HIGH POINT — Whole-home resource Primo International debuted the first phase of its Smithsonian licensed collection here and relaunched two other marquee brands, bringing production of all three under one manufacturing roof.

Primo dedicated roughly one-third of its two-floor showroom in the International Home Furnishings Center to the middle-range Smithsonian collection and the expanded collections of step-up Stearns & Foster furniture and starting-price Primo Coastline goods. The emphasis is on more designer looks and — especially with Smithsonian and Coastline — scaling product to meet smaller-space living demands.

On the upper floor, the Canada-based resource created a dramatic accent wall of Smithsonian and Coastline products leading into room vignettes that mix and match the lines as well.

With Smithsonian, Primo is starting with an estimated 75 to 80 pieces, inspired by natural elements, a handcrafted philosophy and items on display in its renowned institution’s museums, John DeFalco, Primo executive vice president, told Home News Now. The initial offering includes dining sets, occasional furniture and accent pieces. Dining tables with four chairs are expected to retail for about $1,499 to $1,999.

The initial collection of this Forest Stewardship Council-certified line features light finishes on natural carbon-capturing woods, such as mango, acacia, sheesham and rosewood.

The collection will start shipping within the next two months and be on retail floors by the end of this year or early next year, he said. All three are now being produced by a single Indian factory that Primo has partnered with exclusively. This will make it easier for customers to buy and try in smaller quantities, if, for instance, they want to test, say, the more expensive Stearns & Foster offering without making a huge commitment.

“So now it’s easier to flow, easier to manage, and it gives them a much bigger opportunity when they place orders,” DeFalco said. He declined to identify the factory, but said it was a “true partnership.” “We’re both committed, so the customers are basically buying factory direct.”

In addition to new accents and occasional pieces, Primo’s Coastline was expanded by taking bestselling larger dining pieces, for instance, and developing smaller-size dining groups to fit a wider variety of home sizes.

“We basically exploded the collection into additional pieces and multiple sizes — large, medium, small, pub — with matching occasional tables and sideboards (and television consoles coming). Consumers can buy the rooms, and with today’s open floor plans, it really looks great, when, from the kitchen, you can see your dining area, your living area, and everything has this flow of matching finishes and design.

“It’s very design-oriented, very finish-orientated and ergonomically designed for smaller-space living.”

Retailer reception has been “amazing,” he said, adding that buyers were responding positively to all of it — from the displays to the finishes and designer looks to the not-so designer pricing. Even Stearns & Foster, introduced about a year ago at the top end of Primo’s pricing spectrum, was expanded with new handcrafted pieces with hand-hammered metal and other detailing to retail well below more typical high-end prices. DeFalco pointed to one 60-inch coffee table for instance that will retail for about $999 compared to similar looks in the marketplace that go for as much as $5,000, he said. 

After Primo first launched the Stearns & Foster case goods, Primo found it a little difficult for retailers to dip their toe in because of the initial order commitment. 

“Now, because they’ll be able to bring this product in with our other Primo products, it’s opening the door for them to buy all (three brands) because we’re putting it under one roof.”

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LOS ANGELES — Jack Kashani, the co-founder of World Market Center in Las Vegas, is having a second go at virtual showrooms with the recent launch of 1 Click Design.

The new business provides an immersive and interactive virtual platform for furniture and related sectors to show and market products instantly, “while reducing and eventually eradicating the need for any physical space,” 1 Click Design (1CD) said.

Among the features offered: 3D and 360-degree virtual showroom walk-throughs and tours that can be controlled by either the company representative or potential customer; live meetings in the virtual spaces with avatars representing the attendees; interchangeable product and showroom environments; 24/7 managed access; virtual assistants; advanced customer relationship management tools; robust analytics; ways to engage with the NFT and crypto-currency spaces and more.

It’s all coming roughly two years after Kashani launched Virtual Market Center, another virtual showroom platform that promised many of the same features, but never quite took off. Today the domain is a dead link, but 1 Click is using part of the former logo in the design of the new website and this intro: “Welcome to Meta VMC, the First Virtual Market Center in the Metaverse.”

Kashani said 1CD is different from the initial VMC and much better, not only in the way it’s helping to keep development and show costs down, but in the speed to market it enables and the strength of its analytics and other features.

With VMC, Kashani needed to start with a physical space to create the virtual showroom. Now he doesn’t, he said, but he’s tight-lipped about exactly how he and his team are managing this.

“That’s my secret recipe,” he said with a laugh, declining to elaborate other than to say it involves 3D modeling of actual products. On the 1CD website, in a section on “virtual experiences,” the company says of its 100% virtual spaces: “We do not make dumb copies of physical objects sucked up with a 3D camera, complete with flaws. We handcraft masterpieces at the highest resolution with incredible detail and with built-in intelligence.”

“The way I was doing it before with Virtual Market Center, I was basically doing photography,” Kashani told Home News Now. “We needed  … a physical environment to be able to produce a virtual experience.” And new photography would have been required with every new product and showroom change. Now he doesn’t need a physical space or the photography to be able to produce a virtual environment, he said. “So my way of doing business has changed.” 

