MONROE, Mich. — From La-Z-Boy’s latest earnings call for its fourth quarter and full fiscal year ended April 27, it’s clear that retail development — both new store openings and acquisitions — remains a core part its strategy moving forward.   

Of course, none of this is new given the number of stores the company has in place currently. But it appears to be positioning itself for even further growth in the months and years ahead.  For example, during its latest earnings call, company President and CEO Melinda D. Whittington noted that the brand is looking to have about 400 La-Z-Boy Furniture Galleries over the next several years, up from 355 at the end of its latest fiscal year.

The 355, which is up six locations from the prior year, brings the number of total company owned stores to 187, including the six new store openings and 11 acquisitions during the full year, including the acquisition of a two-store independent network in Florida during the quarter. And in May, she said, the company also signed an agreement to acquire an additional one-store market from an independent dealer in the Midwest that’s set to close in the first quarter of fiscal year 2025.

Bob Lucian, senior vice president and chief financial officer, noted that the company plans to open 12-15 new stores — separate of any acquisitions — mostly in the second half of the year as part of a planned $70 million to $80 million in capital expenditures during the fiscal year, which he noted “includes land and building investments and stores to maintain the growth of our retail network.”

Obviously, the company is bullish on its store network during a time when furniture retail is struggling amid an environment of high interest rates that are hampering existing home sales, combined with consumers tightening their belts with high-dollar purchases.

During the call, Whittington noted that while total written sales for company-owned La-Z-Boy Furniture Galleries were up 1% for the quarter, written same-store sales for the entire network of 355 stores were down 3% for the quarter compared to the prior year and down 2% for the entire year. But she also noted that this performance is still better than the industry overall “against a backdrop of 8% industry contraction” during the quarter and down 6% for the year “as our significant outperformance versus the market persisted throughout the year.”

“Despite ongoing challenging traffic trends, our stores continued to execute very well, with higher conversions, higher ticket and design sales partially mitigating the traffic headwinds,” she noted.

In addition, the company now owns 53% of the stores in the La-Z-Boy Furniture Galleries network for the first time in its history. Of course, some of this has to do with the acquisition of stores from independent dealers looking to get out of the business during this ongoing period of malaise. Perhaps company ownership will improve the performance of these locations as things start to turn around, but that largely depends on support from the economy.

For Whittington, the growth of the store footprint makes sense moving forward.

“We see meaningful opportunity to expand the company-owned portion of the network through new store growth and acquisitions,” she said, adding, “These store acquisitions are immediately accretive to our profitability, allowing the company to benefit from integrated wholesale and retail margins.”

She also noted that growing the company-owned store network is important “as it enables the brand to control the end-to-end consumer experience and leverage the strength of our vertically integrated model.”

Another benefit in the company-owned store approach? It also helps guide product development.

“We continue to shift organizational decision-making to be more consumer-centric while also leveraging a data-driven approach,” Whittington said, adding, “This is enabling us to develop more consumer-relevant, on-trend upholstered furniture, particularly in the motion and reclining categories where we are a market leader.”

Of course, this consumer-driven approach is not just beneficial to the development of upholstery and recliners, but also wood categories such as occasional, along with bedroom and dining furniture offered by its sister brands.

The success of this growth initiative also obviously depends on a number of factors, ranging from interest rates and housing sales to the consumers’ willingness to return to spending more on the home. Yet despite these uncertainties, Whittington was optimistic about the company’s strategy, not just in its retail store footprint, but also how it is serving consumers in the market overall, ranging from the agility of its supply chain to product development initiatives.

“We know there are consumers out there still investing in their home, even in a challenging economy, and we believe we are disproportionately capturing them,” she said. “But if I were to step back and say ‘what is the biggest pivot for us as a total enterprise?’ It’s really this focus on driving our own company-owned retail and the reason for that is two-fold. We can control that brand experience for the consumer end-to-end. We can avail ourselves of the data from that consumer by interacting with them directly, and from a financial standpoint, we can take advantage of that integrated margin of owning the entire chain, from pieces of fabric and steel all the way to putting that product in the consumer’s home. And we believe that’s good for the consumer, and that’s good for our financials as well. So really, I would call continuing to expand our reach of our own retail probably the No. 1 biggest driver.”

