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

The Lifestyle Solutions, Klaussner Connection

Sean Pathiratne (President of Lifestyle Solutions), and JB Davis’ (President of Klaussner Furniture) “sofa bed convertibles” are grabbing traditional furniture retailer floor space with a proven product via a proven channel. What this means cannot be overestimated. In my opinion this team effort may be the single best opportunity to legitimize the futon sofa sleeper as a mainstream alternative to the traditional model, and if successful will also help define the future of the category. Many have tried, with marginal success, to make the case this collaborative effort attempts to make. We wish them the greatest success.— Editor

(l to r) Larry Little, National Accounts Sales Manager for Klaussner, Joe Tatulli, Publisher of Futon Life, JB Davis, President of Klaussner Furniture, and Sean Pathiratne, President of Lifestyle Solutions discuss the past and future of their joint venture to sell “sofa bed convertibles.”

During a visit to San Jose to do a story on Lifestyle Solutions in the summer of 1997 Sean Pathiratne showed me prototypes of what would become his company’s patented metal bracket system. Being a leader and not a follower he also talked openly about developing a quality product line that did not depend on other manufacturers or supply side vendors. Even then he saw a future where Lifestyle Solutions would supply product to dealers through a channel that he would originate and maintain. Not knowing Sean as well as I do now I responded politely by wishing him much success. Well, he’s done it all and then some.

Bringing his vision to reality meant building factories, not relationships with factories. It meant having his own people do the necessary QC and not relying on international factory reps. It meant having a vested interest in natural resources like lumber and real estate, not just relationships with lumber and other suppliers. “It meant breaking with where most of the industry was going,” said Pathiratne. “We wanted to be different for many reasons,” he said.

Teaching An Old Dog New Tricks

It is important to understand why Pathiratne started calling his products “sofa bed convertibles.” “Most people consider futons to be a cheap, inexpensive item that is predominantly bought by students. It was important for Lifestyle Solutions to disassociate our product from that cliché. Lifestyle Solutions sells an item that is comparable to the traditional sofa sleeper,” he said. In fact, Pathiratne encourages his futon specialty dealers to call his products sofa bed convertibles as often as possible. “The dealer has nothing to lose by using the phrase ‘sofa bed convertibles’ or ‘sofa sleepers’ in their advertising, signage, etc. Imagine a customer that is looking for a sofa sleeper. That person may drive right past a futon store and go to a traditional furniture store and purchase a sofa sleeper because in her mind she considers the futon a cheap piece of furniture,” added Pathiratne. He is not saying to eliminate the word “futon” but he is advocating adding the phrase sofa bed convertibles or sofa sleepers to their ads and signage. “Even if a few of those potential customers came in to the store, the dealer would have an opportunity to present the benefits of a sofa bed convertible and show why it makes more sense from a ‘function, comfort and style’ standpoint than the traditional sofa sleeper,” he said.

Over the past few years Lifestyle Solutions has crafted both the product and the message that has propelled Pathiratne’s company into one of the top vendors in the category. But that’s just part of the story. Pathiratne’s ultimate goal has been the Holy Grail of many in our business. That being finding a way to penetrate the traditional furniture retailer and then maintain floor space for the long term. “The plan was simple,” said Pathiratne. “We had to appeal to a traditional furniture buyer, and that meant calling our product a ‘sofa bed convertible.’”

Changing the nomenclature was the first critical step. Then they (Lifestyle Solutions) created a product with a simple to operate mechanism, a quality fit and finish, durability built into their metal bracket system, and a “box to bed in 10 minutes” assembly scheme. The retailers they were targeting wanted a solution, not more problems.

The Cradle Rocks

“Many furniture stores across the country have dealt with a long history of problems (with the futon sofa sleeper). We did all the research and product development necessary to create a mechanism that will stand up to everyday use by the average sales associate in any furniture store across the country,” Pathiratne said. Speaking of his company’s patented ”Cradle” mechanism he added, “If it is difficult for a woman to convert a sofa-bed she will not buy it. The “cradle” makes all the difference because of the ease of operation. This was the key that had prevented anyone like Klaussner from doing this in the past.”