Kashani added later that VMC “was not perfect, and I didn’t want to bring anything to the market that was not perfect.” 

Virtual showrooms by 1 Click Design start at about $10,000 and go up from there depending on the menu of services and features a client chooses. Among other things, the virtual showrooms can include two doors if desired — one for retail buyers, designers and others in the trade and another open to the consumer. It can also be applied by retailers and designers who want to open their own virtual showrooms.

Kashani wouldn’t disclose his client count, noting that the business has just launched, but he said 1CD  is a platform that can produce all kinds of virtual experiences for all kinds of businesses — not just furniture resources but home decor companies, building finishes companies, wall art, area rug and cabinetry sectors — basically any source that might participate in a home-oriented trade show with a physical showroom.

In a release, 1 Click Design describes itself as “a specialist team of designers, architects, trade show experts, technologists and marketing specialists focusing specifically on connecting our clients instantly to their customers virtually as if they were visiting the physical space.”

Kashani has experience in both the virtual showroom and physical trade show worlds — the latter thanks to his experience co-founding, developing and running World Market Center prior to its sale to private equity firms. He acted as managing partner there until May 2011.

“I knew there had to be a better way to show and market products,” he said in the 1CD launch release. “The costs and headaches of trade shows and showrooms can be overwhelming and excessive.” He said he has been developing this new virtual platform for years, “and clearly, it is the future of showing, sharing, educating and marketing new products in the proper environment.”

Kashani told HNN that 1CD isn’t necessarily looking to replace those physical spaces you’d find at trade shows but, rather, open a new instant avenue for sales and marketing of the product. 1CD can build a virtual showroom from scratch and to suit if the client desires and also “put them in our own metaverse.” (Kashani said he’s built one of those, too.)

“Our platform has made the job of the suppliers and their sales reps extremely easy to connect with their customers with just one click,” he said. “That means you can enter the showroom; you can invite your customer or pre-register your customer (to come) into your showroom and you can meet with them live in the showroom or have your customer just enjoy walking around … to see things, click on products that they like. You basically go to the showroom from anywhere in the world with one click.”

The data analytics is equally robust. For instance, this reporter spent 11 minutes and 42 seconds in the Prestige Arts & Art Trends virtual showroom on Nov. 9. The appropriate sales representative gets that information plus a time-stamped blow-by-blow of everything I stopped to view so he or she can follow up.

“I understand the business — how expensive and difficult it is to build these kinds of showrooms and operate them and keep changing them,” Kashani said.

“With us — boom — we can instantly show the new products. We don’t have to wait for new trade shows or new events to happen. Everything is instant. You can instantly share the information with your customer. You can instantly educate them. You can instantly have them enter this showroom that is even more beautiful than a physical space.”

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NEW ALBANY, Miss. — G Lipscomb, a former executive at Southern Motion, is getting back into the upholstery business with the launch of Homestead Furniture, a producer of special-order motion upholstery.

Lipscomb, the majority stakeholder, has lined up a team of executives he previously worked with at Southern Motion, and they will start with a 70,000-square-foot facility in New Albany, Mississippi, a former production facility for a theater seating maker. The company expects to hire 117 people over the course of next year and is investing more than $2 million in the launch, Lipscomb told Home News Now.

Contacted in Tupelo, Mississippi, during a job fair for recently displaced employees of United Furniture Industries and Lane, Lipscomb said production will begin in early January. He has an eye on fulfilling expected increases in demand for motion upholstery, he said, but added that the first year of production will be dedicated to a single major furniture retailer that wants to work with the new producer of U.S.-made furniture. He declined to identify the retailer.

In addition to the corporate investment, Lipscomb said the state of Mississippi will kick in about $500,000 for job training and building improvements. That includes about $275,000 from the Mississippi Development Authority for building improvements and $225,000 in grant money through Accelerate MS to provide long-term worker training and support. The city of New Albany and Union County — which has the highest average wage of any county in the state, Lipscomb said — also plans to provide qualifying property tax exemptions.

Lipscomb credited Randy Kelley and Terry Treadaway of Three Rivers — a Pontotoc, Mississippi-based economic and community development firm — with helping connect Homestead Furniture with the state and local assistance needed to bring the project to fruition.

“I’m excited,” he said of his return to the industry. “Just like being at this job fair today — it’s like coming home. When it’s something you’ve done your entire life, it becomes your family.”

Lipscomb, whose father founded motion upholstery producer Southern Motion in 1996, was executive vice president of sales and merchandising there when he resigned from the business in October 2020. Southern Motion was acquired by private equity firm Gainline Capital Partners in 2017 and acquired Fusion Furniture a year later.

At Homestead Furniture, the executive team includes Kayla Steward, vice president of administration; Bobby Rhynes, vice president of operations; and Brandon Onsby, vice president of supply chain operations. Lipscomb worked with all three at Southern Motion at one point or another during their careers.

