2003 Retailers Survey — Introduction

The last time FL published a comprehensive retailers survey it was the fall of 2001. That survey was completed during the summer of 2001 (two years ago) and published in October following the events of 9/11. We then experienced an economic downturn across the board, which we may just be coming out of now. The Dow and NASDAQ recently reached levels they have not enjoyed in some cases since that time. With everything else in the hopper we can only hope that a growing economy, increases in new housing starts, and the upcoming election year will allow hard working consumers to see their wealth increase, along with their buying power.

Surveys, being what they are, attempt to quantify a current reality, and any analysis of the results, as proposed by the author, may be subject to criticism from an expert with a different perspective on what the data reveals. Our surveys, currently the only ones published for the futon sofa sleeper industry, have attempted to determine the overall size of the category, as well as offer some scientific data for use by the inquiring minds in the industry and also for those contemplating joining it. Our results have included demographics and other key facts that allow these companies to make wiser and more informed choices for their business’s strategic plans for the future.

The Futon Association International has recently contracted with the Slade’s Ferry Bank Center for Business Research, affiliated with the Charlton College of Business at the University of Massachusetts Dartmouth to produce a first ever, scientific research project for the membership. Nora Ganim Barnes, Ph.D. is the Chancellor Professor at the college and Director of the Center. She, her staff, and her students will be taking on the challenge of delivering to the Association and its members a detailed analysis of their findings late this year or in the first quarter of 2004. Due to this effort and the nature of the key pieces of information it should reveal we think it is prudent to let this (FAI) benchmark study define how big we are as an industry as compared to other categories we compete against for marketshare and other key issues. I am also convinced, after meeting with Professor Barnes and seeing her program’s long list of clients and success stories, that this single project alone is well worth the price of membership in the Association.

2003 Retailers Survey—Analysis

FL has done about twelve different surveys over the past fifteen years. Most of this information is archived on our web site at: www.futonlife.com/retailers/survey/index.php3. We have always been careful to preface our analysis with the disclaimer, that since most privately held companies are reluctant to reveal sales figures and unit volumes, we are left with "the best educated guess," philosophy as a means to achieve an acceptable level of accuracy (±6%) in the numbers we publish.

This year’s survey, which asked questions very similar to the last two retail surveys we have done, came back with a very different mix of companies than the 2001 survey. In 2001 about 28% of the sample were futon specialists. This year a much larger percentage (47%) of the respondents were futon sofa sleeper specialists, and 77% of all respondents were specialty stores of one kind or another, a 12% increase from two years ago. Another aspect to note regarding this year’s group of respondents is the fact that no single company or individual store (for chains) had total sales of over five million dollars, and over 94% had sales of less than two million. This means that our sample (this year) represents smaller retailers across the board. Of the one hundred and thirty seven respondents ninety-four mailed in their survey, and forty-three were called at random for their response.

The best news we can report is an increase across the board in average price points for a futon sofa sleeper ensemble. In 1998 the average price point for a full size futon sofa bed with mattress and cover was $440.00. In 2001 it went down a bit to $410.53. This year it shot up to an all time high of $452.85 for the entire sample. Futon specialty stores moved from $453.00 in 2001 to $457.24 (a 1% increase); all specialty stores went from $364.64 in 2001 to $440.70 this year (a 21% increase); and full line stores jumped almost 28% from $384.44 in 2001 to $489.31 today. This is a significant figure when you consider that the most recent F/T consumer buying trends survey (V27N25, 2.24.03) said that the mean average a consumer is willing to pay for a "futon" (see side bar on pg. 21) was $200. They all seem to have found a way to upscale this versatile product into the $500.00 price range.

The remainder of the results offers no real surprises by falling almost point by point into the same brackets as our last two studies. Eighty-three percent of all futon sofa sleeper buyers are 45 years old or less, and eighty percent are women.

Full size, all (solid) wood bi-fold frames dominate the market with over eighty percent of all sales, and the guest/den/TV room once again remains the room of choice with 67% of shoppers. Kids rooms remain a puzzlingly low 5% of the market. Either parents don’t see the futon sofa sleeper as an option or the dealers aren’t really finding out where customers are putting these frames.

IFAM Vegas Show to Debut in February

Bentley International Group, the long-standing Trade Show and Association Management company headquartered in Las Vegas is set to launch their annual “To-The-Trade” furniture and accessories event.