Klaussner and the Sofa-bed Showdown

It’s an established fact that futon sofa sleepers, as a product category, have been eating the lunch of the day bed and even the traditional sofa sleeper for years. Leggett & Platt’s Fashion Bed Group, Dorel, Sealy, Coaster and most of the other mega vendors of these imported, simple to manufacture commodities have had to jump into the futon sofa sleeper business like it or not. Obviously their success is part of the reason Furniture Today’s most recent consumer buying survey (F/T V27N25, February 2003) clocked “futons” at a mean price point of $200 (a number we’ve disputed, but it’s hard to argue with such a large sample). They have, and some still do, sell what is selling. Trend spotting never creates a market; it merely sells into an already established one. But there is more to this product than meets the eye. That’s where Klaussner comes into the picture.

Like many of us, Lifestyle Solutions views the futon sofa sleeper as much more than a commodity. It is a great place to sit and sleep. It is a comfortable, value priced alternative to the traditional sofa bed. And, it has a style all its own. “We call it Function, Comfort, and Style,” said Pathiratne. When JB (Davis), Klaussner’s President, visited San Jose in June of 2002 their half-hour meeting became a five hour meeting. As the largest sofa bed producer in the US (number four overall with sales of $860+ million as reported recently in Furniture Today’s Top 25 Manufacturers survey, V27N35, May 12, 2003) Davis had seen the penetration of futon sofa beds into his core business. He needed a partner to manage the business. He had done his homework and found Lifestyle Solutions. “I reacted by asking him why should I put him into business,” Pathiratne said. Pathiratne’s engaging style and entrepreneurial drive saw an unprecedented opportunity. In July of 2002 he and JC Gholston, his National Sales Manager did a presentation in Asheboro, NC at Klaussner’s home base.

In an obviously convincing presentation Pathiratne and Gholston literally put their sofa bed convertible up against a traditional sofa bed in a contest they like to call “The Sofa Bed Showdown.” “We put their National Sales Manager on the traditional model and JC on ours,” Pathiratne says with a smile. The object of the first test is a demonstration of the simple functionality of the sofa bed convertible. “I told the two contestants to just convert their sofa bed from a couch to a bed and back to a couch. JC was done before the other guy had removed all the cushions. While he proceeded to finish the process I talked about functionality. They all began to understand,” he said. As Pathiratne walked Klaussner through the comfort, style and obvious value propositions associated with his products he made believers of JB Davis and Larry Little, a Klaussner product manager, and many others as well. In fact the sofa bed showdown concept is integral to the presentation process for retail buyers, sales associate training, and then even translates to selling at the consumer level.

“If we are able to do this right I don’t see any reason our sofa bed convertibles can’t be in every furniture retailer we ship,” said Little. Klaussner’s distribution channel will allow any of their dealers to add (futon) sofa bed convertibles to their order.

Klaussner’s Program Incorporates Depth and Distribution Horsepower

The Klaussner program is tight on the frame side with an easily managed five step-up program that ranges in MSRP from $299.99 to $499.99. Four of the frames are all wood, and the fifth is a contemporary all metal frame. On the other hand it is extremely deep and wide on the upholstery fabric side as it incorporates all 700 fabrics in the Klaussner line. “When we looked at the upholstery issue and the fact that most of our dealers carry the entire swatch program we said why not,” added Davis. Klaussner is also manufacturing all the mattresses, providing their dealer base with a closed loop single source for the entire program. All this is also supplemented with a strong in store marketing program including POP, print collateral and a gallery program.

What’s in a Name? — Function, Comfort & Style

“We are totally convinced that calling this product a sofa bed convertible will unlock a customer base that has always been there,” said Pathiratne. “The reality is many shoppers never realized the comfort, features and value of this alternative to a (traditional) sofa bed. By moving away from the name (futon) we are opening so many more doors that had been closed. We are hoping that $499 and $599 will be the normal price point for a sofa bed convertible, as opposed to what the mean average price point is for a ‘futon’, and we are already seeing progress.”

You may or may not see the light, but the fact remains that sofa bed convertibles are here and they are being delivered on Klaussner trucks to a retailer near you. FL

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