Tuesday, June 7, 2011 | Edited by Daniel Moores
||Furniture Retailers Say Memorial Day Sales Up
But Aren't Sure If It's a Trend
Furniture retailers reported decent to excellent sales during the long Memorial Day holiday weekend, but just how this bodes for future business still appears up in the air.
For some, the strong results were a welcome change to an otherwise weak May, while others saw it as a continuation of positive momentum that has been building this year. However, rising gas prices and the recently reported double dip in home values has some wondering if the holiday gains will be short-lived.
Sales were up about 7% for Jackson, Miss.-based Miskelly Furniture during a three-day event (excluding Sunday when the store is closed), and that came as a relief to Oscar Miskelly, a partner in the business with his brothers Chip and Tommy.
"We were kind of concerned because the month hadn't been that strong," Miskelly said. He added that retailers across the country also now have to worry about a recent report indicating a double-dip in home valuations that's "a little discouraging."
Despite the poor economic backdrop, Miskelly's promotion -- which included "$150 off at the door" Monday on a purchase of $699 or more and 12-months free interest financing -- seemed to do the trick. The retailer also threw in a couple of popular free television offers with certain $999 or $1,999 purchases "that definitely added a little shot in the arm as well."
Miskelly said Memorial Day used to be a harbinger of what retailers could expect for the summer, but not anymore. If anything, it speaks to consumers' changing shopping and buying habits and "how they are waiting for holiday weekends when they get the best deals," he said.
San Diego-based Jerome's reported solid holiday weekend results.
"We needed it because May was not performing well," said President and CEO Lee Goodman. Total sales were up about 18% from the same period a year ago, and same-stores sales increased about 13.5%, he said. Jerome's is known for an everyday-low-price strategy and, as usual, didn't run a special holiday promotion.
Despite the strong showing, "we still didn't get out of May with an increase," he said. "It was the first decrease in same-store sales in 20 months."
While higher gas prices and a still shaky economy may have played into the month's results, Goodman said the bigger explanation for the decline was probably an atypical VIP customer event Jerome's ran last May that brought business forward from June into May 2010. So May sales the year before were tough to beat.
First quarter sales were very strong for the retailer but softened in April and moved down in May, which Goodman said seemed to be in line with the timing of rising gas prices. But there were other factors, too, including supply chain issues as overseas factories weren't able to produce what they thought they could coming out of the Chinese New Year, he added.
Gas prices could affect sales going forward, Goodman said, but are "not enough of an issue" to lead to more same-store sales declines.
Jeff Bacon, general manager of Port Charlotte, Fla.-based Bacon's Furniture & Outdoor Living, said traffic and sales at the company's three stores were about double what they were last year for the holiday event.
He also said the higher gas prices were having a positive effect, attributing the strong results in part to people wanting to spend more time at home due to a number of factors, including steep fuel and restaurant prices.
"People are having more in-home fun than out of home experiences," he said. "That is encouraging people to make their homes more comfortable over the last several months."
Bacon's Memorial Day sale promotions started May 18 and continued through the holiday weekend. As part of the promotion, customers received an additional 10% off sale prices if they purchased 10 items.
"It helped increase the average ticket and was a win-win for the customer and for us," he said.
Steve Harmon, director of sales and marketing at Tigard, Ore.-based Paul Schatz Furniture, said Memorial Day weekend traffic was up 10% and sales were up 20% compared with last year.
Helping drive that traffic was a combination of television, print and e-mail ads that offered discounts on major brands and special financing offers, as well as in-store coupons for additional discounts.
Harmon sees the weekend's activity as a continuation of the positive momentum that has been building in recent months.
"We just seem to be reaching our goals every month," he said, noting that the Schatz family also has made investments to keep the retailer fresh and up to date. "We are in a good place....we are moving through the recession in a position of strength rather than looking like we are standing still."
Charlotte, N.C.-based Broad River Furniture's Ashley Furniture HomeStores also used coupons -- and in a big way for the first time. The retailer played on Apple's "There's an app for that," slogan, advertising "There's a coupon for that." It ran dozens of discount coupons across all categories, promoting heavily in newspapers, online, via direct mail as well as on television and radio.
Among the coupon offers were a $249 queen sleigh bed, a $299 sofa and a $499 "blended leather" reclining sofa. The stores in the Carolinas and Georgia also ran a 48-month no-interest financing offer, and showed how consumers could use select coupons combined with the financing for low monthly payments (a bedroom group under $1,000, for instance, for $19.99 a month).
"We were mildly pleased with it," said Charlie Malouf, a partner in the business with Jonathan Ishee. "It was better than last year. We comped up, but it wasn't spectacular."
Results also varied by market. Augusta, Ga., struggled, for instance, while the Charlotte stores were flat, and neighboring Gastonia, N.C., was up big as were Broad River's South Carolina stores in Greenville, Spartanburg and Anderson.