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Founded in 2014, Theptex (Thailand) Co., Ltd. specializes in high-quality, 100 percent natural latex sheets products, including mattresses of custom shapes, furniture and more. By using the GOLS certified organically grown latex from Thailand’s natural rubber trees, Theptex is able to produce products that have one of the highest percentages of natural latex in the mattress industry, boosting consumers’ health, one sleep at a time.

With close to 100 employees, Theptex is able to supply products to a wide range of countries, including Thailand, China, India, Korea, Singapore, Malaysia, Taiwan, Laos, Vietnam, Australia, USA, and Europe. Their innovative approach to health-forward mattresses sets them apart from their competitors, using varied approaches to not only aid in peaceful sleep, but to help with various health conditions as well, including orthopedic issues and pressure ulcers.

Their use of pinholes in their mattresses aid in cooling and heating properties naturally, producing a more restful and healthy sleep experience.

“We are thrilled to be welcoming Theptex (Thailand) Co., Ltd. to our international network in an effort to expand our brand’s reach and to experience what the Thailand markets have to offer,” said Nick Bates, president of Spring Air International. “We look forward to many years of watching the company advance in this market while simultaneously advancing our international efforts.”

“With our company’s roots deeply seeded in Thailand’s culture and natural product, Theptex aims to provide a healthy, restful sleep to all consumers, regardless of which mattress they choose. Producing innovative and high-quality products are at the utmost importance to us, and through researching Spring Air’s mattresses, it is clear that their goals align with ours; we were impressed by their efforts on this front,” said Saurabh Gupta, a company director. “As we embark on this journey together, we are committed to achieving our mutual business objectives while creating long-lasting value for our consumers and stakeholders.”

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STARKVILLE,  Miss. — Miskelly Furniture is headed to Northern Mississippi to open its newest store here on Highway 12 early in August.

The store is set for a soft opening in mid-July with a grand opening set for Aug. 1. When opened, this will represent Miskelly’s seventh location, the retailer said.

According to CEO Oscar Miskelly, the retailer will open a 40,000-square-foot facility in what had formerly been a grocery store previously developed by former Houston Astros pitcher Roy Oswalt.

Starkville, also home of the iconic Mississippi State University, also appealed to the retailer, for a host of reasons, Miskelly told Home News Now. “We’ve always been a fan of college towns, and I especially like the young energy these towns bring. Also, Starkville, being a college town, gives us a wonderful opportunity to introduce young people to our brand and gives us a great pool of resources when it comes to hiring,” Miskelly added.

And while a college town has more than its share of upsides, Miskelly said the entire Starkville area is experiencing strong and sustained growth. 

He explained that Japan-based tire titan, Yokohama Tire Manufacturing, made a recent initial $300 million investment in the area, establishing an operational headquarters in the Thad Cochran Research, Technology and Economic Development Park in Starkville that houses several business functions, including administrative, human resources, information management and planning.

Earlier, Steel Dynamics Inc. announced the selection of Columbus, a short drive from Starkville, for the company’s previously announced greenfield state-of-the-art, recycled aluminum flat rolled mill. 

The combination of an energetic and upbeat college town surrounded and supported by a steadily growing economy made the Starkville location too good to pass up, Miskelly said.

“The Starkville location, which will feature 37,000 square feet of selling space, is about two hours from Jackson, and we’re going to deliver out of the Jackson distribution center. We’ll run up there with next-day delivery, and we will be able to service those customers better than they have ever been serviced,” Miskelly said.

While the product assortments will closely mirror those of the existing store (top brands include Ashley, Vintage and International Furniture Direct in case goods; Ashley, Franklin and Homestretch in upholstery; and Tempur-Pedic, Miskelly’s brand, Diamond, and Sealy in bedding), Miskelly said, “We will have some price points and products that will appeal to college students, including mattresses and futons.”

This week, the company has already set up billboards in Starkville announcing the new store and says it will do “lots of promoting” the first two weeks to celebrate its seventh location and is also working on a host of promotions for Labor Day.

