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Hearth & Home July 2018

Biltmore collection.

Meet Mark Stephens

By Tom Lassiter

With 11 years in the furniture industry, he comes prepared to propel an already high-performing Pride Family Brands into even more growth.

Mark Stephens, named president of Pride Family Brands in March, has a diverse background and a focus on growing the company’s business.

Prior to his promotion in March of this year, Stephens served as Pride’s executive vice president of Sales for the previous six months. New Water Capital, a private equity firm, owns Pride Family Brands.

Hearth & Home: You joined Pride Family Brands in September 2017, and six months later became president. Tell us about your career before that.

mark stephens Photo: ©2018 MORPHOTO.

Mark Stephens: “I started my career back in ’91, in consumer package goods with Ralston Purina, and then Pepperidge Farm, and Campbell Soup. Initially I was in Sales roles, then Customer Marketing, and Marketing roles. I joined the furniture industry back in 2007 with Furniture Brands International in St. Louis. My initial role was Sales and Marketing for Broyhill, and then I became president of Broyhill in 2011. I did that up until Furniture Brands went into bankruptcy in September 2013.

“When we emerged as Heritage Home Group in November of 2013, my role changed; I was actually the only one on the Executive Leadership Team that stayed with the company at that time. They eliminated all of the brand president positions, and the company went to a functional organization structure – a Sales organization, Marketing organization, Supply Chain, and so forth. So I took on Sales for all of Heritage Home Group. I had all nine brands that were under the portfolio, and I did that up until March of last year.”

It seems that Sales and Marketing have been a consistent focus throughout your career.

Stephens: “Yes, I had some Operational experience as well. I was with Orkin Pest Control for four years. I started there in a business development role and then I ran part of their Midwest division, operationally, for a couple of years. That is what actually got me to St. Louis. With Broyhill, I had full responsibility across the business.”

Furniture Brands International and Heritage Home Group were primarily focused on the interior furnishings business. Talk about the differences you see between the interior furnishings business and the casual furniture industry.

Stephens: “The first obvious piece is that the customer base seems to be different. Pride Family Brands’ products are sold through a lot of specialty and patio stores, which obviously aren’t in the interior space. And the seasonality is obviously a big difference between the two businesses.

“One of the things that I have found to be very different is just the way the whole supply chain is managed. The specialty channel is used to purchasing what they need early and then having that supply available when the season hits. The whole idea of an early-buy program and making the purchases back in the fall for the season before it hits, is unique to the outdoor space, whereas in the indoor space, it’s much more consistent from a supply standpoint.

“I think one of the challenges that retailers in the indoor world who are trying to get into the outdoor space have is trying to adapt to that supply model. If you’re an indoor retailer, you’re not used to having to buy a container of product six or seven months (prior to the sales season).

“So, for me, I think the biggest challenge – coming from one part of the industry to the other – is just understanding how that supply chain works and being able to work and support the retailer to minimize the risks while optimizing the opportunities and not leaving them short when the sales continue.”

Hermosa Cushion Dining.

Isn’t Pride positioned to handle the seasonality of casual sales better than a lot of your competitors who are manufacturing in Southeast Asia? You’ve got a much shorter turnaround time from your manufacturing facility in Costa Rica to the U.S. market.

Stephens: “One of our greatest advantages is that we’re producing in Costa Rica. Our lead-time is anywhere from four to six weeks instead of 90 to 120 days; that is a big advantage from a supply standpoint. This past year we also started having finished goods available from a quick-ship perspective, having finished product that can ship within 48 hours. That is good for the folks who are in the indoor retail, but also for the outdoor retailers, because it gives them some flexibility during the season with the variations and the demand. No doubt, being able to produce out of Costa Rica with those lead times is a huge advantage for us.”

Is your quick-ship program fully implanted now and based with your headquarters in South Florida?

Stephens: “We actually do quick-ship with two of our brands. We’ve got warehouse space right here at the corporate office and quick-ship Castelle out of Florida. Product that ships special order out of Costa Rica flows through this warehouse as well.

