COVER STORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . by Joe Tatulli

The Futon Association International Has Weathered the Storms - What’s Next For The Industry’s Trade Group
An Interview With FAI President Tom Tedesco

In our almost fourteen years of continuous coverage of the futon furniture industry we have never interviewed anyone from the association that represents this category, the Futon Association International. In the past few years many changes have occurred in our industry-at-large, and this is true at the association level as well. For those of us who have watched this category mature and go through both the growing pains associated with market penetration and industry acceptance and then the inevitable shake out process and distillation that occurs after real competition separates the men from the boys, many people are asking themselves, “Where is the futon category going next?”

The Futon Association International (FAI) has been around since 1985 and has seen it all. From the early days of hand made mattresses and frames, through the “green” years and prominence of pioneers like From The Source, Tilt Chair, and Casual Lifestyles, to today’s more corporate environment and companies that will define the future like Gold Bond, Wolf, August Lotz, United Sleep Products, and others, some of whom produce large quantities of futon products, but who do not and will not associate themselves with any organized efforts to promote the category. Through it all the Association has tried to keep it together and present a unified front and the power of that unity to address issues like flammability, consumer product awareness, members issues like credit and freight rates, and our industry’s crown jewel event the Futon Expo and Specialty Sleep Show, which takes place this year in Chicago in March.

During a conversation with current FAI President, Tom Tedesco we spoke about the past, present and future of both the Association itself and the industry it represents. Here is a summary of my questions and Mr. Tedesco’s responses.

FL: What was the futon category like when you arrived on the board as opposed to what you see today?

TT/FAI: I viewed the Association and the board sitting back as a member manufacturer. I wrote a lot of letters to then President Bob Naboicheck and later to David Buechner about things like, “Why are we going to this town or that town?,” or “Why this particular time of year?,” things like that. General concerns most members have. When I got elected to the Board it was much more dynamic than I had ever anticipated.

The first meeting I attended was a budget meeting, and I could sense things were changing. Let me put it like this: the Association as a whole and the futon furniture industry too was coming out of a period of unprecedented growth. It was almost like you couldn’t make a mistake because the growth was taking place no matter what anyone did. I think we are still growing but that time of our history was unique.

It seemed as we matured we didn’t see that grass roots level of participation or communication among members any more. I am not sure of exactly what the dynamic was but I don’t get as many letters with suggestions from members these days. It seems that we have gotten a little stiff. Not as much of that feeling of family. We went from Lee® jeans to Polo® jeans.

The best analogy I can come up with is the family. When the kids are small everybody gets together for soccer and Little League. The family is young and it’s all exciting with the kids and parents spending time together around a common bond. But as the kids grow up the communication changes and that closeness is just not the same. I am not saying any of this is bad, its just part of the maturing process.

(Editor’s Note: Tedesco also mentioned the maturing process and competitive inter-industry rivalries and the general process of growing up as companies and individuals reaching a level of business savvy that may have ruled out some of the interaction and camaraderie of the past. It should also be pointed out that several well known industry pioneers closed their doors or went out of business about this same time.)

FL: What can you and the Association do to turn the tide, if anything?

TT/FAI: The answer is simple. We have to open the lines of communication. To keep the momentum we have and to increase it for the future we need participation from as many people as possible across the board.

Right now, with the economic downturn (what some are calling a recession) and despite the 9-11 tragedy, our category is doing well and maybe that will open people up to getting more involved.

Here is a great example. I try to shake as many hands as possible at the show. The request I make of member retailers is to send me the names and addresses of the two or three newspapers in their town. I tell them FAI will send a professional media kit to their paper about futon furniture. These retailers advertise in the papers, it should be easy enough to get me the information so FAI can send the kit. To date I have not gotten a single retailer to respond.

Participation by members has to improve for the category to see a benefit.

FL: What would you say have been the major events of the past four years in relation to the Association and the influence FAI has upon the category as a whole?

TT/FAI: The biggest issue of the past few years was the Association’s response to the recall. In a matter of 48 hours all 150 manufacturer members were alerted to the issue and given the tools they would need to make sure they were in compliance to all pertinent federal laws.