“We are confident that Starkville is the right location for the products and price points we offer and will also provide us with top-line growth,” Miskelly said.

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Bed Quarter, a company founded 27 years ago, has a state-of-the-art manufacturing facility in the Sudair Industrial Area, north of Riyadh, Saudi Arabia and operates more than 40 mattress stores in the region. As part of the agreement, it will manufacture and distribute the Eclipse brand in Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Qatar, Oman, Jordan, Syria and Lebanon, and expand into North Africa in partnership with BIA.

“The Bed Quarter executive team is comprised of very experienced mattress producers in the region, some of whom we worked with years ago, so we are excited about what they will be able to do to expand the Eclipse brand in the region,” said Stuart Carlitz, founder of BIA. “They are not only great manufacturers, but also great retailers with a strong direct-to-consumer business. They have a keen understanding of the mattress shopper in the region and can really use that knowledge to help retailers in other countries benefit from flooring Eclipse products in their showrooms.”

“Eclipse is an outstanding brand that embodies the best of American design and manufacturing, something that many customers and retailers in our region are looking for today,” said Abdul Salam Al Mazro of MAZ Holding Group. “We are so happy to add the exciting Eclipse brand, which has more than 100 Years of history and legacy. Its special patented spinal zone technology, approved by COCSA to our existing branded line of bedding retail business, will strengthen our position in the region.”

“I am so happy to be working with Stuart and his team once again, added Arun Sharma, chief executive officer of MAZ Holding Group.. “There is a lot of opportunity for us to grow sales in this area with our Bed Quarter retail stores.”

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HIGH POINT — Canadian upholstery manufacturer Decor-Rest Group has purchased the former Homelegance showroom building at 212 Jacobs Place, setting the stage for the growth with new and existing customers in a facility that is nearly three times the size of its original showroom just next door.

The company closed on the 22,000-square-foot building on May 1 and plans to move in before the fall market cycle, starting with premarket in September.

The building is just next door to its existing showroom building at 208 Jacobs Place, which it plans to keep and either use or possibly rent — but not sell — in the future.

The one-level showroom at 212 Jacobs Place is much larger that Decor-Rest’s 8,000-square-foot, two-story building, where it has shown for more than 30 years. During its  first few years in that space, it rented the building from the Broyhill family, then later purchased the property.

“We loved it so much as we were renting it, and then we had the opportunity to buy it from the Broyhill family,” company President Angelo Marzilli Jr. told Home News Now.  “It’s been home to us for the last 30 years. Our customers know where we are, and we’ve grown very nicely because of it.”

Following its purchase of the SuperStyle and Trendline brands in early 2022, the company’s product line has grown even further, with little additional space to showcase its Canadian-made assortment. Originally, the company planned to expand its existing showroom, but ran into logistical challenges and unforeseen expenses associated with the project.

“It went over budget real fast,” Marzilli said, noting at one point building designers suggested tearing down the building and restarting it from scratch.

While that might have made sense from a design and construction standpoint, the Marzilli family did not wish to pursue that option.

For one, the building has long been a High Point market landmark sporting a sandy-beige exterior with contrasting dark awnings sporting the Decor-Rest name. Dating back to 1930, it also has historical significance as the original headquarters for the High Point, Thomasville and Denton railroad.

“It’s got a story and it’s a beautiful boutique-looking building,” Marzilli said. “I would hate to tear it down just because I needed more space.”

Then the Homelegance building next door came on the market as that company had purchased a larger showroom in the former Zaki Oriental Rugs building at 600 S. Main St.

While not disclosing the purchase price, Marzilli said the building was the showroom solution Decor-Rest was seeking. It provides plenty of space to showcase all three brands, although much of the product sold under the Trendline and SuperStyle brands will be presented as part of expanded collections by Decor-Rest.

“This is a strategic move for us, creating an opportunity to showcase more product and providing a cohesive merchandising plan,” Marzilli said. “We can now bring all our brands together under one roof: Decor-Rest Furniture, SuperStyle and Trendline. Our expanded space will provide the opportunity to display many more product introductions, plus continuing to highlight our bestselling collections.”