“Then we have Elements by Castelle, which is our mid-price-point program that we produce in Asia, and we carry quick-ship inventory in Houston. The reason we do that is because we wanted to get it more centralized, so that we could manage the freight piece and be able to hit the West Coast as well as the East Coast. We set up the Houston facility last fall.

“We have five collections that are Elements by Castelle that we quick-ship. For Castelle, we have four best-selling collections that are available via quick-ship out of Ft. Lauderdale.”

Sectional (Modular) Deep Seating – Park Place Collection by Castelle.

What are those best-selling Castelle collections?

Stephens: “Park Place is our best-selling contemporary. Villa Bianca, which is a more transitional group. And then Roma and Monterey. Monterey is our best-selling traditional group, and Roma is a bit more transitional.”

What are we going to see at the Preview Show in terms of new product?

Stephens: “Customization is in Castelle’s DNA. But I think one of the challenges when you can do anything is that sometimes it can be overly complicated from a retail perspective. There are just so many options that it can be a bit overwhelming.

“So one of the things that you’ll see from us at the July market is a collection that for us represents a simplified customization. There will be one frame, but we’re going to offer consumers four different options for the inset in the back.

“The frame is transitional by definition, it can go either way. For example, one of the backs will be very simple. Another will be much more ornate. A simplified transitional back to a much more ornate traditional inset in the back will give it very distinct looks.”

Will all the backs be executed in aluminum? Or is there some resin wicker or something else going in there?

Stephens: “It will be all aluminum. It will all be manufactured in Costa Rica at the same retail price point, so the consumer can choose any one they want and the price will be the same. Most certainly, down the road, we will introduce more mixed media into our designs where the design makes sense.

“What’s really exciting is that this collection gives a retailer the opportunity to show potentially four different looks with only having to take up one slot to do so. So from a retailer’s perspective, you can potentially reach three or four different consumers and hit your transitional, your contemporary, and your traditional consumer with the same slot.”

Crescent Deep Seating – Bellanova Collection from Castelle.

What else new will debut in the coming weeks?

Stephens: “We’ve got crescent seating with our Bellanova collection. The seating is curved and allows for easy conversation, as well as positioning in outdoor spaces around fire pits or round coffee tables.

“We also have sectional deep seating that comes in individual pieces with our Park Place collection – left, right, center, and corner styles that can be configured to fit any outdoor space.

“I feel a lot of what happens indoors is starting to migrate itself outdoors. Part of that obviously is because the outdoor space is becoming so much more important; it’s becoming an extension of the home; it’s another room.

“Functionality and finishes are important drivers. When I was working at Broyhill back in 2011 and ’12, sectionals were a big emerging part of what we were doing.

“Live Edge was big in wood indoor furniture over the past several years, and Castelle brought Live Edge into outdoor. Our best-selling tabletop is a Live Edge top.

“Finishes are some of it; the Live Edge is some of it; sectionals and modularity are some of it; functionality is some of it.”

The Castelle showroom at the Merchandise Mart was redesigned a couple of years ago. Along with that came a marketing push that seemed to move the brand to a more upscale position as a top-of-the-line competitor. Is that program getting the results that Pride Family Brands hoped for?

Stephens: “Yes, we’re really excited about the momentum that Castelle has. It is established as a premium outdoor product. Castelle is clearly our preeminent brand and it allows space for Elements by Castelle to come in at mid-price points for us.”

Palm Springs Chairs.

What’s happening with Castelle’s contract or hospitality business? How has that focus evolved and how are you reaching out to that market?

Stephens: “Recently we brought in George Gikas to develop our contract business. We’ve always had a pretty healthy contract business in Latin America, because we have the relationships and the production facility is there, but domestically it’s just not a space that we have played in. The challenges of getting into the hospitality business are, first of all, you obviously have to know who the decision-makers are. That’s the purchasing agents, that’s the large chain organizations, the design groups, that are really influencing and making decisions. You have to know who they are, and you have to cultivate those relationships.

