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FUTON LIFE
WINTER 1995
VOL 7 NO 4
Inside Futon Life This Month:
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In Memorium: Harvey Leichter,
Harlee International Founder,
Passes Away at 71
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Cover
Story
Retailing In Europe:
Are We Missing the Boat Here in the U.S.A.?
By Dale Read with Carlo
Merli
As would be expected,
nearly everything about selling futons and frames in Europe
is slightly different from the evolving futon market in the
U.S. The favored products are somewhat different. The reasons
for buying a futon are also somewhat different. Overall there
is a slightly higher average price paid for futon products.
Not surprisingly, even the customers shop somewhat differently
than do most American customers.
During a recent interview
with Carlo Merli of New Orleans based Futonia®, who does
a significant amount of business in Europe, we learned that
business is a little different on the other side of the Atlantic.
While discussing price and product, Merli informed FL that
the majority of Europeans buy futons as beds rather than convertible
sofas. So, while in the U.S. a great deal of marketing effort
and product development have gone into selling the futon as
a flexible piece of furniture that serves as a couch in the
den, TV room, even perhaps, the living room, Europeans still
see futons as primarily comfortable, environmentally safe
bedding.
According to Merli, the
best selling futon in European retail stores is an all cotton,
six to eight inch thick, 150 cm x 200 cm (queen size) futon.
Futons that have a natural latex and/or coconut-fiber core
are very popular. Merli noted that he has never seen a polyurethane
foam core futon being offered in European stores.
It seems that the average
price for an "inexpensive" futon and frame ranges
from $550 to $700. No back-to-school $149 mass merchandising
specials in Paris or Cologne. For $500 to $700, the European
customer is buying a 135 cm x 190 cm (full size) all-cotton
futon, and a tri-fold slatted frame made out of wood such
as ramin, fir, or pine. Remembering that the majority of Europeans
are buying futons as permanent bedding, it comes as little
surprise to find that the most popular selling price for a
full size, all cotton futon with a simple hardwood bed frame
in fir, maple or ramin, or a tatami wooden base is between
$700 and $900. It should be noted that the above quoted price
ranges include European Value Added Tax (VAT), which ranges
from 16% to 20% depending upon the country.
It appears, on the surface,
that Europeans are willing to pay higher prices for goods
that usually sell cheaper in the U. S.. Are they used to paying
more; or, is it that they are used to buying higher-end products?
If so, why? What is the difference? Merli tells FL that the
answer isn't simple but is rather a complex set of differences
and subtleties.
One factor may be that
the European market as a whole does not yet sell as many "lower
end" products the way the U. S. market does today. One
reason for this may be that, while in the U. S., people tend
to move every five to eight years, this is not the case in
Europe. There are not nearly as many transitional or temporary
living situations in Europe. As Merli states, "Europeans
are less geographically mobile than most Americans, and they
seldom change their residence. To Europeans, their homes as
well as their furniture are considered to be lifetime assets
that will be passed on to future generations." From that
perspective, it is easy to understand why European customers
would focus on higher end, more valuable furniture.
Another factor may be
the way Europeans furnish and decorate their homes. Europeans
not only look upon each piece as being a potential heirloom,
but they also have a very rich and diverse history of style
and culture to draw upon.
Many Europeans prize the
individual piece rather than the matching look of the room.
They are freer than Americans to be eclectic. Not being as
subjected to American marketing pressure to buy matching sets,
Europeans have less of a tendency to purchase bedroom or living
room "sets" with bed frame, night tables, dressers,
armoires, etc., all in the same style. As Merli says, "When
quality and design are outstanding, Europeans often prefer
to match an ultra-modern tatami bed frame, for instance, with
an antique. So if one is not going to buy the whole set, he
may feel that he or she has more money with which to buy the
'higher end' futon and frame."
There is also a built-in
price factor. The components of a futon and frame are more
expensive in Europe. Cotton, wood, fabrics, even the cost
of transportation, are more expensive in Europe than in the
U.S.; therefore, costs may just be higher.