In a release, Mississippi Gov. Tate Reeves said, “The continued growth of Northeast Mississippi’s furniture manufacturing industry positions the region as a top location for furniture production, with thousands of Mississippians making quality furniture for great companies like Homestead Furniture. These 117 new jobs will expand this major economic driver for North Mississippi.”

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Total liquidation of eight retail locations will be handled by industry sales specialist Planned Furniture Promotions (PFP), though the exact date hasn’t been set for the closeout events, according to a release. PFP said it expects sales to begin in January.

Stores include five in metro St. Louis, two in Indianapolis, and one in Springfield, Mo.

“After 25 years of serving the St. Louis area, Indianapolis and Springfield, Missouri, we are so grateful for the many team members who worked with us and the customers we have been fortunate to serve,” Phillips said in a release. 

Weekends Only has approximately 400 employees with most continuing to work through the liquidation sales. Store management said all current orders will be filled.

The company was No. 103 on HNN’s inaugural ranking of the Top 125 furniture and bedding retailers with estimated furniture and bedding sales of $69 million at eight stores in 2021, up 9.5% from $63 million at seven stores the year before.

The news follows the departure of former President and CEO Lane Hamm in August after 15 years with the retailer and more than eight years as its CEO. He’s now CEO of AZ MediQuip, a Phoenix-based provider of home medical equipment.

Weekends Only was one of the first stores in the country to operate on an abbreviated schedule, open Friday through Sunday only, with the reduced hours designed to save customers money. The business was built on offering the best price on brand name furniture displayed in large, no frills warehouse showrooms with a friendly and no-hassle customer experience. It later added an e-commerce business, offering 24/7 shopping, which grew to account for nearly 14% of annual revenue, Phillips said.

In the release, Phillips, 70, said he looks forward to his retirement to spend more time with his wife, Peggy, family, grandchildren and friends.

“We cherish the many friends we have made in the industry over the years. There has been so much change in our industry over the past few years and given the storm of challenges retailers face, now is a right time to retire and celebrate the success and good fortune we’ve had in the business,” he said.

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HIGH POINT — Handy Living came to the October Market here with its eye on big furniture stores and a handful of new upholstery pieces designed especially to work for them — be it in-store or online.

The upholstery resource is using its experience in small parcels and selling to the e-commerce home furnishings giants to create a more efficient logistics and product model for furniture to be shipped, warehoused and delivered to the consumer — even bulky products, such as sectionals. 

In High Point, after nearly three years of of dealing with product development that was stymied by Covid — including closures throughout Southeast Asia — Handy Living introduced new concepts driven by its product engineering, packaging and container optimization. The stars included a modular sectional along the lines of something you might imagine from Lovesac, but built and packaged in a way that keeps the retail price at a fraction of the modular pieces offered by the publicly held retailer, manufacturer and e-commerce company.

And it’s doing so without sacrificing quality, said Tom Erdman, corporate advisor to Handy Living. The seven-piece sectional can retail for $1,799 at long margins and will come in three colorways. It will include a leather look and features performance fabrics, Certi-Pur foam, reversible cushions and FSC-certified lumber. A four-piece loveseat version (including two square ottomans) will retail for $799.

“Sectionals are huge business, and modulars are getting bigger because of the flexibility,” Erdman said. “But they’re very bulky in the truck. They’re monstrous.”

Typically, sectionals that look similar to Handy Living’s newest iteration would fit 16 or so to a container, he said. But not so for Handy Living. The similarities in product end with the look.

“We can fit 45 of these,” he said. What’s more, the carefully proportioned boxes mean consumers don’t necessarily have to wait on and pay for white-glove delivery. They can take the sectional (seven boxes) home in one trip in their Toyota RAV4 or similar SUV. Or it can be shipped via UPS or FedEx without going over the size threshold that would trigger extra charges.

Erdman contended the engineering Handy Living demonstrated with the new product this Market was “at a level not seen before in the industry,” and he gives all the credit to Luke Zei, the company’s director of product development. A typical container of furniture loads “85% efficient,” Zei told Home News Now. Handy Living has increased that through its design to about 97%. That means more furniture goes in the containers, which, in turn, drives down the retailer’s costs and the retail price on everything from shipping to storage to delivery.

“It’s always been our position that air is the most expensive product to ship,” Erdman said. “When you look around our showroom, you will see the phrase, ‘Less is Greater than More.’ This is an example of that.”

The latest moves are as much to help the efficiency and profitability of big retailers today as they are to help Handy Living. For years, the company has made its living selling primarily through the big e-commerce channels. That’s not going away, but Handy Living recognizes the struggles that channel faces in this era of rising interest rates, inflation and weakening demand. There has been a pivot back to brick-and-mortar stores after an initial pandemic-inspired acceleration in online shopping. Brick-and-mortar stores still control the lion’s share of the business and will probably do so for years.

“So in order for us to play where most of the people play, we need to play in brick and mortar,” Erdman said.

