorporate it into all new collections being developed. "We are also adding functionality to our tabletop program, such as occasional tables with drawer or door storage, or pop-out shelves," said Gorr. "The consumer can interact with our product."
At Brown Jordan, Elton said that chaises are not the key item they used to be, since fewer people "lay out" by the side of the pool," but lounging and entertaining pieces, particularly those that have an indoor look with outdoor properties and durability, are sure to sell.
A wide range of fire pit sizes and designs will be in focus at OW Lee in 2013, as will certain specialty pieces, such as a nostalgic porch swing with a canopy and deep cushions.
Industry players pointed out that while they don't have control over factors that can affect business, such as the weather and the economy, they're hoping that being prepared for anything will help weather any storm.
There are always independent variables, agrees Elton, "We don't have control over them but we'll try to circumvent them from a marketing standpoint." Brown Jordan has a national sales event planned in February that will be supported with advertising, and thinks that it'll kick off the year in the right way. "If things are going great, we'll be home free, but if things are a bit of a struggle we'll attack it head on," he said. He pointed out that the economy has been unsteady since about 2008, so Brown Jordan and other savvy companies are constantly examining ways to reinvent themselves to circumvent the economy-related issues as they arise.
Gorr of Z-Line Designs said that a major variable is how the government plans to deal with tax breaks that are expiring this year. "This is going to have an impact on job growth. If the job growth isn't there, you might see the unemployment rate going up again," he pointed out. "But I think right now everyone has a positive outlook for 2013 and enough confidence in our government officials to do the right thing for the country."
Manufacturers said that there is still a lot of distribution shift amongst retailers, as traditional furniture stores enter the casual furniture category, and online and catalog retailers become a bigger part of the pie.
Tami Newton, sales and marketing at Palm Springs Rattan and Garden Classics, believes that in the coming year, there will be an emphasis for brick and mortar retailers to drive more business through the web. "We at Palm Springs Rattan recognize the importance of the web, both as an avenue to provide information about the product itself, how it is made and how to maintain it, but also as a way to increase sales," she said. "Manufacturers and retailers need to have a unified force to capitalize the most revenue from the web. This is one area of growth where we can all benefit from embracing and understanding."