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Hearth & Home January 2014

Bacon’s Furniture & Design.

Tale of the Ticket

By Tom Lassiter

Once furniture stores learn how to sell patio furniture, a quick glance at the average outdoor ticket will solidify its spot on the floor.

Joe Kendall knew that the addition of casual furniture four years ago to his full-line furniture store in Ocean City, Maryland had been a good idea. He and his staff at Kendall Home Furnishings quickly came to appreciate the benefits of having a fun product line in his main store and a second, smaller shop in Selbyville, Delaware.

“I like the business,” he said. “It’s a much more enjoyable shopping experience” for customers and staff.

It took a while for everyone to understand the new category’s inherent quality and accompanying price points, Kendall says. “But once you get over the hump and see that it actually has value,” he explained,“it’s an easier sell. The stuff gets better and better and newer and cooler every year.”

Kendall Home Furnishings carries products by Ebel, Lloyd Flanders, Telescope, Tropitone and Breezesta. Casual furniture accounted for about 18 percent of the company’s sales in 2013.

What Kendall didn’t appreciate until recently was the spike that casual sales add to his average sales ticket. He’d simply never run the numbers until Hearth & Home inquired.

“Average ticket? I should know, but don’t.” Kendall turned to his computer and had the answer in seconds.

“Our average ticket is $1,800,” he said. “That’s for all products, indoor and outdoor.”

And what’s the average ticket for a casual sale? Kendall put the question to his computer, and the spreadsheet instantly spit back the answer. The phone went silent.

“That’s amazing,” Kendall said, after a lengthy pause. “Our average outdoor ticket is $2,900.”

Kendall Home Furnishings is among the growing number of traditional furniture stores that have discovered, or rediscovered, the benefits of the patio furniture market.

Greathouse Home & Patio, San Diego, California.

Decades ago, before the advent of specialty furniture stores, the majority of furniture stores carried seasonal patio products. But during the 1980s and onward, as specialty stores came into their own and full-line furniture stores prospered from the nations’ booming housing market, most let their seasonal furniture business fall away.

The Great Recession changed all that. Specialty stores suffered, and many went under as consumer spending plummeted. Casual furniture manufacturers started to seek new sales channels, including furniture stores, to replace the declining volume sold through specialty shops. The recession also clobbered mainline furniture stores, and many of those that survived once again became open to the idea of selling outdoor products.

The recession, said Kingsley Bate President Clay Kingsley, “opened up opportunity” for furniture stores in markets where specialty stores went under. In areas with limited specialty store presence, “if someone is going to sell (outdoor) furniture, it’s going to be the furniture store.”

Kingsley said growing interest in casual furniture is apparent at the High Point Market “where those furniture stores shop. It hasn’t been a revolution; it’s been sort of gradual.”

Some full-line stores may never expand into outdoor. Owners may feel uncomfortable breaking with tradition or fail to grasp how outdoor furnishings have evolved. “There are a lot of traditional stores that have a hard time stepping forward,” said Andy Boyce, vice president of sales for Seaside Casual Furniture.

Schroeder Furniture, St. Joseph, Michigan.

The department store Macy’s, which carries furniture in many of its larger locations nationwide, chose to experiment with outdoor furniture about four years ago. Products by Agio and NorthCape International were among the first brands placed in Macy’s furniture showrooms. The retailer rarely comments on its business practices, but information from casual furniture makers points to a rousing success.

“That’s been a great story,” said NorthCape President Tom Murray. “Clearly, there is some volume to be done.”

NorthCape got another entrée into full-line showrooms when some of its major specialty store clients were purchased by leading furniture store groups. These include Jimmies Rustics, which was absorbed by Michigan retailer Art Van Furniture, and Seasonal Concepts, which became part of Minnesota-based HOM Furniture.

“We fell into some opportunities,” Murray said, “and it opened my eyes quickly.” Full-line furniture stores, he said, “have been a big part of our success since 2009.” The company made a concerted effort to reach out to independent full-line stores in smaller markets at the same time it chased regional and national accounts, he said.

NorthCape currently does more than 20 percent of its volume through full-line furniture dealers. “If indoor stores had not entered the market, we would not have had the growth that we’ve had,” Murray said.

Sandy Sanborn, Owner of Sanborn’s For Your Home, Angola, Indiana.

Retail Experiences

Sanborn’s for Your Home has a 40,000-square-foot showroom in Angola, Indiana. “We’re in a large lake recreation area that just screams ‘sell me patio!’” said Sandy Sanborn. So, about a dozen years ago, he added outdoor furniture to his lineup.

“It’s turned out exceptionally well,” he said, noting that casual products account for about 20 percent of the store’s business. “It’s more of a fun purchase, not a hard sell.”

Sanborn’s carries 11 brands of casual, ranging from Telescope to Meadowcraft to Fishtales and Polywood. “Early in the season, special orders are phenomenal,” he said.

Doug Guerard, Owner Guerard Furniture

Doug Guerard is president of Guerard’s Furniture in Penticton, British Columbia, also a lake resort area where Canadians flock to their summer cottages. “These people like the best furniture they can find,” he said.

Guerard’s store has been in and out of the casual business several times since 1985, he said, and last reentered the category about two years ago. The store carries only the Telescope brand. An average casual furniture ticket is about $4,000.

Bacon’s Furniture, with stores in Port Charlotte and Sarasota, Florida, brought in its first casual products two years ago. Owner Bill Bacon’s casual brands include Summer Classics, Ebel, Lane Venture, Tommy Bahama Outdoor, Tropitone, Pride Family Brands, and others.