What Handy Living has been trying to do, whether that’s for the e-commerce world or furniture in general, is add value, Zei said. “And one of the best ways to add value on our side of the business is by being more efficient with how it moves through the whole supply chain.”

That’s what Zei said he was thinking about when he was developing a “more brick-and-mortar-scaled modular sectional,” and by that, he means, in part, a sectional that sits deeper than most of the product sold via the large e-commerce players. It needed to be the right scale for stores but also built to fill up that container from Vietnam without wasting space, boxed so it could also be drop shipped affordably, sit on a single pallet in a warehouse, and give the retailer and its customers options, including take-with and affordable order online and delivery with easy assembly (one tool and a few screws).

Handy Living also was able to reinvest some of the savings gained by efficiency back into the product while keeping the price down. That included higher-end fabrics, such as linen, and a solid foam core cushion (versus pocket coil used in similar e-commerce product coming from overseas), Zei said.

It also doesn’t compress the cushion, which Zei said leads to a more “consumer-friendly unboxing experience.”

Pretty much by accident, the modular pieces include some easy-to-access cavities, in which a customer (or a retailer) could install a subwoofer. So for the price of an inexpensive surround-sound system, they’ve got a home theater without the expensive product upgrade, Erdman added.

While the modular sectional, a related loveseat and a new recliner — the latter designed to fit 312 to a container — work for both store and e-commerce sales, Erdman said one of the objectives here is for Handy Living to start moving into the brick-and-mortar area with its learning from playing in the e-commerce field. It’s starting with product that’s priced right to deliver a, say, 55% gross margin should a retailer choose to take a long mark.

The new product is expected to ship from Vietnam by the end of January and be available for sales later in the first quarter.

Erdman noted he’s been in the business since 1979, and, “this is the smartest thing I’ve ever seen from a blocking and tackling, efficient furniture delivery (perspective).”

“It’s not sexy or anything like that,” he said, “but it does what it needs to do.”

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HIGH POINT — Primo International expanded its partnership with Tempur Sealy International in a big way with the introduction of Sealy branded loungers and office chairs at the October Market. 

And this was on top of an expanded offering of Stearns & Foster branded furniture, officially launched in Las Vegas this past summer. The combined two lines took up nearly the entire first floor of Primo’s two-level showroom in the International Home Furnishings Center.

About 16 foam-filled bean-bag-style Sealy loungers were on display in multiple styles and sizes, including a 6-foot sack-style lounger (expected to retail for about $299), gaming loungers, sofas, sectionals (retailing for about $399), ottomans and giant floor pillow loungers.

In addition, Primo introduced about a dozen office and gaming chairs expected to retail from about $119 to $399. Features include pocket coil and memory foam seating and soft fabrics that mimic the feel of high-end leather at $99. The gaming chair versions also include massage units in the back for more comfort and support during extended play times.

Just like the Stearns & Foster licensed furniture line, the new Sealy licensed collections are being sourced globally. They will be in Primo’s warehouse and available for delivery to retailers by year end, said John DeFalco, executive vice president of the Canada-based whole-home importer.

The Sealy collections were “extremely well-received,” and purchased by both U.S.-based and international retailers, DeFalco told Home News Now. 

“It was a great launch,” he said. “Sealy is the most trusted mattress brand in America. Retailers appreciate the brand awareness and have high expectations for Sealy product in terms of quality, comfort and style.

“Consumers trust the brand and want the brand,’ he added. “This is a tremendous marriage from the standpoint of taking Sealy into other parts of the home in these categories.” Given the warm reception, DeFalco said Primo will expand the lineup for the Las Vegas Market in January.

Roanoke, Virginia-based Grand Home Furnishings is a buyer of the Stearns & Foster furniture line by Primo and will be a buyer of the new Sealy product, too, said President George Cartledge III.

“I thought they were spot on with it,” he told HNN.

Plus the brand recognition, with all the marketing behind it, is sure to be a positive. 

“In Roanoke, where the population is just over 100,000, we have 52 places you can buy a mattress,” he said. “They’re advertising all the time and they’re advertising those names. We’re all advertising Sealy. We’re all advertising Stearns. We’re all advertising Tempur-Pedic, Serta — the old brand names.” Now multiply that by the even bigger markets with more mattress sellers, and you can see the logic behind this partnership and the marketing muscle that comes with it, he said.

“I think Primo aligning themselves with Stearns, with Sealy, is a good move,” Cartledge said.  “It really expanded their offering and put them in the ballpark of competing with other suppliers.”

At the same time, Cartledge believes the responsibility that comes with offering these names in various furniture categories likely inspired the Primo team to stretch a bit to make sure it was offering products “representative and consistent with the reputation of those names in the industry.”

“I’m sure it led them to think out of the box,” he said.

In High Point, Primo also saw strong retail reaction to the expansion of its Stearns & Foster licensed collection of upholstery, case goods, occasional furniture and new area rugs. DeFalco said the company roughly doubled the size of the offering, primarily by building out existing categories, including the addition of new frames, fabrics and leather options. It also soft launched a collection of hand-knotted wool area rugs dyed to correlate with the leathers and other elements of the Stearns & Foster furniture.