Personally, I am convinced that because we were ready to deal with this and acted prudently in response to a difficult situation we ended up in a positive rather than a negative position.

Another major move was the institution of an internet web site where consumers could find FAI member retailers on-line. Steve Ray was the father of this benefit and our recently upgraded web site continues to provide consumers with access to FAI retailer’s street addresses, phone numbers, web sites and e-mail contact information where that is supplied.

FL: Another thing that has happened is the evolution of the FAI/SSA relationship. What is the current status of the partnership?

TT/FAI: This partnership was already in play when I came on board, and overall it has been a positive move. I have always been in favor of some kind of combination of efforts due to the fact that we share so many retailers. I have always said that there was a huge duplication of effort that could be eliminated by combining the shows.

Eight years ago, in a letter I sent to the FAI board, I encouraged a merger of some kind for these very reasons. But due to control issues and the nature of the situation at that time nothing ever happened. After having been on the board for a while now I understand even more why this partnership is a valuable one. You can’t just go to a major convention center and tell them you want 65,000 feet and guarantee only 300 hotel rooms. They just won’t take you seriously. They say we have a 100,000 foot room and a 200,000 foot room. Which one do you want?

SSA participation, and the additional numbers of buyers and sellers they bring to the table, helps us get into the kind of convention centers we need to be in. Another fact is that the migration of futon products on to specialty sleep retailer’s floors has been greater than specialty sleep product migration into futon stores. Everyone involved at this time is happy with the arrangement and we are already looking at continuing with them again in Vegas next year (2003).

FL: There has been some concern from some members that the Association has not been as attentive to some members as to others. How is the Board going to respond to this concern?

TT/FAI: Yes, we are aware of this. The tough thing is with 400 members, and all those different concerns, it is tough to keep everyone content. The answer to this issue is for members to break into the linear format the Board is focused on and make their concerns known via personal input.

We watch other trade associations and how they are operating, what benefits they are delivering to their members. But it is still hard for us to get out of the box without member input. The other side of the coin is that sometimes we are right.

The best example is the show coming up in March, in Chicago. Last year people were saying, “What is this show in Chicago? What is this all about? We told you we wanted the show to be in this town or that town. You’re not listening to us.”

Well now when you look at the economic climate, the 9-11 situation with travel and all, it looks like the Chicago show is going to be one of the biggest and best shows we have ever had. We are ahead of sales on booths. We have the highest dollar sponsor contribution ever. Drive in traffic, the main reason we went to Chicago in the first place, should be great. And last year people were ready to take my head off because we picked Chicago.

What people don’t realize is that we are low man on the totem pole. We are competing for space and dates with shows like COMDEX. COMDEX takes one million square feet and brings in 35,000 people who stay in hotels and eat in restaurants. We take a hundred thousand square feet and bring in 800 to 1200 people. Guess who gets the better deal?

This time around we polled the manufacturers. They spend the most money on this event. We had a 100%, unanimous approval for this year’s location.

Joe, I made it a personal challenge to call every member at least once and to date four years later I’ve called about 379 members personally. Actually, when I first came on the borad I decided to call every member, about four hundred or so, in my first year. It wasn’t as easy as I’d thought. The first year I called about one hundred and eighty members. The response I got from most was, “Fine, everything is fine.” I did get some valid concerns and we have addressed those concerns to the best of our ability. I am a very approachable guy. I’m not a big guy and I’m not a bad guy. I am a guy who is trying to do the job right now. If you give me an issue I will work on it and so will the board.

(Editor’s Note: Tedesco spoke again to the communication issue, recommending that members be more aggressive about thier input and participation. He said that members need to look to the board to get things done, but that the seven board members and staff are at a distinct disadvantage without member input, suggestions, and personal time spent working with the Association to get things they want done done.)

FL: Where do you see the futon furniture industry heading in the next few years, both at the industry and association levels?

