Posted on January 3, 2012 by
By Jessica Goldbogen Harlan
As 2012 gets underway, players in the casual furniture industry have their eyes on the economy and the housing market in the hopes that business will improve.
"Most [in our industry] feel it will be a better year, but probably not a gangbuster year, with all the economic turmoil and challenges that the U.S. and the world is still dealing with," said Joe Logan, executive director of the International Casual Furniture Association.
Logan said that the rising cost of raw materials and transportation will be among the biggest issues affecting business.
Douglas Peppler, vice president of sales for Agio International, said he's heard that retailers have leftover inventory from the 2011 selling season, which translates into more conservative buying patterns in early 2012. But, he's hoping to make the most of the situation: "We feel that it will present a good opportunity for Agio to be able to fulfill our customer reorders." Peppler said that with retailers beginning the year cautious, manufacturers have to be ready to ship when retailers need to replenish their inventory.
Adds Rory Rehmert, vice president of sales and marketing for Pride Family Brands, "It is an election year and it is unknown what impact this may have on our business. The stock market has to show stability. Consumer confidence has to increase and be positive. And lastly, our business is driven by the weather. Bring on the sun and we will have a great season!"
Rehmert said that the company expects to see a 10 percent increase for the year--and growth could be as much as 20 percent if the weather is good.
Gloster is also hoping to see double-digit increases, but Eric Parsons, president, said that everything depends on what's happening in the world economy in the all-important selling months of April and May. "If things are looking better in April and May, then our business will do well," he said. "If it's a lot of bad news, that's going to have an impact on consumer buying."
Meanwhile, Kingsley-Bate is more optimistic than many in the industry. "Based on early indicators, 2012 is on track to be our best year yet," said Brian Blakeney, director of sales and marketing. "Certainly things can change--the political, social and economic climate both internationally and domestically are in a state of tremendous flux--but we are optimistic about the future in our core markets."
Most manufacturers are aiming to combat sluggish business with interesting new collections and accessories.
At Leader's Casual Furniture, the company will be focusing on fun, bright fabrics, including dragonfly and butterfly prints that incorporate bold color. Tami Newton, commercial sales director of Leader's, said that she believes that items with a higher perceived value -i.e., getting more for less--and exceptional customer service are two selling points that she thinks will be crucial to getting consumers' business in 2012.
At Agio, Peppler predicts that porcelain tabletops will be a hot trend this coming season. "There are some beautiful designs and fantastic looks right now that our retailers are purchasing," he said. But, like Newton, he said that one of the most essential selling points will be value.
Other manufacturers concentrated on accessories and new product categories, such as Pride Family Brands, which introduced a line of fire pits to complement its collections.
Many insiders report that bigger is better when it comes to outdoor furniture. "Oversized dining sets will continue to outpace traditional five-piece dining sets," said Rehmert. "The new norm for dining is at least an 84-inch table and six or eight chairs."
And motion is becoming more important, too. "We're putting motion in every one of our ranges," reported Parsons of Gloster. "We have deep seating swivel lounge chairs in our teak dining collections, for instance," a new feature.
But one bright spot is that the industry's retail channels are shifting, often resulting in new players and increased opportunities. "It's a category that holds a lot of interest for retailers," said Logan. "We're now seeing a lot of interest from retailers that may have previously been strictly on the indoor side of the business and are now exploring selling outdoor furnishings, and Internet and catalog activity continues to be important for our industry's manufacturers. The number-one message is that there's much more interest in our category."
Rehmert of Pride Family Brands agrees. "We are growing our customer base and are not seeing much erosion within our current customers."
Meanwhile, Parsons of Gloster said that although the traditional casual furniture retail channel is shrinking, the industry is seeing growth in big-box stores like Home Depot, Lowe's and Costco. "Those guys are gaining some speed because people are looking for value," he said.