Primo upped Stearns & Foster’s presence not only by SKU count but by the way it was displayed — with more branding elements, including a brand wall similar to the one used in many Stearns & Foster mattress galleries, and lifestyle images that blend in research findings, such as the vignette just off the showroom entrance. It highlights an upholstery setting and a backdrop graphic of a stylish female shopper and research stating “one-third of consumers shopping for furniture are highly likely to purchase Stearns & Foster branded furniture.”

More scenes from the Primo showroom below.

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These and other events brought the Market back to a place many of us recognize and love, thus ending the limited and in many cases canceled gatherings we all endured during the pandemic.

“It was like old times,” one designer told Home News Now. “Exciting, active, friendly, lots of food and giveaways.” Not to mention, the “furniture and accessories looked good.”

Below are some of the highlights captured by our editors Clint Engel and Tom Russell who got to as many events as possible during the five-day event. In addition, some industry friends and associates shared some images of their own, including Drew and Jonathan Scott who took some selfies we thought we’d share for this lineup.

First some fond farewells: To High Point Market Authority President and Chief Executive Officer Tom Conley, right, shown at a reception in his honor with Harold Brubaker, left, Brubaker & Associates; Tammy Nagem, who succeeds the retiring Conley; and Pat Conley.

AICO President Martin Ploy is retiring next month, too. He’s shown here (center) at a reception in his honor with AICO CEO Michael Amini and other guests. Friends stopping by included …

Raymour & Flanigan’s Steve Goldberg, left, Seth Goldberg, Adam Goldberg and Neil Goldberg

Carlos Capo, left, El Dorado Furniture, Miami Gardens, Florida; Ploy; and El Dorado’s Pedro Capo and Alfredo Lopez

And Keith Koenig, left, City Furniture, Tamarac, Florida, with Michael Amini, AICO; Irwin Novack, Kane’s, Pinellas Park, Florida; and David Koehler, AICO

This year’s American Home Furnishings Hall of Fame inductees at the pinning ceremony: John Gabbert, left, Room & Board, Minneapolis; Michael Dugan, former president and CEO of Henredon; Michael Amini, AICO; Neil Goldberg, Raymour & Flanigan, Liverpool, N.Y.; and Steve Pond, founder of Furniture Today.

A celebration shot from the Hall of Fame dinner

And one from the cocktail reception: Valerie Berman, left, The RoomPlace, Lombard, Illinois; Pasquale Natuzzi, Natuzzi; Bruce Berman, The RoomPlace; and Gianni Tucci, Natuzzi.

Here’s one from International Home Furnishings Representatives Assn.’s Furniture Industry Awards Gala at High Point University: Bobbie Leflein, left, with Tommy Leflein, A.R.T., and Distinguished Service honoree; and Jack Hawn, Zenith Global Logistics, now J.B. Hunt and IHFRA’s Pillar of the Industry honoree. Check out our full coverage of the gala, too, in this Friday’s edition.

Attending the WithIt’s WOW Awards event were Cathy Lloyd, left, The Media Matters; Gail Doby, Pearl Collective; Dawn Brinson, The Media Matters; Erin Weir, Pearl Collective; and Kathy Wall and Melissa Donnell, The Media Matters.

Craftmaster Furniture celebrated its 50th anniversary this Market. Seated in the front row from left to right are: Richard Meadors, vice president of sales;  Roy Calcagne, CEO;  Suzanne Henson, vice president of merchandising and marketing; Alex Reeves, president; and Steve Beeker, vice president of sales and merchandising. Standing in the background is the company’s sales team.

New Classic Furniture celebrated the opening of its Royal Classics division at Market. Shown here are Thomas Russell, left, Home News Now, and Bill Dominguez, Jean Tong and Hans Tong, all of New Classic.

Drew and Jonathan Scott made an appearance at HMI Group, a division of Hooker Furnishings, to celebrate their latest product introductions at HMI. Shown here from left to right are Drew Scott, Scott Living; Dorothy Linville, Jackie Spooner-Wilhoit and Patricia Small, all of House of Design, Hilton Head, South Carolina, and Jonathan Scott, Scott Living.

And here are the Scott Brothers again with Rene Green and Jake Jabs, American Furniture Warehouse of Englewood, Colorado.

Here’s the Scott Brothers’ idea of a good prank with the selfie they took with Tom Russell of Home News Now.

Now that’s a little better, Drew and Jonathan! Or maybe not?

Libby Langdon, center, Fairfield Chair, with Patricia Small, left, and Jackie Spooner-Wilhoit, of House of Design, Hilton Head, South Carolina.

Members of the Malaysian Timber Council are shown assembling a piece of KD shelving produced in Malaysia. The group met with various suppliers at Market and also held a reception on Monday evening at Congdon Yards.