The International Furniture & Accessories Marketplace will be held in Las Vegas, at the Las Vegas Convention Center, February 4–6, 2004. IFAM is a worldwide event created to serve the Furniture & Accessory Retailers, Wholesalers and Interior Designers and Decorators across the entire spectrum of the industry as well as hospitality, contract buyers etc.

Show organizers are recommending that any company looking to participate should contact them immediately as floor space is limited. Call 800-859-9247, or visit them online at:

www.internationalfurnitureexpo.com

Mayor Laffey Update— CNN Covers Laffey Cam

Cranston, RI Mayor Steve Laffey and the Laffey Cam gains national coverage on CNN’s American Morning as predicted here in Futon Life. This certainly confirms the genius status of Futon Life Publisher, Joe Tatulli.

For those of you who read the pages of Futon Life cover to cover (maybe three or four of you) there was a story in the last issue about my friend, Cranston, RI Mayor Steve Laffey.

We predicted national coverage and we hit the nail on the head. The CNN American Morning interview was the first of many (we hope) national opportunities Steve will get to tell his story of true statesmanship and the advent of real change in municipal government both here (in Rhode Island) and beyond.

Steve was interviewed by co-anchor Bill Hemmer on CNN's American Morning. The interview lasted four and a half minutes. Mayor Laffey told his story of change and the breakthrough programs he has put in place as he fights for the taxpayers of his hurting city. Cranston has the lowest bond rating in the United States, and Laffey is doing what it takes to turn things around. And believe it or not things are turning around even as I write.
More to follow.

See: http://www.electlaffey.com

Whining Crybabies From The Abyss

Every time we do a survey we invariably get back some with nasty notes written in them with no return address or name inside. Some people, I venture to guess, are not willing to stand up and complain in public. To you I say, grow up and be a man (or woman). How can we answer questions and resolve complaints when we don’t know who you are? I am not the bogey man. Write me a letter with your name on it and use your own postage. It’s about speaking your piece to improve the category and the industry.

Imports Issue— Pragmatism vs. The Long View

Over the past two years I have become a fan of Dave Perry, the Executive Editor of Furniture Today. Dave has been around furniture for the past twenty-five years and he knows his stuff. Every week he writes an online essay called Furniture Sketchbook about something or other in the furniture world. He writes, we respond with comments, and he writes back. On August 8th Dave’s essay was “Did Jake go too far in his tough criticism of antidumping leaders?” The essay is archived online so you can still read it. The bottom line is some domestic manufacturers have banded together to protest “dumping” imported product here at home. Jabs called them a bunch of crybabies. This was my response to Dave’s essay:

	Joe’s Favorites from the 2003 Summer San Francisco Market
	Pete Dodge’s "Scooter" frame
	Night & Day’s Futon Sofa Sleeper Bunk Bed
	Big Tree Chair

Providence, RI was once known as the “jewelry capital of the world.” That's the WORLD. We had (note past tense) Tilden Thurber, Imperial, Coro, Monet, Gorham and many other very large manufacturers and their attendant subcontractors in and around the Providence area. That business is gone. There are still some manufacturers who thrive but their impact on the local economy is minimal. Due to the nature of the jewelry product (small size, huge quantities) it was one of the first to be taken to Asia for production, essentially eliminating an entire industry.

This same paradigm has occurred and continues to occur in the textile, furniture, computer, electronics, automotive, and other major industries all across the country. I recently read in my local paper about Pillowtex shutting down and laying off 5000 employees.

Like many today Jake Jabs is a pragmatist. His remarks accentuate a trend in our country (mostly in the minds and hearts of mega sized companies) that growth in volume, marketshare, and profits TODAY is more important than anything to do with TOMORROW. Pragmatism is a philosophy that produces a false security because it does not count the cost in terms of the future but only in terms of the present.

Dumping is bad. It is a way to gain marketshare by circumventing normal business conventions by essentially “buying” marketshare. Since Jabs has built his empire on a pragmatic business model, where price is king, his key justification is to paint the US manufacturer as part of the antiquity of the past. In reality, in my opinion, he is undermining the very economic structure that allows him to succeed.

To prove whether I am right or wrong I challenge Jabs to open one of his stores in VA or NC and let the consumers there decide.

FL