By Tom Lassiter
Alberta is hurting because of the slump in oil prices, and Canadians everywhere are paying a premium for imported goods because of the weak Canadian dollar. But are those factors putting a crimp in casual furniture sales?
Canadians accept that the value of their dollar fluctuates in comparison to the U.S. dollar. Sometimes the currencies are nearly equal in value, and sometimes the Canadian dollar lags. This is one of those down cycles.
Rather than panic and horde their cash, Canadians do what has to be done. If that includes purchasing new outdoor furniture, so be it.
In order to reduce retail sticker shock, some patio furniture retailers report absorbing some of the exchange-rate differential. This, of course, cuts into their profits. Everyone on the Canadian side of the border hurts when the U.S. dollar is nearly 30 percent stronger than its Canadian counterpart.
|Clarinda Kung, Ginger Jar Furniture.|
Clarinda Kung, owner of Ginger Jar Furniture in North Vancouver, has experienced such loathsome currency downturns before. She says, “When our Canadian dollar is weak, I say to my staff, ‘Don’t worry. We’re all on the same boat.’”
Ron Batt, owner of Crystalview Pool Spa Patio, also in North Vancouver, reports record sales in April and May. “We’ve had big months,” he explains, “but the margins are nowhere near where they used to be. The exchange rate’s killing us.”
It’s a familiar scenario.
“Virtually everything I buy is in U.S. dollars,” Batt says. “We’ve gone through this for many years. You take the good with the bad.”
Sales are up this season at Ginger Jar, which caters to a clientele that is fashion-conscious, well traveled, and presumably well off. Otherwise, they couldn’t afford to live in booming North Vancouver.
The city, Kung says, is “growing like a bamboo shoot. Everywhere you go is new condos.”
Hearth & Home interviewed a number of Canadian patio furniture retailers located across the country. While not all reported an increase in sales, as Kung did, no one came across as truly pessimistic about the economy. The current weak buying power of the Canadian dollar is simply something to be endured. Better times will return, as they always have before.
Canada is home to a number of importers and resellers of casual furniture, such as Ratana in Vancouver. But the number of companies actually making furniture in Canada remains small and is apparently getting smaller.
Limberlost, a manufacturer of Western red cedar Muskoka- and Adirondack-style furniture, apparently closed during the summer, according to a retailer of the brand. The company’s website remains online, but phone calls go unanswered.
Times have never been better for C.R. Plastic Products, the company previously known as Canadian Recycled Plastic. The 22-year-old company, which makes outdoor furniture from plastic reclaimed from recycled water bottles, milk jugs and other sources, enjoyed a 37 percent boost in sales this year.
“We’re probably looking at another 37 percent increase next year,” predicts Jamie Bailey, president and co-founder.
The company recently tripled its facilities by moving into a 300,000 sq. ft. building in Stratford, Ontario. Eighty-five percent of Ontario’s recycled plastic water bottles are processed by C.R. Plastic Products to become patio furniture. The company also gets plastic from other waste stream sources, including some in the United States.
About 65 percent of the company’s products are sold through U.S. retailers, Bailey says.
“The U.S. market is huge for us. Your population is larger and your climate is better,” he notes. “And with NAFTA (the North American Free Trade Agreement) duty-free, it’s easy to get stuff across the border.”
Selling into the United States when the Canadian dollar is at a sub-par value does bring his company additional cash, but it’s not a giant windfall, Bailey says.
“Plastic is a commodity, like gold and silver,” he explains. “Maybe 95 percent of the plastic we buy is in U.S. dollars.”
Patio furniture retailer Peter Marshall is a fan of the C.R. Plastic Products brand. Marshall and his wife, Sherri, own Sherri’s Living Large, a 20,000 sq. ft. showroom in Waterloo, Ontario.
Marshall says, “This has been a really good season. People are still putting out money to buy high-end furniture.”
The store’s brands include OW Lee, Cabana Coast (an Ontario-based importer), and Patio Renaissance.
“We thought we would see a decrease (in sales) because of the rise in prices with the dollar,” Marshall says, “but we just haven’t seen it. We’re very surprised.”
|Andy Paul, Sun Country Leisure Products.|
Andy Paul, owner of Sun Country Leisure Products patio furniture stores in St. Catharines and Burlington, Ontario, says consumer price resistance didn’t increase along with substantial price increases this year.
“We didn’t see a lot of resistance,” he says. “People just seem to recognize that’s the way it is. Anything bought in U.S. dollars is more expensive this year.”
Paul did notice a disparity in how his stores performed, however. Sales at the St. Catharines store were up, perhaps enhanced by a competitor’s closing. The Burlington store did not see a corresponding increase in business. Strong competition from other patio stores is one potential reason; another is road construction that hampered access to the store.
“It’s really hard to figure out what happened this year,” he says. On balance, “It’s been a decent year.”
Summer in Ontario was “stifling hot,” he says. Sales of shade products were strong; sales of chaise lounges weren’t. Outdoor dining furniture sold well, he says, though that category still is secondary to deep seating.
“Accessories have been very strong,” Paul says, mentioning replacement cushions and furniture covers.
Liz Bowley manages Beachcomber Home Leisure in Richmond, British Columbia. The shop, literally a store within a store, is inside a RONA Home & Garden (similar to a Home Depot in the U.S, but independently owned in Richmond).