At Market, Sherrill Furniture celebrated the opening of its reimagined showroom at 315 Fred Alexander Place. Shown here are Sydney Wells, left, Charles and Jeannie Sherrill, and Brian Brown, all of Sherrill Furniture.

Rick Suffoletta, left, Suff’s Furniture, Nicholasville, Kentucky; June Sedlak Mooney, Studio J, Dublin, Ohio; Aminy Audi and Edward Audi, Stickley; Robin Van Huss, Traditions Furniture, Overland Park, Kansas; and Dick Suffoletta, Suff’s Furniture, Nicholasville, Kentucky.

Jackie Spooner-Wilhoit, left, House of Design, Hilton Head, South Carolina; Barclay Butera, Lexington Home Brands; and Patricia Small, House of Design.

Edson Martinez, left, and Fernando Estrada, of Meximuebles, celebrate the last night of Market with Becky and Tom Russell, of Home News Now.

The post People and places at October Market appeared first on Home News Now.

Retail furniture sales totaled $12.02 billion, up from $11.91 billion a year ago. September sales were down 0.7% from August sales, the latter revised up to a preliminary estimate of $12.12 billion from the previous report. That revision reversed a negative year-over-year August report from last month, for a 2.1% gain in August over August a year ago.

Combined retail and food services sales in September were an estimated $684 billion, up about 8.2% from September 2021 and roughly flat with August 2022 sales results. Retail trade sales alone increased 7.8% from September last year and were down 0.1% from August, according to the report.

Just like last month, nearly every sector covered in the U.S. Department of Commerce report outperformed furniture, save for electronics and appliance stores, which posted an 8.6% year-over year decrease in September sales. It was the only sector showing no YOY growth.

The greatest YOY gainers were gas stations, up 20.6%; nonstore retailers, which included e-commerce companies, up 11.6%; and restaurants and bars, up 11.4%.

For the three months ending in September, furniture store sales increased 1.4% over the same period last year and were down 0.8% from the April-through-June period. Electronics and Appliance stores were off 8.6% from the July-through-September 2021 period, and nonstore retailers were up 13.8%.

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DANVILLE, Calif. — When CSC Generation acquired a 50% stake in Home Consignment Center here two years ago, HCC co-owner Johnny Crowell heard the same kind of concerns that Home News Now heard from retailers when CSC made its since-rebuffed offer to buy Flexsteel.

Among those worries: The digital-first owner of DirectBuy, One Kings Lane, Z Gallerie and other brands would somehow work around HCC’s stores and not protect the brick-and-mortar business that it had built for decades.

“That was the first take all my stores had,” Crowell told HNN. “What are these guys going to do? Take it over and sell it all online?

“Then the reverse happened,” he added. “The relationship ended up with us doing substantially more business, all my people making more money … all of the stores producing more profit. I can only speak to my situation, but I’m a brick-and-mortar seller, and my sales are through the roof.”

Granted, this is not an apples-to-apples comparison by any measure. Flexsteel Inds. is a furniture manufacturer selling to an independent network of retailers. Home Consignment Center is a midsized retailer. CSC bought just half of HCC in 2020. Last month, it proposed to buy all of the publicly-held Flexsteel’s stock for $20.80 a share, or about $115.6 million (As one retailer noted, that’s less than a recent quarter’s worth of Flexsteel’s revenue.)

Regardless, in his publicly released proposal letter to Flexteel’s board, CSC Founder and CEO Justin Yoshimura mentions Danville, California-based Home Consignment Center as just one example of how CSC gets along with existing leadership at its various holdings while also strengthening their business.

“Across our portfolio, we also have a strong track record of partnering with existing management and building upon the legacies of longstanding furniture businesses,” he wrote. “One such example is the Home Consignment Center, which the long-time founder has continued to operate since we acquired the business. If you would like to ask him about his experience working with us, I would love to put you in touch with him.”

Some industry observers took this as somewhat of an odd offer to lay out there so publicly. Yoshimura has declined to answer HNN’s questions about the Flexsteel bid, including whether or not CSC will make another offer now that the first publicized bid was rejected. But just as he offered to connect HCC’s Johnny Crowell with Flexsteel, Yoshumura made the same offer to HNN, and we took him up on it. 

The 79-year-old co-founder and now managing partner of HCC, Crowell shed some light on how the privately-held CSC operates with both suppliers and retailers in and out of its portfolio. Here’s what we learned from that interview and follow-up emails with both Yoshimura and Crowell:

Home Consignment Center was founded 28 years ago by two families with “four type A personalities,” said Crowell. It operates 16 stores in California and Texas and has become a major outlet used by a number of brands to liquidate returns and overstocks.

Its stores average around 14,000 to 15,000 square feet. They’re located in affluent communities and sell furniture, accessories and jewelry “to the yuppie crowd.”  Crowell said. They take goods in on a consignment basis from this same target consumer to some degree, but also from retailers, suppliers and others, including several of CSC’s portfolio companies and connections. Furniture accounts for the vast majority of sales, and furniture and accessories combined make up about 70% of the total.

