Accent furniture vendors counter pressures with innovative designs, delivery solutions
-- Home Accents Today, 2/1/2008
Accent furniture — the statement pieces, the ones that can really define a room — may be a little more immune to economic flux, but they are very sensitive to design trends. These items may be small or large, but their power to charm is key to their staying power.
“The market is a little bit soft, but it's not a major problem,” said Richard Chan, principal of Artmax, based in Chicago. Accent pieces are “not a huge ticket – people don't take a long time to make a decision.”
Chan predicted that in the coming year, “high ticket merchandise will not be that easy to sell.” He said small and unusually designed tables are among Artmax's best sellers at the moment, and these are where his product designers will focus in 2008. “When the economy is not that good, you have to give customers new things,” he said.
Accent furniture is a hard-to-quantify category among home accents because it encompasses a variety of pieces, but it is the second-largest category, according to the Home Accents Today 2006 Universe Study. Sales for 2005 were $13.9 billion, estimated for 2006 at $14.5 billion, and projected for 2007 at $15.1 billion. These pieces are popular and their distribution channels prolific, from traditional furniture stores to interior designers. For 2006, the fastest growing channel identified by the study was discount department stores, which was expected to grow 7.3% in 2006.
Joy Kirk, vice president of sales and merchandising at Carolina Accents in Greensboro, N.C., said new ownership in the past year has allowed the company to expand its product offerings, in both accent furniture designs and upholstery. The company's direction this year is best described as eclectic, she said, as the company experiments with offering several new accent pieces. One group of coordinating accents includes a vanity, foot-of-bed bench and upholstered headboard.
“We added chairs and settees,” she said, along with accent pillows and glass-accented chests. “We're trying to find what's unique,” she said.
Kirk said the company has been enjoying steady business with its accent products. Even with housing starts down, she said, “People are still redecorating even if they're not rebuilding. We've kind of been recession-proof until the last six or eight months.
“The biggest challenge to me is the increasing price of freight,” she said. “It happened in the past year. People are used to high gas prices, but they're not used to it being reflected in the price of their furniture.” Some pieces may be twice as expensive now to ship. “Some of the freight costs as much as the actual piece,” she said. “It makes it a very serious expense.”
China has become so developed as a producer now, she said, that “it's like ordering from California.” But as China's resources are being strained by demand, she said, companies are being pushed to look at new markets. “It's hard to get all that going. There are so many problems that occur at the beginning.”
She said with the higher-cost climate of importing, she foresees a return to more U.S. production. Carolina Accents purchased a factory in Mississippi in January. “We can be a lot more competitive,” she said.
Watch for price increases this year from some vendors, beset with large increases in freight and fuel surcharges and a plummeting U.S. dollar. Chan said these factors have led Artmax to increase prices about 5% for new pieces. “I don't remember any time that the Canadian dollar has been higher than the U.S. dollar,” he said ruefully. “The gap is big — this is why we've had to raise prices a bit.”
Michael Ricks, president of Furniture Classics in Norfolk, Va., said the company is becoming more focused in its product and price offerings after using “a shotgun approach” for its first few years to determine in which directions to focus.
He said 2006 was a banner year for the company, while 2007 was off, but diversifying has helped. “We've positioned ourselves in product and price to weather anything,” he said.
The company also keeps a sizable inventory, with 95% of his products in stock, that allows expedited delivery to customers, something he said is very important in the current climate. “For retailers out there fighting for a dollar, wouldn't it be nice to say they can get a piece in 10 days?”
He said being able to accurately order products is challenging, something he likens to throwing darts. Big sellers in Atlanta last month were a blanket chest, an antique bench and painted furniture with distressed finishes in black, blue and white, said Furniture Classics Marketing Manager Cathleen Markham.
The company is readying a gala launch this spring for its expanded High Point showroom, which will include about five dozen new products. The pressure is on for his design team: While generally designers expect that from a group of introductions, some will take off while others will not, Ricks said, “the goal this time is to get 60 true winners.”
Trifu Boronka, principal of Designer Wicker & Rattan in Orangeburg, S.C., said the company works with a range of customers, from wholesale and furniture stores to the design business, and that, Boronka said, has helped the company weather recent economic downtowns. “We don't depend on one category,” he said. “That is keeping us a little bit more flexible and busy.”
The company is expanding into new overseas markets, including Dubai and Singapore and is also shipping more to Barbados, Canada, Brazil and Chile. It also offers a competitive container program that allows customers to order from among certain product lines.
Designers bring the company very good business, especially in porch furniture, Boronka said. The company carries a variety of fabrics, does COM (customer's own material) orders and offers custom finishes.
“We've probably done more with cocktail tables in the past year,” said Bill Cain, president of Chelsea House, noting a rise in the popularity of metal designs. This is a bit of departure for the Gastonia, N.C., company, which is best known for its painted accent furniture. “I think it plays into the simplified design aspect people are buying into. He said popular finishes include antique brass and silver, painted black and gold. “That's probably been our hottest category.
“We're moving away from the traditional square and rectangular tables,” Cain said, and adding new round tables, some with antique mirror. Also new for this year will be 10 to 15 SKUs in pieces that combine table shelving with floor lamp styles.
One challenge Chelsea House faces is maintaining artisan-level quality in an immediate gratification market, Cain said. Handcrafted expertise takes time to develop in the factory and each design requires additional time for execution.
He will also be looking at ways to keep Chelsea House fresh and out front in the marketplace. “We have a look. My biggest design challenge is to be innovative within our design classification,” he said, adding that the company is joining in a trend toward not chasing the dollar downward. He said retailers, too, are finding that if they continue on that path, they are not making any money either.
Another challenge Cain sees ahead is inventory. “Everybody feeds each other. If the retailer's not moving the goods, no matter how innovative we are in design, you can't sell to someone who's full,” he said.
He said Chelsea House, which has showrooms in Atlanta and High Point, is in its second year of a three-year lease in Las Vegas and is watching that market closely. This year, he said, “will be the tell-tale year for us” for deciding the company's continued presence there. “Atlanta is the one true growing market for us,” Cain said, adding that with so many markets now and the disputes over High Point's market dates, the landscape is changing. “The challenge is to find where the people are and be important there,” he said.
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