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Hearth & Home July 2017

Hyde Park by Kingsley Bate at Skylar’s Home & Patio, San Diego, California.
Photo: ©2017 Milan Kovacevic.

Noticing Outdoor

By Tom Lassiter

As formal dining and living rooms give way to Outdoor Rooms, full-line furniture stores are becoming increasingly receptive to the casual industry’s message.

Casual furniture retailers must sometimes feel as though they can’t catch a break. Every season seems to bring new vendors selling outdoor furniture. You know the list: Big Boxes, DIY stores, wholesale clubs, mass merchants, home improvement centers, catalog merchants, online retailers, supermarkets, pharmacies, that guy in the vacant lot on Main Street, and so on.

Now add another type of competitor, a retailer that probably can be found in the same zip code as any specialty merchant, whether located in the largest city or the smallest town. We’re talking about full-line furniture stores.

Full-line furniture stores, where generations of shoppers have gone for everything from coffee tables to upholstered sofas, and king-size mattresses to table lamps, are the new (or renewed) beachhead for many casual furniture companies.

Some casual furniture makers, such as industry pioneer Brown Jordan, have always had a presence in better furniture stores. Furniture stores introduced Brown Jordan to its first customers nationwide.

Many full-line furniture stores dabbled in the outdoor furniture business before the category redefined itself in the 1980s, leading to the rise of casual furniture specialty retailers. But for the next 30 years or so, furniture stores and the casual industry quietly coexisted and, for the most part, ignored one another.

That changed with the Great Recession, when the economy sent every retail channel reeling. Consumers (even those with deep pockets) put the brakes on discretionary spending, leaving retailers of all kinds struggling.

Agio, sensing an opportunity in the chaos and fear, spearheaded the cultivation of furniture stores as a logical channel in which to place casual furniture in front of consumers.

“We felt indoor retailers would be more open to new and different ideas to grow their business,” says Agio president Bob Gaylord. Furniture retailers who found Agio’s story convincing include Macy’s, which sells home furnishings in many of its larger stores, particularly in the Northeast.

Full-line furniture stores now account for about 30% of Agio’s volume, Gaylord says, and that number is growing.

What Gaylord didn’t foresee was how long the Great Recession would last and the toll it would take on casual retailers. Many, from single-store operations to major regional chains, did not survive the deep and lingering recession.

The shrinking number of specialty merchants – some estimates put the loss of storefronts at close to 1,000 – has caused nearly all patio furniture makers to put concerted efforts into developing the furniture store channel.

Gloster Furniture, for example, recognizes that full-line furniture stores and casual furniture specialty merchants represent two different sales models, says Pamela Clark, director of Sales, retail/international.

Both, she says, are important, and Gloster has had full-line stores in its customer list for years. Now, however, full-line stores are getting a fresh look.

“We are beginning to focus very aggressively on pursuing more furniture stores,” she says.

Full-line furniture stores are increasingly receptive to the casual industry’s message. The economic upheaval of the last decade is just one reason. Another is the evolution in homeowner lifestyle trends that has de-emphasized the importance of certain rooms and their furnishings, such as formal dining and living rooms. That, says Wes Stewart, CEO of Sunset West, has directly affected full-line furniture stores and caused them to look for new products to replace that lost revenue.

As formal living and dining spaces have grown smaller or disappeared, the Outdoor Room has grown.

“The Outdoor Great Room has become part of the recipe for good home design,” he says.

Home architecture is changing nationwide, with the Outdoor Room gaining significance in all climates, from the Sunbelt to the soggy Pacific Northwest coastline. As homeowners put more significance on the role of the Outdoor Room, Stewart says, they become more willing to increase their budgets to make those spaces stylish, useful, and comfortable.

The buzz created by homeowners’ embrace of the Outdoor Room has not escaped full-line furniture stores, says Lou Rosebrock, senior vice president of Sales and Marketing for Lloyd Flanders.

“They talk among themselves and discuss the category,” Rosebrock says. “They read in most (furniture) publications about the growth” in the casual furniture business.