CSC took a 50% stake by buying out HCC’s other co-founders in late 2020. Crowell said he doesn’t know what CSC paid for it, and CSC has not disclosed the terms. Crowell continues to own a 50% share in the business, and under a modified partnership agreement, he controls it and gets a larger percentage of profits for his management efforts, he said. “That seems consistent with (Yoshimura’s) M.O. where he buys a business and has the management continue, but where he also offers his services, connections and relationships to assist the remaining team to obtain more success,” he said.

HCC has tasted that success. In the past two years, business has boomed for the retailer. Sales rose last year by $8 million to $58 million and are up about 6% so far this year. 2021 profits, Crowell said, were up more than 300% over the best year the company had ever had. 

Nearly all sales are generated through HCC’s network of brick-and-mortar stores. It does not sell furniture online — even now, two years after partnering with CSC Generation.

HCC takes “a lot of stuff from factories and middleman,” said Crowell. “We’re really good at onesies and twosies, so we can take 53-footer after 53-footer of mixed stuff folks get left with. We’re not good at thousands of the same piece.” HCC will buy some of the merchandise through a subsidiary when necessary, but it prefers the consignment model. Here’s its pitch to anyone looking to sell rather than consign:

“When we go out and buy it, which is not our favorite, we have to figure it’s going to do poorly,” Crowell said. “We always show these guys how much money they would’ve made had they consigned it.

“Our consignment rate is 50-50. We do the work. The consignors get 50% of what it sells for. What we don’t do is the trick in the trade, which is to overprice things to get them in, and then go through a series of markdowns every 10, 20, 30 days or whatever it is. We try to price it to sell, with a little bit of leeway to negotiate. No markdowns.”

About half of merchandise sells within the first 14 days on the floor, he said  — a pretty fast turnover that Crowell credits to the way it has structured its store operations. The people who sell the goods are the same people who take it in. They say yes or no to items, and they price it. They’re also bonuses substantially on how their particular store does every month and based on the hours they’ve worked.

“They don’t get paid a commission because the people bringing it in and sweeping the floors are just as important as the people selling it,” Crowell said. “They all work on a team, and the better the team does, the higher the bonus number, the more money they make. So they’ve become pretty darned good at pricing items and making choices about what should be there and what shouldn’t.”

Clearly, Crowell’s HCC doesn’t operate like a traditional furniture store so there are no straight-line comparisons to how it functions as a CSC partner vs. what could happen should, say, Flexsteel — or any other furniture maker for that matter — become part of the portfolio. But the reason Crowell was made available for comment to both Flexsteel and the press was to offer some insight into what a home furnishings brand stands to gain from the relationship with CSC — at least from the viewpoint of CSC and one of its portfolio companies.

With that disclaimer, we jump back to what Crowell had to say about this fairly new relationship. Surprisingly, it has nothing to do with technology even though that’s one of the main things CSC Generation promotes about itself on its website — that in addition to being savvy investors, it builds “proprietary technology and centralized teams across the stack to generate alpha.”

“One of the best things they brought (to the table) is something they didn’t bring,” Crowell said. “And that is, they didn’t start to micromanage us.”

For years, HCC operated as a two-family-owned business with four Type A personalities. It was a happy marriage, he said. Together, they made a lot of money, and they parted on “wonderful terms.”

“But sometimes, with four people making decisions, you can complicate the process,” he added. “One of the things CSC did (with the purchase) is they took that away, which gave us the ability to operate the business as we needed. They haven’t ever looked over our shoulders. They don’t critique. They’ve just given us complete freedom — more freedom than we had before they came in, so that’s been a positive.”

The second thing CSC did, which Crowell said benefited the company tremendously, is help Home Consignment Center connect to the many partners and relationships CSC has been nurturing in the industry. He’s talking about everything from the delivery companies that have product left over from sales that have gone wrong, to buys of surplus merchandise to returns from CSC-owned companies such as Z Gallerie and One Kings Lane.

“That’s been a wonderful part of the relationship, and I would say that was a substantial contribution to our sales increase,” he said. 

Although it’s not selling furniture online, in a way, HCC has become a sort of clearance center for e-commerce furniture businesses.

“When you sell things online, sometimes the people aren’t there, or it’s a different color than they  expected, or somebody passed away or the address was incorrect,” Crowell said. “So online sellers end up with a vast amount of stuff — one of these, two of those — that they don’t know what to do with, and they wind up paying warehouse fees and trucking fees and labor fees to manage it.

“We just take it and we turn it into money pretty quickly.”

HCC gets goods in from CSC’s DirectBuy, Z Gallerie and One Kings Lane as well as furniture brands inside and outside of its portfolio of companies. From outside the portfolio, for instance, Crowell said his company has done business with Flexsteel and that he has a lot of respect for the manufacturer.

From inside the portfolio, other than the retailers named above, it’s a little harder to pinpoint, because the only other brands listed on CSC’s website besides Home Consignment and the other three retailers mentioned, is Sur la Table, a kitchen and cookware company CSC acquired in partnership with Marquee Brands in August 2020 for nearly $89 million.