After Homelegance showed in its new space on South Main Street for the first time in April, Decor-Rest actually got to use about 3,000 square feet of space in the building during the April market. It also showed some product in Space 510 of Furniture Plaza, where it plans to also have a presence.

“It was a hit,” Marzilli said of the new space next door. “Our customers liked it, and we liked it. It was comfortable, and it felt right. So it was like a test drive. We were so happy with the 3,000 feet that we pursued buying it completely. And that’s what came of fruition on May 1.”

The company is in the process of upfitting its new showroom building, which also has an adjoining parking lot that can provide much-needed parking for dealers, another key feature that made the building an attractive investment.

“This showroom will provide a unique experience for dealers,” Marzilli added, noting that the company even recently repainted its original space and the new space white, to give a consistency to the two buildings, which he described as part of the same campus, effectively creating an expanded footprint without changing other major physical aspects of the two neighboring buildings. “Our visual presentation will be both innovative and educational — showcasing our product and telling the Decor-Rest Furniture story.”

While the company plans to be open for premarket in September, it plans an official ribbon cutting during the October High Point Market at 10 a.m. Friday, Oct. 25. A party that continues the celebration of the new showroom is planned for 5-7 p.m. that evening.

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According to Mitch Hodges, vice president of sales, the new hires are some of the top sales representatives in the industry with decades of experience and strong ties to big-box retailers. The new sales representatives have been added in New England, Colorado, Utah,
Wyoming, Montana, Louisiana and Mississippi. The company is still looking for coverage in Florida and Texas, where its business has been growing exponentially.

“More and more retailers are buying Meridian products because we fill the gap in reaching a new generation of furniture buyers by offering the fashion-forward styles younger customers love—at a fair price,” said Hodges. “Younger consumers see the looks they crave on
TikTok and Instagram, but they can’t find them anywhere. We are leveraging that data in ecommerce to help dealers better understand younger consumer preferences and translating that into styles that help them generate traffic and sales. Our new sales representatives are a terrific asset to the dealers in providing support and training to help them grow their businesses.”

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HIGH POINT — When Natuzzi announced its plans to sell its High Point showroom along with other manufacturing assets in Italy, a key goal was to raise capital necessary to fuel its planned retail expansion here and abroad.

That brand-building theme resounded clearly as part of its fourth-quarter conference call earlier this spring along with how the company has implemented various cost-cutting measures to shore up its bottom line. Top-level management views both as key to helping the company achieve success over the short and long term.

For example, the company reduced its headcount by 514 positions last year alone, bringing the total reductions to 759 since the beginning of 2021, a 17.5% decrease, according to CEO Antonio Achille.

To improve productivity among the remaining workforce, the company said it has conducted more than 100,000 hours of training to enhance skill levels, “aimed at upskilling and reskilling all our employees to meet the digital challenges we anticipate in the new future,” added Mario de Gennaro, chief human resources, organization and legal officer.

The overall reduction in headcount is expected to result in an annual savings of 22.5 million euros, or about $24.4 million, based on current exchange rates.

But the company is investing in other areas of the business, including its retail footprint. For example, Achille noted, that Natuzzi last year allocated a total of 12 million euros to various projects, including 4.6 million euros toward the opening of retail locations, along with 7.2 million euros toward manufacturing improvements.

In the U.S., the company has about 30 stores overall between its upper-priced Natuzzi Italia locations featuring made-in-Italy product and its lower-priced Natuzzi Editions stores. Its newest stores added last year include six Natuzzi Editions branded locations in the U.S. along with one new franchise location, plus seven new galleries.

“In the U.S., our focus remains firmly high,” Achille told analysts. “We consider the U.S. one of our highest priorities and a significant opportunity, given that it’s where the company is listed and where our business model has evolved.”

Whether we are talking about store locations or galleries, including 680 Natuzzi stores around the world, plus some 600 galleries, the goal is to keep the brand in the mind of consumers here and abroad. Thus, the brand appears to be resonating in key markets including the U.S. and China, another key market where the company sells under both the Editions and Natuzzi Italia banners.

Representing about half of the total global store network, or about 346 locations, many of these China stores are in large furniture malls where they compete for the consumers’ attention with other name brands being sold in the marketplace, both domestic and international.