“George ran the contract business, the hospitality business, for Heritage Home Group prior to joining us here. He brings the relationships and the credibility with him, because he knows who the key decision-makers are in all three of the areas that I mentioned.

“He brings to us the knowledge of what’s important to them, the lead times that are important to them, what the expectations and requirements are from a spec and a quality standpoint.

“One of the huge advantages that we have in the hospitality business is that we don’t require 90- to 120-day lead times because we’re not sourcing out of Asia. And when it comes to designing product that is specific to hospitality properties, if we’re given a drawing in the morning, we can have a physical sample by afternoon. You don’t have to wait months for it. I can do it the same day. So that gives us another real advantage from a design standpoint. It really truncates the development time for potential hospitality opportunities.”

Napoli Cushion Dining.

Are you going to develop a separate sales force for hospitality/contract?

Stephens: “No, we will take a two-prong approach. We have customers, particularly designers, who also do hospitality business, and we’re not here to compete against our current customers. So, where they have opportunities for hospitality roles, we will support that, and we will do that through our current sales organization.

“Then we’ll take a second tier approach. We’ll have a dedicated hospitality sales force that cultivates and does business primarily through purchasing agents, the larger design firms, and then sell directly into the chain organizations such as Marriott and others. George will lead those sales teams.

“We will support the senior living and assisted living channel as well. We think that is also a big opportunity, but our primary focus out of the gate will be hospitality.”

Are you going to have a presence at hospitality industry trade shows, such as HD Expo?

Stephens: “We showed at the Boutique Design show, the BDwest show, back in April. We were at HD Expo but didn’t have a booth. It’s a very large show, and we didn’t feel like we were quite there yet. We will certainly be there for next season.”

English Garden City Cushion Dining.

Crafting English Garden City.

What is happening with the design channel?

Stephens: “The design channel is actually our fastest-growing channel right now. We’ve had a tremendous amount of growth over the past 12 months. We have a three-prong approach.

“With the Trade Showroom Partnership Program, we will provide showroom floor samples on an extended term basis. We also feed to them any leads that we get that we wouldn’t sell directly to. In return, our only request is that we get some secured permanent space on their floor. We hope to become their preferred vendor of outdoor aluminum furniture.

“The trade showroom program is the most important avenue to the design channel because it’s difficult to serve thousands upon thousands of interior designers when we’ve got trade showroom partners that are already catering to the trade.

“We do sell directly to designers as well. They tend to be larger firms, not ones that would necessarily go into trade showrooms anyway.

“From my perspective, what’s most important in the design channel is service. The design channel has a high expectation and a high need for customer service. Customer service is the key to being able to serve and support and grow that channel.

“The reason we think we have such a strong opportunity in that channel is that when a designer is trying to put their own style to whatever it is they are creating for their customer, we can allow them to do that, and do it in lead times that are much more flexible and certainly beyond just being able to change the cushion covers. We think that lends itself very nicely to their needs.”

You mentioned that the design channel is Castelle’s fastest-growing channel. What percentage of your volume is the design channel responsible for?

Stephens: “The design channel is probably about 20% of our business today. We’re very excited about it.”

What is happening with the specialty retail channel?

Stephens: “Retail in general remains a challenge, whether it’s a specialty channel or any channel. The ones that are winning there are the ones that can differentiate themselves and provide value to the consumer. What we’re trying to do is support our retail partners in being able to do that. When you think about custom designs, the simplified customization with the collection that we are bringing forward is a big piece of it.

“I think every retailer out there would probably agree that they would rather do business with fewer suppliers than more suppliers. So the more that I can be easier and simpler to do business with and support them, the more they will want to do business with us, and partner with us.

“Service is just as important for the retail channel as well. When the consumer buys, they buy from the retailer. Our ability to make sure that the retailer is able to provide an excellent experience to the consumer makes us a more valuable partner to them.”