Then, of course, there
is the customer him/herself. At the present time it seems
that the average European futon furniture customer is an educated,
well-to-do person. Given his/her relative affluence, this
buyer may be inclined to feel that quality and good design
are essential to his/her purchase. Merli describes the average
buyer as a young (25 to 45 years old), well-educated professional
who travels extensively, has a vacation home somewhere, and
is concerned about having a healthy, stylish and environmentally
friendly lifestyle. He or she usually buys with cash or check,
as credit cards only represent 25% of sales, and has no problem
waiting a month or two if necessary to get the product. Imagine
that from an American customer? Even more interesting, the
European customer is not in the habit of returning or exchanging
what he or she has purchased. If treated well, this consumer
can become a faithful lifetime customer for the retailer carrying
the right goods.
As noted, Europeans are
very environmentally conscious. The entire idea of "green"
packaging is way ahead of the U.S. Europe has less land and
fewer resources than the U.S. So, of course, the all-natural
aspect of all-cotton futons plays a role in marketing futons
to consumers.
So what is the "hot
style" in Europe today? Germany appears to be the largest
futon market in Europe today. Merli states that the hottest
selling product in Germany is a contemporary styled futon
platform (full to king size) that may use tatami or hardwood
slats. This base is surrounded by a six to twelve inch wide
hardwood board with or without modular, removable night tables.
These tables can usually be placed in any position around
the wooden board. The futon itself is approximately eight
inches thick with latex or coconut fiber layers between cotton
batting. A fancy futon cover, or a nicely covered down duvet
completes the set.
Focusing on the futon
itself, FL was curious to know what the European futon industry
thinks of the U. S. futon industry. Merli believes that after
a few years of initial curiosity, the average European futon
industrialist does not necessarily have a high opinion of
his American counterpart (So what's new here?). Some of them
may import cotton batting when the rate of exchange with the
U. S. dollar makes it convenient. However, on the whole, very
few Europeans import from the U.S. It seems that Brazil, China
and Southeast Asia have been better import markets for European
manufacturers and
marketers.
Is this an opportunity
for smart, sensitive and enterprising American businessmen?
It certainly does raises the question. One thing appears to
be sure, the majority of European futon industrialists see
the U. S. futon industry as a group of manufacturers primarily
interested in designing and marketing products targeted specifically
to the U.S. market.
When asked to cite the
names of some leading futon manufacturers in Europe, several
names came up. One was Nippon, located Denmark, and another
is a company called Softline in northern Italy. Of course,
Merli made FL aware of the fact that Futonia is not only one
of the leading retailers in Italy and Spain, but is also one
of the largest tatami importers and futon and cover manufacturers
in Germany.
The American futon furniture
industry needs to take a closer look at the present conditions
in Europe. By focusing on price only and not on quality and
value they may be shortening their margins as well as their
life span. Only if the industry looks at itself as a seller
of home furnishings and not just boards in a box will survival
and prosperity abound. &emdash; Editor.
Publisher's
Forum
Past, Present and Future-
Some Things to Know and Some Things to Fix
Survey 1996
It has been three years
since we've done a retailers survey. During this time the
industry has gone through some major changes. For one, we
have grown. Some manufacturers are talking growth factors
from 25% to 40% per year. A majority of the retailers who
responded to the last survey (sales under $1 million), on
the other hand, have been facing increased competition from
mass merchants, traditional furniture stores and flotation
specialists who have broadened their bases to include innerspring
and futon mattress related products. Another area of change
has been the level of acceptance of futon related products
throughout the home furnishings industry-at-large. Much more
ink has been seen, related to futon furniture, in both of
the industry's major trade publications. Some very large mainstream
independents, like Art Van and Jordans, have embraced the
futon concept, with many other independent chains taking a
shot at it too. Image still seems to be our biggest problem.
Many retailers and industry manufacturers still see futon
furniture as promotional only. Promotionally priced product
is still a big part of our segment as well as of the furniture
industry on the whole. Companies like Rosalco, Fashion Bed
Group and IBC/Sherwood (all of whom have dedicated futon programs)
operate outside the core of the futon industry because of
this perception of low quality and lower (sometimes bottomless)
prices.