Malouf said the first four months of the year were up from 2010 and that the company, like others, was looking for the Memorial Day promotion to lift May results. Instead, the month turned out "a little better than flat," he said.
Part of the problem may be some waning interest in television-and-furniture promotions, which had been driving sales for quite a while.
"We've got to find the next big hook," Malouf said. "We were hoping it would be coupons. And we're going to go back to (a coupon event). We learned some things and we'll refine it."
Mike Forwood, president of Austin, Texas-based Louis Shanks, said his stores beat last year's Memorial Day sales by about 10%.
"It's not the business we did in our heyday, but it's better than last year," he said.
He attributed the sales increase largely to an aggressive advertising campaign that started about 10 days before the holiday and included direct mail, TV, radio and print media, and e-mail blasts to its core customer base.
"These days you have to cover every single avenue to extend your reach," he said.
Forwood added that there is still some pent-up demand for high-end consumer goods, and said consumers remain conservative in their purchases. However, he is starting to see spending increase amid rising consumer confidence.
He also believes there are excellent values for consumers shopping for furniture. Thanks to those values, he said, Shanks has strong inventory levels and is experiencing healthy margins.
"We are real upbeat," he said. "I am still cautious in the way we manage inventory dollars, but we will maintain a good conservatively aggressive approach to the business."
At Indianapolis-based Kittle's, CEO Eric Easter said the Memorial Day weekend event was the biggest in the company's history.
And unlike some others, "The rest of month going into the holiday weekend was outstanding," too, he said. "We expected the holiday to be good, but the most satisfying thing was that even prior to the holiday our business has been very good."
Kittle's key offer was savings of at least 50% plus no-interest financing for two years. Sales were up over plan, and same-store sales increased more than 15% for both the long weekend and the month, he said.
Like others interviewed for this story, Easter has heard reports of mixed results from peers and believes Kittle's results are probably due in part to the many changes its been making in recent years -- including broadening its assortment to appeal to a broader consumer base -- and its aggressive promoting.
"It takes extremely strong promotions to get people to wake up and buy furniture," he said.
It has been a good year for Kittle's and last year was the best year in many, Easter said, but he isn't ready to tie too much of the future to the retailer's strong Memorial Day showing.
"We just take it day to day," he said. "We don't expect the economy to be any better so it's all about taking share."
(Source: Furniture Today, 06/06/11)
||'Made in America' Makes Money
The Made-in-America label has undergone a deluxe makeover. Everyone from Brooks Brothers to the Olsen twins is using it to hawk luxury goods, a tactic made popular by blue-collar brands such as Levi Strauss & Co. and Chrysler Corp.
Menswear maker Joseph Abboud has a "Made in USA" banner on his website with a link to footage of the Massachusetts factory that crafts his suits. Brooks Brothers has factories from New York to North Carolina, and The Row, the luxury fashion line from Mary Kate and Ashley Olsen, manufactures most of its clothes in America's biggest cities.
"There is a customer that appreciates that the product is made in the United States and is willing to pay for the difference," Brooks Brothers Chief Executive Officer Claudio Del Vecchio said in an interview. While Brooks Brothers made few goods in the U.S. 10 years ago, today a "large percentage" is American-made, he said.
The U.S.'s reputation for quality is benefiting upscale labels as more Americans question where their goods come from, and how their buying affects the economy, said Pam Danziger, president of Unity Marketing Inc.
"Made in America feeds into the values proposition," she said. "They are voting with their money not just for U.S. jobs, but for a way of life. In 2007, they were on a spending jag -- they weren't thinking about things like this."
Luxury-goods makers in the U.S., the largest market, stand to profit: Almost two-thirds of wealthy consumers say they try to buy American when they can. Global spending on luxury apparel, accessories, watches, jewelry, perfume and other products may climb to 185 billion euros (about $260 billion) in 2011 from 172 billion euros last year, excluding currency moves, Bain & Co. said May 3 in a report.
More than three-quarters of affluent consumers surveyed this year by American Express Publishing and the Harrison Group, a luxury research firm, said they like brands made in America, up 5 percentage points from 2008. Sixty-five percent say they try to buy U.S. products whenever possible, a 3-point gain.
Among more than 1,300 affluent shoppers surveyed by Unity in April, the U.S. ranked highest on an index measuring the quality of its luxury goods manufacturing, scoring 267 compared with an average of 100, the Stevens, Pennsylvania-based firm said. That topped Italy and France, home to Salvatore Ferragamo Italia SpA and Hermes International SCA, respectively.
Blue-collar goods have a history of using patriotism to attract U.S. consumers. Denim makers such as Levi Strauss have harked back to Wild West origins, while Chrysler, which has used the slogan "Imported from Detroit," created TV ads urging prospective buyers to remember their American roots.