Outdoor living products are “not necessarily an easy sale” for a full-line merchant, Rosebrock says, but the category is one “that can be readily added to the offerings.”

Furniture makers heavily invested in serving the interior furnishings market are taking notice of the outdoor market.

Klaussner Furniture expanded into casual furniture with the introduction of Klaussner Outdoor in 2014. More recent is Ashley Home Furnishing’s entry into the category. The manufacturer reaches consumers through its network of Ashley HomeStores and also sells directly through its website.

Large, full-line chain stores also are moving into outdoor products. Haverty’s, with more than 100 stores in 16 states, now offers a fairly broad selection of casual furniture.

Grand Weave from Gloster at Parker Furniture, Beaverton, Oregon.

Significant Differences

Some specialty merchants may view the casual industry’s courtship of full-line furniture stores with skepticism. After all, top-flight specialty retailers pride themselves on understanding the characteristics of the various types of quality outdoor furniture, being able to communicate that to customers, and explain why look-alike yet inexpensive patio furniture is a poor investment.

Can the sales staff at full-line furniture stores be expected to ramp up their product knowledge and serve customers in a similar fashion? That remains to be seen on a case-by-case basis, and the jury is still out.

The many differences between the world of specialty merchants and that of full-line furniture stores are easily apparent.

The demographics of customers served by the two types of stores can vary wildly, as the stores often serve different economic niches. The atmosphere in a full-line store has a different vibe than that of a specialty store. Even the mindset of a typical customer may be totally different, depending on which store is being shopped.

“When people go to a specialty store, they are on a mission,” says Brian Blakeney, vice president of Sales and Marketing at Kingsley Bate. “When they go to a traditional furniture store, (buying casual furniture) may be more of an impulse.”

Selling fine casual furniture requires providing shoppers with in-depth product information and offering lots of customization. Special orders are commonplace and give a homeowner total control over a range of options.

Conversely, many full-line furniture stores depend largely on selling off the floor.

Upper-end casual products seem an odd fit in a retail channel where the stereotypical image (rightly or not) involves constant sales and promotional phrases that include “truckload sale,” “blow out,” and “no reasonable offer refused.” 

“Everything must go!” rarely is associated with elegant outdoor living products.

The differences between the two business models are a simple fact. Gary McCray, president of Klaussner Outdoor, had decades of casual industry experience when he launched Klaussner Home Furnishings’ new division and began dealing with an existing customer base of full-line stores.

“This is a pretty generalized statement,” he says, “but what I have learned is that they are pretty promotionally-driven on most of their categories. Outdoor is treated the same way.”

Rosebrock agrees. It’s more common, he says, for furniture stores to be “shooting for a lower end. They’re not interested in looking for a mid- or upper-price-point line.” 

The key to a successful union between a furniture maker and a particular full-line furniture retailer is due diligence. “You’ve got to find people that fit with you, just like on the specialty side,” says Terri Lee Rogers, president of OW Lee.

OW Lee, decades ago, counted a number of well-known furniture and department stores among its customers. “But that went away,” Rogers says. Most of OW Lee’s current furniture store customers have signed on within the last decade.

Sales generated by the furniture store channel are “not as big as specialty,” Rogers says, and represent “maybe 25% of our business.”

That percentage may grow in the years ahead because of continuing attrition among specialty retailers. The 2016 closing of Fishels, a leading casual furniture retailer in Portland, Oregon, is a case in point.

Larry Talbott, who had owned the business since 1995, told The Oregonian newspaper that the decision to bow out was not driven by business conditions.

“We had a record 2015, and were on track for another record year,” he told the newspaper. “I just wanted a new chapter in life. I’ve been in this business for 40 years, and I’m ready to do something else.”

The newspaper noted that the company’s retail property remained in possession of the Fishel family and was surrounded by intense development. Real estate opportunities have led to the closing of other successful specialty merchants.

 According to portions of Fishels’ website, which live on as digital dust, the retailer’s vendors included Brown Jordan, Summer Classics, Hanamint, Salterini, Tropitone, Woodard, Gloster, Cast Classics, Treasure Garden, OW Lee, and Laneventure.

