November 27, 2012,
By Jessica Goldbogen Harlan
Good weather and plenty of opportunity for retail growth were two of the factors that contributed to making 2012 a good year for outdoor furniture.
"Overall, 2012 has been a good year for the industry," said Joseph P. Logan, executive director of the International Casual Furnishings Association. "Many companies have experienced significant gains in sales for the year."
He said that good weather in the spring helped spur sales. "Our industry is very impacted by weather. When we have beautiful weekends, it really boosts sales and consumer interest in getting out and purchasing outdoor furnishings," said Logan.
Added Bob Gaylord, president of Agio-USA, "Retail sales in early spring were as good as I've seen them in the past 25 years," he said. However, because retailers bought conservatively going into the start of the year, they quickly sold through their stock, forcing manufacturers to scramble to manufacture and deliver reorders. "Agio's factories had to work hard to fill the reorders and get them shipped out to retailers to meet the second half of their season."
Stephen Elton, chief brand officer for Brown Jordan, said that his company's sales results will be up this year. "We're always wanting to do more, but we're pleased with how our year has been, especially at the beginning of the year."
He credits his company's success to some outreach the company has done to address a younger consumer with new designs and a bigger price range. The company also has introduced a few new product developments that fared well this year. In the Flex collection, stretchy straps function as a seating surface that eliminates the need for separate cushions. In another collection, Elements, a special treatment during extrusion gives the synthetic resin a matte finish that was inspired by molting crape myrtle trees.
At Barlow Tyrie, a new dealer program with better discounts, an increase in contract business, and the expansion of the company's aluminum range helped spur sales that were "better than expected," according to Charles Hessler, executive vice president.
Telescope Casual Furniture, too, was strategic in 2012 about its business solutions, and it paid off. Greta Cosey, media and merchandising manager pronounced it a "great" year. "We took our research and development to a whole new level this past year," she said. "We've found that the shopper's mindset has changed dramatically. Each year their ideas of value change and they constantly want more for their money--which is completely understandable. So, in designing products for 2012 we made sure that every introduction had the right value equation that the ultimate consumer could see the moment they saw and sat in the furniture."
Business was "strong overall" for Palm Springs Rattan and Garden Classics, according to Tami Newton, who oversees sales and marketing for the company. She credits the success to a focus on the core business and plenty of new and updated product. Palm Springs Rattan came out with at least seven new collections, changed up the fabric selections for four collections in the quick ship program, expanded the offerings in two collection, and launched a new customized cushion program called "Perfect Fit."
Perhaps one of the biggest bellwethers of a good year is that even companies new to the market reported success.
Z-Line Designs marked its first full year in the casual furniture industry, and Mark Gorr, senior vice president of the casual division, said the company is happy with its debut. "We were extremely happy with the distribution we were able to pick up in a very short period of time," said Gorr. "We spent a lot of money upfront [with advertising], letting the industry know that Z-line was coming."
Z-Line focused on what Gorr said was "low-bearing fruit" for its distribution, targeting specialty stores and traditional furniture stores. The latter continues to be channel of growth for the casual industry. "When you look at the decline in the casual furniture industry and the loss of many dealers because of financial troubles, one area that was very positive was the interest and desire for furniture stores to get back into the casual furniture category," he noted. "That's where the largest growth potential is now and in the immediate future."
Gaylord agreed. "Agio has long held the belief that traditional furniture retailers should be in this category and will succeed if they merchandise and market outdoor correctly." He noted that the majority of top 100 furniture retailers who are now in the category are not only successful, but increasing their outdoor offerings each year. Agio, which showed for the first time at High Point Market in 2012, has since expanded its presence at this traditional furniture market because of the response from furniture retailers looking to get into the casual category.
But there were a few factors that dampened the possibility for an even better year. For instance, even though warm weather in the early spring got the year off to a good start, Logan said that a hot summer in many parts of the country caused business to slow down.
"The season was somewhat of a roller coaster in that it started very early due to some great weather but slowed down right after Memorial Day and then was stable throughout the summer," said Rory Rehmert, vice president of sales and marketing, Pride Family Brands.
Elton added that fuel prices continue to be a challenge for the industry. "We're based out of California and the bulk of our business is in the Northeast," he said. "Fuel and oil prices are up and down and changing all the time. We've been challenged by freight--everyone would say that."
Although OW Lee did not experience difficulties in availability or shipping of raw materials, as the company had in the past, Terri Lee Rogers, president of OW Lee, said that fuel surcharges from domestic carriers were difficult to manage. The company continues to take more and more manufacturing processes in-house so that the company can control the quality and lead time.
And Newton of Palm Springs Rattan reported volatility in the fabric market. "I think a lot of the fabric mills are pulling their production back into the United States instead of outsourcing containers from countries like Turkey or Italy," said Newton. "We were caught off guard on fabric drops more than anything."
Ultimately, even the most favorable business conditions aren't as important to a company as having the right product offerings. Industry players reported that conversational pieces, deep seating and fire pits were among the hottest areas in casual furniture. Gorr of Z-Line said that sectionals were a big growth area that he saw, particularly pieces that had a crescent front.
Kinglsey Bate, a company best known for its teak furniture, actually saw one of the main business drivers this year as being several new outdoor wicker collections that it launched. "We focused on introducing wicker products that would not only sell well on their own, but that would also look good when mixed with teak," said Clay Kingsley, president. One particular hit was the Sag Harbor wicker collection, which includes oversized pieces, such as big curvy armchairs that can be used with a teak dining table.
At Barlow Tyrie, the company's most successful product lines included a new woven range designed by Laura Kirar, the stainless steel Equinox collection, and Aura, a powder-coated, tubular aluminum line. "We even saw an uptick in our traditional teak products," said Hessler.
"Outdoor fire is something that remains high on the consumer's wish list," noted Gaylord. "Consumers are seeing that outdoor gas fire pits allow for entertaining outdoors into the evening and longer into the season."
Pride Family Brands also saw "tremendous success" in fire pits. Said Rehmert, "We saw a high level of growth in this category and for 2013 we expanded the program three-fold with the addition of a remarkable number of custom options."
Finally, motion furniture continues to be popular; Rogers reported that two of its most popular pieces were the Monterra Club Spring Chair and Swivel Club. "They are large and plush and are as comfortable as any recliner you would find indoors," she said.