According to Achille, more than 92% of the company’s sales were from branded goods by the end of the third quarter of 2023, including the Natuzzi Italia and Editions lines, up from 85% in early 2021. The branding initiative achieved through both stores and galleries also has helped achieve a higher ticket. For example, Achille noted that in the past, Natuzzi products were sold at an average price of $395 in the U.S. Today, he noted, the average ticket for higher-end, made-in-Italy Natuzzi Italia products is in the range of $9,000.

“This significant increase demonstrates the significant efforts required to establish and justify the brand’s premium positioning,” Achille said, adding, “This marks a significant shift, particularly for increasing the awareness of the Natuzzi brand, where as we were (previously) predominantly in the value segment.”

In addition to helping boost the brand in key markets, the stores and galleries also provide real-time data and insight into what’s happening in each market, which can be used to help guide the business, including product development efforts.

“Historically, each store was merely an account number, lacking comprehensive insights into its operations,” Achille noted. “Now we possess real-time and detailed understanding of store activities, including store traffic, conversion rates and product preferences. This capacity is invaluable for our transformation into a consumer-centric company.”

The company offered scant details on what the store footprint will look like in North America moving forward. But in answer to a question from analyst Dave Kanen of Kanen Wealth Management, Achille noted that the sale of various “nonstrategic” assets including the High Point showroom and a tannery in north Italy, will help fuel its retail growth in this part of the world.

“The board has agreed that, in line with our long-term strategy, the primary focus for potential divestments will be reinvesting in North America retail operations,” Achille said. “Additionally, supporting our long-term transformation initiatives will be another key priority. In our view, the path to creating value for our shareholders is crystal clear. … Our value creation strategy revolves around two key pillars: expanding our retail presence, particularly in North America, and streamlining the cost structure of our Italian factories. Therefore, if there are additional funds available, our sole focus will be reallocating them toward these initiatives.”

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CHINO, Calif. — When industry veteran Bruce Birnbach took on the role of chief strategy officer of Omnia Leather earlier this year, he saw an opportunity to join a company he described as a diamond in the rough, with good people, quality products and an intense focus on the needs of its customers.

But he also saw an opportunity to further refine and simplify the line in a way that created efficiencies for its customers and the manufacturing capabilities of its 200,000-square-foot plant here that employs some 250 workers.

“What’s made the company so amazing over time is that they have done anything their customers have asked them to do, and that’s why they are loved by their customers,” he told Home News Now. “But because of that, it has forced us to grow in all sorts of different directions. … So we added this or we added that and there’s a plethora of SKUs that exist that don’t necessarily need to exist.”

Thus, Birnbach’s role is to help the company regain a focus that has resulted in a refinement and simplification of the brand “so we can again be better at everything we do.”

When he came to the company in mid-January, he brought with him nearly 45 years of industry experience that dates back to his first job as vice president of merchandising and marketing at Rowe Furniture, where he worked for just over 25 years, including as president for nearly half of that period. He then went to American Leather as president in 2006, a role he held for six years before becoming president and later chief executive officer of American Leather Holdings.

His first task when he joined Omnia Leather was to listen and learn about the company, which he described as having “all the bones that remind me honestly of when I got to American Leather 15 years ago. They just maybe aren’t telling their story the way they should. And I think if they just simplify and refine, there is a great opportunity for the company to spread its wings so to speak. The opportunity presented to them will be amazing.”

Birnbach’s next task was to help the company achieve this vision, which buyers caught a glimpse of this past April High Point Market. He said the changes ranged from a simplified SKU identity and a simplified price list to more simplified schematics and more refined photography.

“It was greeted with overwhelming enthusiasm,” he said, noting that all the new materials will be available for dealers starting July 1. “Simpler is better for so many reasons.”

None of this changes the overall identity or quality of the upper-middle-priced, made-to-order line, roughly 60% of which is stationary and 40% motion, with 85% in leather compared with 15% in fabric.

“They make a great quality product and use the European upholstery method — not everyone does that,” Birnbach said. “Which means you get a really nice look to the product, very similar to where I came from in the past.”