TT/FAI: As far as the industry goes I have some very good news to report. Quality is up across the board, both in the world of imports, mattresses, everything. It seems to have taken a quality step up across the board. Your publication has always preached quality and I think more people are understanding that this is the only way to long term success at any level. Volume wise our category is actually up over other segments in the home furnishings market. As reported in your publication which recently published some very positive numbers, and the Furniture Today report that said the futon and home office sectors were the only two groups that had not dropped in volume.

This shows how versatile our product actually is and how well it does in both an up and down market.

FL: How, in your opinion, can the industry gain market share in the trade and with consumers?

TT/FAI: Hold the quality across the board. Go all out with PR. We will send a complete package to any publication or broadcast facility in any member’s town or city that tells a very compelling futon furniture story. We are still getting millions of hits from the PR program which we have taken under the Association’s wing. Advertise, advertise, advertise. Use the POP supplied by your manufacturers. A lot of time and money went into those tools, and retailers need to use it. You need to be proud of what you are selling. Where else can you go shopping for a sofa and pick the level of comfort you want? That’s versatility and value.

FL: What is the Association doing to get members involved with these efforts?

TT/FAI: One more time I will have to say members need to communicate with us more often and let us know what is happening out there.

On the other hand we are doing several things right now. The show for one thing, is a way to get the best product and product awareness to more retailers. The more people that see this level of product the better we look.

The other thing we are doing is the Visions Meeting. Last year we had our first ever Visions Meeting for the Board only. We made a lot of changes at that time. We installed a new Executive Director, and put a five year business plan on the table. Past boards had their agendas, and executed them excellently. This was my agenda, to make the Association run more like a business. Maybe that is why we have lost some of the family feeling of the past, I don’t know, but with the amounts of money we have to handle, the size of the show, etc. We are the repesentatives of the members and we have to take this seriously.

This year’s Visions Meeting will be open to all members. It will take place in Orlando about a month before the show in February, the 22nd, 23rd and 24th. Every member is welcome to participate and make a difference.

I am in the futon business. If the basket breaks all my eggs are broken. Most of our members are in the same situation. They need to come down to Orlando or be involved in some serious way with their ideas and opinions. We can then take this pool of recommendations and formulate a plan and announce that plan in March at the show. I hope the members take it seriously and make the effort for the sake of the Association and the future of the industry.

FL: The Association has recently launched a new web site. Where does that project stand?

TT/FAI: The site is up and running and we are very happy. It is clean and professionally done, and it gives us the kind of tool we need to get the information we have into the hands of everyone who needs it. Consumers can find a member retailer in their area. Member retailers can find suppliers and vice versa. Even the print media can find the things they need like our great photography, and even information on the products we all sell from your publication on the futonlife.com web site. We will soon be adding more information like our bylaws, and updates from the Expo and Visions Meeting. All in all, and I can say this to everyone, this is one project that has been a pleasure to work on, and one about which I have not gotten a single complaint from anyone.

As our conversation wound down Tedesco spoke very favorably about his fellow board members and the other supporters who work diligently to make it all happen. He praised long time members like Joe Hammer, Bob Naboicheck, Tony Wolf, Mark Shlichter, Steve Leichter (who still handles the Association’s legal matters pro bono), Dave Beuchner, past president Steve Ray, yours truly and others who have come forward over the years with honest opinions, accolades, and even timely criticisms adding to the betterment of the Association and the industry-at-large.

“This is a good Association, good people, good companies,” said Tedesco. “It’s not often that you see an association of manufacturers and retailers have this long a run and be this successful. If I can see one thing happen before my term is up it will be the return to a sense of family among more of the members. I would love to see the show in Chicago be like the great time we had at the Harley Davidson Cafe in Vegas last year. I hope we can have that kind of fun and excitement right on the show floor. Maybe we’ve gotten a little too much starch in our shirt.

If we look at this product and steer it in the right direction we can all be doing this for a lot more years. People have to be willing to trust this Association with that 150 to 350 bucks every year so we can help keep the ball rolling, and keep this industry in the limelight for another eighteen years.”

FL

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