The main purpose of this
1996 survey is to categorically define exactly where we are
as an industry and product category. With these numbers in
place we can analyze our current position and then use this
information to better plan how to get where we want to be
in the future. As a concerned retailer I urge you to fill
out the survey and send it to us today. It should take all
of ten minutes and if you want to get a better picture of
what the future holds then it will be ten minutes well spent.
Setting the Record Straight
In our continuing effort
to provide the best and most accurate information to the home
furnishings industry about the futon furniture industry we
invariably hit a snag now and then. In our last issue's Futon
Primer for futon mattresses we apparently hit a raw nerve
with some inaccuracies in the polyester part of the primer.
I received three very nice letters from companies that deal
with polyester batting on regular basis. Each one informed
us of several rather profound errors in the primer. To address
these issues I submit the following information from a letter
written by E. J. Blaeser, R&D Manager, Recycled Products
at the fibers division of Wellman, Inc., in Charlotte, NC,
in response to the following statements made in last issue's
primer.
1. "Polyester adds
loft to a new product but because of the nature of this synthetic
fiber, much of this loft may soon disappear. This happens
as the fiber's memory is changed by body heat.
Polyester heat history
(or "memory") is inherently much higher than typical
body temperatures (98.6° to 104°F). For this reason
polyester will retain loft infinitely longer than cotton.
Of course any under-constructed futon will lose loft more
quickly."
2. "Polyester does
not breath and therefore tends to break down from absorbing
body heat and moisture.
Cotton is hydrophilic.
In a futon end use cotton's ability to absorb and hold liquids
should be considered to be undesirable. The presence of moisture
can cause the structure to lose loft and ultimately leads
to bacterial growth. Polyester is both naturally hydrophobic
and has a heat history much higher than typical body temperatures
and, thereof, is infinitely more stable than cotton in the
presence of body heat and moisture."
3. "...Cotton performs
much better than synthetics do in open flame testing.
For end uses where FR
performance is desirable polyester can be engineered with
a wide variety FR inherent chemistries. An FR inherent polyester
easily out performs cotton in open flame or any other type
of flammability test. Further, the government requires all
children's sleepwear be constructed of polyester not cotton
due to the likelihood of flame spread on cotton."
On issue one we stand
corrected. On issue two we still contend that polyester doesn't
breath like a natural fiber, admittedly we stand corrected
on the absorbtion issue. On number three we have always understood
the connection between flame retardency and polyester. The
issue we were raising was one of an open flame scenario not
one of flame retardency, where polyester shines as a retardant.
There is still some evidence that burning polyester, in an
open flame, is more dangerous, from the toxicity viewpoint,
than burning cotton. All things being equal I was delighted
with this response to the primer. Even though it was a response
to some errors, from the readers point of view, it was a response
none the less. We will be taking a closer look at the aforementioned
issues in a later publication but for now all I can say is
thanks, and keep those cards and letters comin in.
In
Memorium
Harvey Leichter, Harlee
International Founder, Passes Away at 71
Harlee International has
regretfully announced that their founder and president emeritus,
Harvey Leichter, passed away in July at the age of 71 after
a long illness.
Harvey was easily one
of the most experienced business owners in the furniture industry,
with almost forty-five years devoted to the trade. Starting
as a retail sales associate for a furniture and appliance
store, he soon found himself moving into the wholesale and
manufacturing side of the business, which he preferred. He
joined a home furnishings manufacturing firm in the mid 1950's
and worked his way up to vice president. During the following
years Harvey became an expert at finding and developing sources
in the Far East, making his first trip to Asia in 1959.
He started Harlee International
in 1981. His company has specialized in high quality sleep-related
products, gaining a high level of respect and success in both
the flotation and futon furniture industries. Harvey retired
in 1994 leaving the company under the guidance and direction
of his son, Steven Leichter, who is now President, and Jim
Woll, who is now General Manager.
© 1997
Futon Life. All rights reserved. No part of this document
may be reprinted, photocopied, or duplicated without the express
written permission of the author.
Futon Life
1-401-351-0787
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