Rogers says specialty retailers who don’t have a succession plan “and just walk out” are “kind of scary to us. So much of our business is dedicated to that (specialty) avenue, and it’s shrinking.”

The demise of Fishels created an opportunity for Parker Furniture, a full-line store in Beaverton, Oregon, less than 10 miles away.

“They had the corner on the outdoor market,” says Jill Andre, a buyer for Parker Furniture. She attended her first Chicago Market last year, preparing for the 2017 season.

Parker Furniture will dedicate about 7,000 sq. ft. of its 45,000-sq. ft. store to casual furniture, and it will have a presence on the floor year-round. The retailer also remodeled and installed new lighting. Parker leaned heavily on Gloster Furniture, one of its new vendors, for showroom inspiration.

Parker’s other casual lines include OW Lee, Tropitone, Jensen Leisure, Brown Jordan and Tommy Bahama Outdoor.

Parker Furniture has a nice display of Treasure Garden umbrellas and Tommy Bahama Outdoor furniture.

“We knew we had to go big or go home,” Andre says. “We’re excited about this upcoming summer and the difference (the new brands) will bring.”

Parker Furniture’s entry into the outdoor category, with top-flight brands and a significant footprint, make it unique among full-line furniture stores.

Sedlak Interiors is another exception, offering higher-end brands instead of depending on containerized volume. The full-line store in Solon, Ohio, has been selling outdoor furniture for more than 40 years. Its initial brands included Meadowcraft and Woodard. Three years ago, the store started keeping casual furniture on display year-round.

Sedlak Interiors’ lines now include Gloster, TUUCI, Treasure Garden, Brown Jordan, OW Lee, Summer Classics, Century Outdoor, and Castelle.

The store found customer acceptance surprising and gratifying.

“The first three Gloster dining sets we sold were bought for indoors, which blew my mind,” says Jan Sedlak, an owner.

Full-line retailers accustomed to selling a single item per ticket, such as a sofa or chest of drawers, note a significant difference in outdoor customers. Tickets, she says, “end up being a lot, because of the groups they do. There are so many multiple patios, and it’s so expensive.”

Mark Weinberger, owner of Weinberger’s Furniture in Augusta, Georgia, says his full-line store has offered casual furniture for about a decade. He recently added a 5,000 sq. ft. outdoor display area, and has a second location at the nearby resort community of Lake Oconee.

“What I’ve been told,” Weinberger says, “is that people who keep it on display year-round, sell it year-round.” His store’s brands range from SunVilla and Klaussner Outdoor to Lloyd Flanders, Tropitone, and Summer Classics, which he calls “our main line.”

Weinberger likes everything about the outdoor business except keeping track of incoming merchandise. An interior sofa, he says, typically ships with the frame and cushions packed together. That makes warehousing and the delivery process simple. The component parts of one casual furniture item often arrive in multiple boxes.

“For one outdoor sofa,” he explains, “you can have eight different SKUs, and they don’t come in the same box. It’s difficult. We get through it, somehow.”

Merchants who sell only outdoor products don’t complain about dealing with multiple boxes, he says, “because they don’t know any better.”

Arkansas Furniture, in Hot Springs, picked up some casual furniture lines about 15 years ago in response to customer demand. Owner Mike Muzny acknowledges that the casual industry’s peculiar seasonal buying schedule and volume discount pricing differ greatly from the interior furniture business and required some getting used to.

The store, which serves nearby second-home and vacation communities, displays most of its casual furniture in a gated outdoor area.

“The downside is the pollen,” Muzny says. “It’s a lot of work keeping it rinsed off.”

Overall, though, the casual business “has been good,” he says. “It’s grown every year. We’re happy we did it.”

The Montecito from Sunset West on display at Skylar’s Home & Patio.

Skylar’s Home & Patio, with stores in San Diego and Carlsbad, California, has sold casual furniture since opening in 2010. Owner Skylar Ireton says outdoor products account for about 60% of sales in the summer, falling back to around 40% for the remainder of the year.