Beachcomber Home Leisure’s positioning is unique. Shoppers don’t even have to leave the building to find patio furniture alternatives; RONA also sells deck and patio furniture.
Bowley says Beachcomber offers two primary lines: Canadian-based Corriveau, and Telescope, which is based in Granville, New York. Corriveau’s website notes that the company formerly designed and manufactured patio furniture; now it “imports the best from Asia.”
The U.S.-made Telescope products are, by comparison, more expensive, she says.
“People say, ‘My, that is really pricey.’ But we have a group of customers that really prefers to shop North American,” she says. “We’ve held on to a lot of customers that I was afraid we might lose this year.”
Umbrellas sold well in famously rainy British Columbia. The shop carries models by Galtech International and Treasure Garden. “We have no trouble selling them at all price ranges,” she says. “We sell a lot of cantilevers.”
In booming North Vancouver, where Batt says “You can’t buy a shack for less than C$2 million,” Crystalview expanded by a third this season. The store now has about 10,000 sq. ft. of showroom.
The area remains a magnet for wealthy Asians even though the province now slaps them with a 15 percent real estate surcharge if they are not “landed residents,” roughly the equivalent of a legal immigrant in the United States.
Crystalview recently served an Asian couple who had purchased a C$10 million home and needed outdoor furniture.
“They didn’t care what it was so long as it was expensive and really nice,” Batt says. “And they had to have it delivered that afternoon. Which I made sure of.”
The store carries furniture by Kingsley-Bate, OW Lee, Woodard, “and a bit of Ratana,” the importer based in British Columbia. That brand, Batt says, “is sold in every store on every corner.”
The store also carries Lloyd Flanders products and stocked the upscale, contemporarily-styled South Beach collection this season. However, Batt says, “It didn’t sell very well, because the price points are very high.”
|Jill Schwartzentruber, Casualife Outdoor Living.|
Price points approaching C$20,000 for a single item did not deter shoppers at Casualife Outdoor Living, which has stores in Markham and Missasauga, Ontario.
Business manager Jill Schwartzentruber says the store sold out of its stock of “big wow pieces,” which she described as “huge, canopied, daybed sectionals with dome tops” by Skyline Design. The product retails for C$18,000.
“We’ve always carried high end,” she says. “You can’t get a lounge grouping for under C$5,000, and it goes up from there.”
Business in general, she says, “is great. We’ve been growing.” Tickets average C$7,000 to C$8,000.
The stores, previously known as Salco Patio & Leisure, rebranded five years ago to become Casualife Outdoor Living. She says the store buys only in container lots, selling products by Parker James, Summer Classics, and Erwin & Sons, in addition to Skyline Design. Casualife also imports private label outdoor furniture.
Jennifer Schramm, who with her husband, Aaron, owns Wicker Land Patio in Calgary, Alberta, says business has been slower than normal this year. She attributes that to the depressed oil economy in the province, coupled with the unfavorable exchange rate.
“We’re not doing badly,” she says. “Customers are just taking a little more time” to decide, sometimes returning to the store five times. “But there are still lots of people who have money, so we’re not dickering too much on price.”
A typical sales ticket is between C$3,000 and C$5,000, she says. Sales are a bit more robust at a second store in Kelowna, British Columbia.
The store’s brands include Ratana, OW Lee, Telescope, Homecrest, Patio Renaissance, and C.R. Plastic Products.
“We’ve been doing a lot more with Canadian companies,” Schramm says, “because the ship time is less and because of the cost.”
At Patioline, also in Calgary, business is “pretty fair, considering we’re in a recession,” says Les Svindt. He and his wife, Marie, have owned the store for 12 years. “We’re all high-end here,” he says.
Brands include Tropitone, Three Birds, Barlow Tyrie, Woodard, Ebel, Summer Classics, Polywood, and Erwin & Sons.
Patioline’s customers are showing a preference for stainless steel, and “very clean, modern lines are doing very well, so Barlow is very popular with us.”
Svindt says he’s optimistic about the future and hopeful that “our Canadian dollar will strengthen up a bit.” He’s seen margins grow slimmer as a result of the exchange rate. “We really can’t request all of that added cost from the consumer,” he says.
Aqua-Tech sells outdoor furniture as well as pools and spas in Winnipeg, Manitoba. Business this season has been “pretty average,” says co-owner Glen MacGillivray, “nothing dramatic one way or the other.”
The shop features furniture by Winston and Domus Ventures, and umbrellas by Treasure Garden.
|Phil Squarie, Jr., Wicker World.|
Wicker World in Manitoba trimmed its margins on products from some suppliers and altered its buying program to moderate the price increases presented to shoppers.
“The stuff that used to be the mid-range is now becoming the higher end,” says Phil Squarie, Jr. “Our strong suit is the C$3,000 to C$6,000 range. Unfortunately, some of the higher-end stuff we’ve had to push out of the store to keep things looking reasonable.”
Wicker World dropped no lines, he says, but bought fewer high-ticket items.
The store increased its early buy with C.R. Plastic Products by 25 percent, he says, to become a more important retailer. “We really wanted to get product on the floor,” Squarie says.
As 2016 winds down, he expects sales this year to match those of 2015. And that, Squarie says, is OK, “keeping in mind that we had a huge increase last year.”