The larger Bacon’s Furniture store has about 100,000 square feet, with about 7,000 square feet dedicated to casual.

“So far, so good,” Bacon said, noting that casual products account for about 12 percent of his business. “We would like it to be 15 or 20 percent. We think we can grow the category more.”

Unlike stores farther north, which may clear casual products completely from the showroom during the off-season, Bacon’s Furniture displays outdoor furniture “all year, because it’s Florida.”

Bill Bacon, Owner of Bacon’s Furniture & Design with stores in Port Charlotte and Sarasota, Florida.

Bacon said he chose to enter the category with confidence and “make a statement,” which included bringing in an outdoor product specialist. The investment paid off and brought some surprises.

“What’s amazed me is the size of the tickets we’re writing in outdoor,” he said. “Sometimes it’s $15,000 and $20,000 packages.” As a homeowner, he noted, “It’s hard for me to justify how I would do that. We’re talking about nice stuff!”

Upscale casual furniture is a welcome balm for home furnishings retailers who are still trying to return to the heady sales days of the early 2000s.

“The interior furniture store has seen almost a decade of (indoor products) being a tough category,” says Henry Vanderminden IV, president of Telescope Casual Furniture. “They keep seeing the outdoor category growing.” Another benefit, Vanderminden said, is that the prime sales season for casual fills the gap when sales of indoor furnishings typically slump.

That was the case at Greathouse Home & Patio in San Diego. (Until September, the two-store business was known as One | Stop Furniture & Patio). After launching as an interior furniture store in 2002, founder Paul Rees looked for additional product lines such as billiard tables, hot tubs and children’s furniture. Nearby was a patio furniture store.

Paul Rees, Owner of Greathouse Home & Patio.

“Why should we give up that business?” he asked.

Greathouse now dedicates about 50 percent of its showroom to casual furniture at the height of the season, Rees said. Products by Mallin, Lloyd Flanders and Patio Republic are the most popular of the 15 or so brands offered by Greathouse.

Furniture merchants new to the category often remark about the build quality of their outdoor products. Those who have been in the business for a time know that shoppers must be educated about why prices are higher than those seen at Big Box stores. “You’ve got to stress the quality to get the consumer to understand the value” of fine casual furniture, said Scott Schroeder, owner of Schroeder Furniture in St. Joseph, Michigan. His store has been selling casual for more than a decade.

Jody Stein is vice president of sales and merchandising for Star Fine Furniture in Galveston, Texas. The family-owned business, which traces its beginnings to 1920, is situated on a Gulf Coast island yet added casual furnishings to its showroom only two years ago. Star carries products by Pelican Reef and Tommy Bahama Outdoor.

“I believe in the product,” Stein said, describing the powder-coat process used by Pelican Reef. “And the Tommy is built really well, like a battleship.”

The outdoor lines are not “a huge seller right now,” Stein said, but he sees bright prospects. “It seems like more people are building big pools and spending money on outdoor stuff because there’s more outdoor living right now. It only seems right to try and carry some (products for) that.”

Scott Schroeder, Owner of Schroeder Furniture.

Westrich Furniture in Delphos, Ohio, has carried outdoor furniture since it was founded more than 40 years ago. “We never left” the category, said Jack Westrich, now president of the business started by his father in 1937. The 160,000-square-foot store has about 8,000 square feet in patio.

Westrich calls Agio “our big line.” Other brands include Telescope, Homecrest, Braxton Culler, and NorthCape. “Patio was always important,” he said, noting that his customers have changed over the years. “Our traffic has gotten more sophisticated,” he said. “It’s more than buying a picnic table and four chairs.”

The 34,000 square feet of casual products at FurnitureLand South in Jamestown, North Carolina, occupy just a tiny fraction of the more than 1.3 million square feet of showroom at “the world’s largest furniture retailer.” Nevertheless, casual is an important category, said Shelby Sari, outdoor buyer and casual gallery manager.

“The outdoor category is growing by leaps and bounds,” she said. “It’s phenomenal.” She didn’t have overall sales figures specific to casual furniture, but “as a store, we are up over 15 percent for the year.”

FurnitureLand South carries a broad range of outdoor products, including Brown Jordan, Century, Braxton Culler, Tommy Bahama, and Tropitone. The showroom includes teak by Gloster and Kingsley-Bate, plus wood furniture by Jensen Leisure. Sales of Jensen were up 50 percent in 2013, she said.

Virtually all of the giant retailer’s casual sales are special order, Sari said. Showroom product is sold only when designs are closed out or items become shopworn. “We have people who come here just for outdoor” products, she said. Other shoppers come first for indoor furniture and return for casual goods as their plans and budgets allow.

More than a few people in the casual industry have wondered aloud if full-line furniture stores will maintain their enthusiasm for casual products when demand for interior furnishings eventually returns to pre-recession levels.

“As housing and the economy kick in, it will be interesting to see (which full-line stores) bow out,” said NorthCape’s Tom Murray. The casual business, he observed, “needs a driver, somebody in the office who wants to see it work.”

Based on reports from casual manufacturers and conversations with full-line furniture store people throughout North America, better quality outdoor furniture is solidifying its presence in full-line furniture stores. Unlike the era before the rise of specialty stores, casual furniture today accounts for significant individual tickets and can make a major contribution to a full-line retailer’s annual sales volume. The more important casual furniture becomes, the less likely it will be pushed aside in favor of more sodas, casegoods, and mattresses.

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