“In Southern California,” he says, “developers are building homes around outdoor living areas. They are paving the way for homeowners to come in and buy patio furniture. We do very well with it.”

 The need to display so many types of furniture sometimes puts limitations on how much floor space a full-line store can devote to outdoor products.

The Antiquarian Shop in the Pittsburgh suburb of Sewickley has a 3,000 sq. ft. showroom. In early April, owner Jay Miller’s casual display consisted of two Kingsley Bate chairs. “That’s the only outdoor I have” on the floor, he says. “Period.”

The store’s other casual brands include Laneventure, Brown Jordan, Summer Classics, Century, and Lee Industries. Even with such limited showroom presence, outdoor furniture accounts for about 10% of the store’s business. The store employs three interior designers and serves other interior designers who sell to their customers.

“In the past three weeks, we’ve done about 70 grand in outdoor,” Miller says. “It’s doing pretty well.”

Sanborn’s for Your Home, in Angola, Indiana, dedicates about 6,500 sq. ft. of its 40,000 sq. ft. facility to patio. Telescope is the store’s largest casual vendor. Sanborn’s also offers products by Gensun, Cabana Coast, Winston, Ashley Furniture, Treasure Garden, and others.

Jenny Sanborn loves the casual industry’s practice of allowing customers to order early and pay later (known as “dating.”)

Telescope seating group, Hatteras Hammocks’ Adirondack group, and Treasure Garden’s cantilever umbrellas on display at Sanborn’s for Your Home, Angola, Indiana.
On the floor at Sanborn’s, there’s a NorthCape wicker settee, and a Gensun dining group.

“It’s such a bonus,” she says. “You receive the products and you don’t start paying for it until spring. We had 70-degree weather in February, and we had people buying.”

She notes that, item for item, casual furniture often is more expensive than interior products. Often, she says, “Consumers have sticker shock. You have to know your stuff; it’s not hard to educate people about patio.”

Expect outdoor furniture makers as well as full-line stores to make accommodations as they gain more experience and learn about one another’s businesses.

“For retail stores that focus on indoor (products), there is a bit of a learning curve,” says Gloster’s Clark. “There is even a learning curve for Gloster.”

Klaussner Outdoor is developing new products priced to fit the regular promotional events that so many full-line stores depend on. The goods “will be starting price-point,” McCray says, “that they can advertise.” For these stores, he says, casual furniture tends to be “a direct, container sort of business.

“I knew all along that we weren’t targeting our Premiere line, our best line for most full-line stores,” he says. Some stores do sell Klaussner Outdoor’s better goods, “but they tend to be folks that were probably in the outdoor business to begin with.”

Klaussner Outdoor’s business currently is about evenly split between specialty stores and full-line furniture stores, McCray says.

As more full-line stores enter the casual business, they will “give outdoor furniture the biggest exposure to consumers” that it’s ever had, says Agio’s Gaylord.

He’s counting paid advertising and website exposure, in addition to retail floor space. Some full-line merchants may even put up stores dedicated to casual products, as they have done with mattresses.

Today, Gaylord says, nearly two-thirds of consumers expect to buy outdoor furniture from a home improvement center. That, he says, “speaks volumes to the under-exposure of the outdoor category with retailers whose core business is furniture.”

Specialty retailers should not feel threatened as more full-line stores enter the business, Gaylord says.

“We see it as a way to generate an even larger pie for everyone to share,” he explains. “The experienced specialty retailer has the most to gain from any surge in the category. They have the largest selections and the greatest expertise in a category that most consumers know very little about.”

Individual performance at the store level will depend on developing a true understanding of the outdoor market.

“The full-line furniture stores that get it have done very well,” says Stewart of Sunset West. “The stores that don’t understand it, and aren’t willing to learn it, fail. That’s no surprise.”

Sanborn’s for Your Home, in Indiana, which jumped into the casual business in 2001, is a store that “gets it.”

“Patio is very fun, a fun sale versus indoor furniture,” says Jenny Sanborn. “Most of the time, when people are buying patio, it’s because they are going to have fun. It’s a very big category for us.”

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