The self-made nature of much of America's wealth may be one of the reasons the pitch is so appealing, says Andrew Sacks, head of of New York luxury ad firm Agency Sacks.
"There is a built-in inherent interest among those successful people to do whatever they can do to help," Sacks said. Recent increases in labor costs in China, a sagging greenback and stalling U.S. economic growth probably will lead to more American manufacturing, he said.
Take Enfield, Connecticut-based Brooks Brothers. Almost all its suits are made in its factory in Haverhill, Massachusetts, while made-to-measure shirts and Black Fleece shirts are put together in Garland, North Carolina. The price on an American Brooks Brothers shirt is as much as $150, or 70 percent more than one made in Malaysia.
The Olsens' women's label, New York-based The Row, uses factories in its home city and Los Angeles to make fashions such as its $250 white T-shirts and $2,350 short dresses. The brand has found favor with the likes of First Lady Michelle Obama and actress Julianne Moore, as well as with critics: The former "Full House" child stars got a nomination this year for a new talent award by the Council of Fashion Designers of America.
Tiffany & Co. has moved past its Northeast home turf and into the South by expanding its manufacturing base to Lexington, Kentucky. The New York-based company makes 60 percent of its jewelry itself, all of it in the U.S., compared with 20 percent 15 years ago, according to Mark Aaron, a company spokesman.
The Made-in-America mystique isn't a requisite for success: Most of Polo Ralph Lauren Corp.'s goods are made outside the country, and Coach Inc., the largest U.S. luxury handbag maker, manufactures a small portion of its goods in the U.S.
Still, says Brooks Brothers' Del Vecchio, making things in America is about more than just the label: It's about having the goods to back it up.
"The quality is really the reason," he said. "It gives us better control of the product."
(Source: Bloomberg, 05/26/11)
||Black, White and Red All Over: Newspaper Ads Dive
The first quarter of 2011 brought no relief for the newspaper industry, which suffered another round of declines in print advertising revenues.
The first-quarter results from the Newspaper Association of America stand out against a general recovery in ad spending for other media, and suggest that newspaper print ad revenues are locked into a permanent, long-term decline.
Total print advertising revenues fell 9.5% from $5.25 billion in the first quarter of 2010 to $4.75 billion in the first quarter of 2011, according to the NAA -- the lowest first-quarter revenue figure since 1983.
Those stats are down 55% from 2006, when total first-quarter print revenues came to $10.5 billion. This marks the 20th straight quarter of year-over-year print revenue declines.
As in previous quarters, the losses were spread across all of the main advertising categories. National advertising fell 11% from $1.04 billion to $924 million; retail fell 9.5% from $2.95 billion to $2.67 billion; and classifieds fell 8.15% from $1.25 billion to $1.15 billion.
Within the classifieds category, automotive slipped 4.7% to $266.5 million and real estate tumbled 19.3% to $197.7 million. Only recruitment increased, ticking up 4.3% to $165.7 million. All other types of classifieds fell 8.5% to $520.8 million.
The one bright spot on the newspaper balance sheet was online ad revenues, which increased 10.6% from $730.4 million to $807.9 million, representing 14.5% of total industry advertising revenues. Combined online and print ad revenues decreased 7% to $5.56 billion.
(Source: Media Daily News, 06/01/11)
Daily Sales Tip: Good vs. Great Salespeople
Good salespeople are polished and professional. And just a little slick. They've got a great pitch. They might be very likeable, but they make most prospects just a bit wary.
Great salespeople might be as polished as the Crown Prince of Moravia, if that's who they are, or they might be as folksie as Will Rogers or Abe Lincoln. They might be a disorganized sloppy mess and not particularly articulate, though they're always likeable, very likeable. And somehow they do always say just the right thing. Since they so obviously seems to believe in what they're saying, it doesn't seem to be a pitch. They "just seem to make a lot of sense."
And they're never slick. They're genuine. The longer they talk, the less wary the prospect becomes. When the time comes for the great salesperson to close, buying from him or her is often as natural and as easy as ordering a fine meal at a favorite restaurant.
Great salespeople are aggressive and persistent and non-threatening: Which means they're subtle and likeable enough that few ever perceive them as aggressive and persistent.
If a prospect tells you you're a great salesperson, you aren't. What he's saying is that he feels that he's being "sold" something he would never purchase on his own. He may roll over and buy, but he won't be happy about it. He won't be happy to see you on your next visit, and he's far more likely to develop buyer's remorse and re-contact you the next day.
To me, the highest praise a salesperson can receive from a prospect is simply, "You make a lot of sense." People who say that don't feel sold, and they feel their needs are being met. Of course, they may never have realized they had those needs until you walked in the door. And I guarantee they'll buy more from the salesperson who appears to make sense than from anyone they consider "a great salesperson."
Source: Sales consultant/author Barry Maher