In addition to the various refinements that have been made thus far, he said that the company will continue to improve its designs and its speed to market, while also doing a better job telling its story, which is part of his role at the company.

“I think we need to present a little more perspective of who we are, and that is one of the things I am helping them define, in addition to helping them build an organization that will be sustainable for the future.”

With its special-order capability that can produce in any configuration possible, Birnbach believes the brand continues to offer tremendous value to retailers and designers alike. But with some 95% of its sales to brick-and-mortar dealers, a key is to make the line easy for retailers to understand and purchase. That also means making things easier from a manufacturing standpoint to help improve its speed to market.

“The opportunity for us is to get faster, get leaner and more focused and be better at everything we do,” Birnbach said. “I think manufacturing will be efficient just because the line will narrow down. We will be doing more of what we do, but the goal is to be better for the customer and have more clarity of offerings and what the brand stands for. We have tried to simplify the line to try and make it the easiest to work at retail. I think we have accomplished that and are laying the foundation for us to continue to grow on top of that.”

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The second condition is knowing when to enhance, tweak or even change a product to keep it in the passing lane of retail’s fast track.

After reporting on the home furnishings sector for decades, I’ve concluded that, for good reason, suppliers fail often when trying to meet that second condition.

When a supplier opts to redesign, tweak or reimagine an existing product, it may often involve switching suppliers, raw materials, production procedures, channels of distribution and more.

Which is why good enough is good enough for some suppliers.

Then, there are guys like Joe Savovic, president and CEO of Soundstage USA LLC. 

As long as I have known Savovic — and it has been a very long time — Joe embodied the tenet of Kaizen manufacturing (aka continuous improvement) long before the term became a buzzword in our sector.

A few markets ago, Savovic introduced an innovative line of furniture that incorporated a very sophisticated sound system. 

If you missed the original story, you can read it here.

Despite a strong response to the line, in speaking with Savovic last week, he told me he had an aha moment and realized that, “Initially, shoppers are coming into a furniture store to shop for furniture, not necessarily an amazing audio experience.”

As a supplier focused on quality product at value pricing, Savovic said, ““Our job is to give the customer something they think they can’t buy for the money they are prepared to spend.”

Now, along with two other industry veterans, Howard and Michael Slavin, Savovic has reworked the line and is putting the finishing touches on new groupings of stationary furniture made in Vietnam that still feature his high-definition audio components, but at sharper price points.

“I’ve always said the greatest inventions or innovations of our lifetime are things that we didn’t know existed or that we wanted,” Savovic told me, adding, “So, for me, that meant changing my story from here’s incredible high-definition hidden in furniture to here’s a great- looking living room set at a great value. And it also offers high-definition sound with a host of incredible connectivity.”

Specifically, Savovic said users can make a hands-free phone call from this furniture. They can listen to music, watch a movie on their TV, listen to audiobooks and much more.

With that in mind, Savovic will debut a new lineup of sharply priced stationary furniture, including a 90-inch sofa featuring four speakers and two subwoofers and Soundstage third-generation audio that can retail for $999. 

“Larger sofa chaise units and sectionals, also featuring the high-definition audio components, will be set to retail at $1,899, and that is huge, because before this, just about anything in our line retailed at $2,999 or more,” Savovic explained.

All told, Soundstage USA is planning to show some 20 new groupings in his showroom at the October market.

However, buyers can get an earlier first look at the new line as the company says it will debut four new lines at the RTOWorld 2024 rent-to-own show put on by APRO and the TRIB Group this August in Orlando, Florida. 

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Located in the Stanford Shopping Center at 180 El Camino Real, the three-story structure has 60,000 square feet of space showcasing a wide mix of luxury furniture, accessories, lighting, textiles and other home décor.

Its layout has space dedicated to RH Interiors, Modern and Outdoor and also features in-house interior design services through its RH Interior Design Studio. The design studio has a team of interior designers that are on hand to work with clients on various projects.

It also has a Rooftop Restaurant and wine and barista bar that look out onto a landscaped garden area.

Other neighboring luxury retailers in the Stanford Shopping Center include Neiman Marcus, Hermes, Louis Vuitton and Cartier.

A ribbon-cutting ceremony is scheduled for 11 a.m.

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