Coco Isle Cushion Dining.

Crafting Coco Isle.

What’s your take on the general health of the specialty channel these days?

Stephens: “It’s hard for me to really say. I hate to paint a broad stroke picture of what I think the channel is doing. I’ve got retailers in the specialty channel that are doing extremely well and growing. And there is certainly a continuing pressure on other retailers. I think specialty retail continues to be a very vibrant and growing channel for us.”

Is the channel growing by picking up new storefronts, or is the channel growing with increased volume through existing retailers?

Stephens: “It’s definitely a combination of both. We certainly have more doors today than we had even a year ago, so we’re selling through more locations. But it’s such a fragmented business that there’s much geography still to be covered. I can tell you that, year-over-year, same-store sales have grown for us.”

What about the mainline furniture store channel?

Stephens: “I think the biggest part of that is that they operate differently than a specialty retailer does. That’s why we have done the quick-ship program, because that’s much more in line with the way a full-line furniture retailer is used to buying.”

How important is that channel to you now?

Stephens: “It is an emerging channel for us. It’s not to the size the design channel is. We’ve got some very large full-line furniture retailers in our portfolio, but the number of full-line furniture retailer accounts in comparison to specialty retailers is a very small percentage.”

Which of the major online vendors, such as Wayfair, is Pride Family Brands working with these days?

Stephens: “We work with online vendors with a dedicated brand called Leona. That is our e-commerce brand, so it’s unique product dedicated to that channel. We sell that today through Wayfair. We have goods on One Kings Lane, and we’re with, and actually there are a couple of other ones. Hayneedle would be another one.

“We made the decision to run our e-commerce through a separate brand with dedicated collections. You won’t see Leona collections on retail floors, and you won’t find our Castelle collections on e-commerce sites.”

How old is the Leona brand? When was it launched?

Stephens: “We introduced it back in the fall and really did not get onto sites until about February or March of this year, so it’s very much in its infancy.”

Is the Leona-branded product sourced in Asia?

Stephens: “No. The Leona product is produced in Costa Rica.”

How may SKUs are in the Leona line?

Stephens: “There are 12 collections.”

Price-point wise, where does Leona fall in your product lineup?

Stephens: “It would be comparable to Castelle.”

Isn’t it amazing that the American consumer will spend that amount of money on a product they haven’t touched, sat in, or seen in person?

Stephens: “Yes, it surprises me as well. But at the end of the day, we don’t choose how the consumer wants to buy, so we support it and we support our partners.”

What’s the latest on Castelle associating with celebrity designers and creating specially branded collections?

Barclay Day Bed.

Stephens: “We debuted our second Barclay Butera Outdoor Collection for Castelle at the spring High Point Market. We also launched the Estate Collection, which we developed in collaboration with the Biltmore Estate in Asheville, North Carolina. The reception on that was extraordinary. Estate will be in the July Premarket, and there will be future collections out of the Biltmore relationship, as well.”

What else can we look forward to at Premarket?

Stephens: “Elements by Castelle will have four new collections there. Going forward, it will be an eight-collection program, and you’ll see a consistent story across all of the collections. We’re very excited about that. All eight collections will be available in our quick-ship program. Mixed media will be part of most of the collections that we go forward with.”

How many collections were part of Elements by Castelle when it debuted last year?

Stephens: “There were 12 collections.”

So you are introducing four new ones and will go forward with eight?

Stephens: “That’s right. We’ve eliminated eight and are going forward with the four best sellers, plus four new ones that are more in line with the design study that we’re going for. You’ll see four traditional groups, two transitional groups, and two contemporary groups. That’s the kind of ratio we would like to stick with going forward.”

Are we going to see Pride set up a West Coast warehouse to better serve that part of the nation?

Stephens: “We definitely view the West Coast as an opportunity for us. We’re underdeveloped out there relative to the rest of the market. We think a presence on the West Coast is probably the right way to go about doing that.”

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