There are no suppliers listed, but CSC has been snapping up a few.

Crowell said he knows this not because he has any direct knowledge of the deals but because he’s getting the product from these sources funneled through CSC. CSC struck a deal awhile back with home furnishings source Euro Style, and now HCC gets a bunch of its modern home furnishings. More recently, Crowell said his stores have been asked to take office furniture and chairs from suppliers Cherryman Inds., and iDesk, which tells him that they’ve been acquired, too.

HNN followed up on this with CSC’s Yoshimura, who confirmed the latter two deals were acquisitions without providing details other than to say they should be live on the CSC website soon. He called the Euro Style deal, “more of a strategic partnership.”

Crowell said Home Consignment Center is eager to return to expansion mode and that’s been another benefit of the CSC partnership. Before the deal, expansion was one of the subjects that caused internal partner conflicts, he said. Crowell wanted to grow, but the others weren’t interested and wanted to retire. Yoshimura, he said, “has given us an opportunity to really be serious about it.”

A new Home Consignment Center store opened in Torrance, California, about six months ago, and in addition to backfilling existing markets, HCC is exploring expansion opportunities in Florida, Colorado and Arizona. 

“That’s a nice thing about Justin’s companies,” Crowell said. “They have some resources. They’ve given us some locations to look at, and that will definitely help us expand.”

Asked if the tech-savvy CSC has helped HCC with any technology adaptations, Crowell said not yet, but they’ll probably be coming.

And will HCC eventually sell furniture online? Crowell said he doesn’t see that ever happening, but HCC does sell some jewelry online and he feels certain CSC will help grow that business.

This led to one last story Crowell wanted to share, which he believes might quell the concerns of any furniture operator worried that a CSC takeover would lead to rash decisions about the future direction of their businesses. 

“We are just a small player, having fun making money,” he said. “We’ve been around awhile, have a pretty decent reputation, and Justin shows up in the picture with lots of irons in the fire, a lot of clout and a lot of sales.

“And he comes to me and says, ‘Hey, what do you think about putting some jewelry kiosks in our Z Gallerie stores?’

“I say, I don’t know. We’ll give it a try. Let’s test three of them and see how they work.”

That tells Crowell something critical about the company that now owns half of his operation. “Here’s a guy that has the big clout looking to see if there are ideas he can pick up from the guys already (operating) to use for his growth.  I think that’s unusual in this business — that the young guy is asking the old guys for a couple of tricks to put into play in his operations.”

In fact if a Flexsteel partnership of any sort did ever come to pass (reminder: the publicized proposal was rejected), Crowell believes Yoshimura “is liable to pick the Flexsteel guys’ brains and let them give him some guidance on some of the things that he does.”

But he added the advantages could be mutual. Even though HCC doesn’t sell furniture online and has no plans to go that route, “There is a shift in the market to selling things online, and these guys are pretty good at it,” Crowell said.

As for the Z Gallerie jewelry kiosks, the third test recently opened in a Z store in Boca Raton, Fla. The others are in Dallas and Roseville, California, stores. In addition to jewelry, they’re selling consigned designer handbags. 

“He follows through, and now we have a little joint venture,” Crowell said. “Maybe it works. Maybe it doesn’t. But it says a lot about who I’m dealing with. I have a lot of respect for that.”

The post How things changed for Home Consignment Center after the CSC Generation deal appeared first on Home News Now.

It was one of the worst performing retail sectors tracked by the government. The only other sector posting negative numbers was electronics and appliance stores, down 5.7% year over year.

Estimated furniture store sales totaled $11.78 billion in August, down from $11.97 billion a year ago. August sales also were down 1.3% from  the $11.94 billion in July. That’s even after the government revised the July estimate down from the previously reported $12.12 billion.

Nearly every other sector fared far better as bigger tickets caused by inflation weren’t enough to offset weakening demand for furniture. Combined retail and food services sales in August were an estimated $683.3 billion, up 9.1% from a year ago and up 0.3% from July. Retail trade sales alone increased 8.9% from August last year and were up 0.2% from July, according to the report.

The biggest gainer among the sectors that are broken out DOC was gas stations again, up 29.3% from August last year. But recent price decreases at the pump are starting to show, as sales were down 4.2% from July. Miscellaneous store retailers (think mail order houses, vending machine operators, home delivery sales and street vendors, for example) showed the next largest year-over-year gain, up 15.3%. Non-store retailers, which includes e-commerce players, was next with an 11.2% increase over August of 2021 (but down 0.7% from July).

After electronics and appliance stores and furniture and home furnishings stores, the next weakest category by sales was department stores, a subset of general merchandise stores, which eked out a 0.7 YOY increase.

For the three-month period from June through August, sales for furniture and home furnishings stores declined 0.1% from the same period last year and were off 2.2% from the March-through-May period. Appliance and electronics dealers were down 9.1% from a year ago, and department stores were off 0.7%. Non-store retailers saw a 12.7% increase.

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