changing styles

---

Michael Knell’s

HGO merchandiser HomeGoodsOnline.ca

SPRING 2016

Volume Five, Issue 1

✽ changing styles

PROMPT BEDROOM’S GROWTH

Furniture stores: 2015 was the BEST YEAR EVER

ISLAND FURNITURE: finding success as a helping hand

CFS: charging ahead with something NEW

CONTENTS

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6

36

Canadian furniture stores had a pretty good 2015; in fact, it was the best year furniture store owners have had in this young century; the best even in their history. However, it should be pointed out that achieving this milestone hasn’t really done us a lot of good. For example, the sector isn’t getting a bigger piece of overall consumer spending.

The organisers of the Canadian Furniture Show are adding a few new wrinkles to the 2016 edition, which opens at Toronto’s International Centre on May 28. Plans include adding new promotion programs for participating exhibitors and a ‘win your stay for free’ contest for attending retailers, all intended to give a little zing to the industry’s only national event. Our report is from Michael J. Knell

EDITOR’S LETTER LOOKING BEYOND A GOOD YEAR

8

8

PROFILE BEING A HELPING HAND

While it’s common for a Canadian furniture retailer to enthusiastically tackle charitable causes, it’s rare for one to function as both a fully operational, successful retail outlet and be a not-forprofit organisation dedicated to helping some of the community’s most vulnerable residents — the developmentally disabled — find jobs. As Ashley Newman reports, Island Furniture, of St. John’s, Newfoundland has been providing the community with quality furnishings since they began in 1979. But employing the disabled is their reason for being.

21

PRODUCT STRATEGIES BEDROOM: CHANGING STYLES WILL DRIVE GROWTH

30

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HGO merchandiser

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While the North American economy will remain challenged throughout 2016, bedroom producers are planning for a solid year by offering new construction and storage features with fresh designs and strong values. Our report was researched and written by Gary James.

30

ON RETAIL THE FIRST JOB IS CLARITY

It doesn’t matter if you’re the owner of an independent furniture store, or if you’re running a small furniture manufacturing operation – your first job is clarity. Everyone on the team has to know what the business stands for, what it’s committed to and what its promise is to the customer. Without that clarity, there’s failure. Wisdom from Donald Cooper.

CFS UPDATE CHARGING AHEAD AND ADDING SOMETHING NEW

39

BY THE NUMBERS FURNITURE STORE SALES: BACK TO WHERE THEY WERE

It may be difficult to believe but 2015 was the best year for Canadian furniture store sales this century, but it’s been a long climb back from the setbacks caused by the financial meltdown of 2008. What’s not known is whether the pace can be kept up in 2016 and beyond. Our review and analysis was written by Michael J. Knell.

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INDUSTRY CALENDAR & ADVERTISERS’ INDEX Michael Knell’s

HGO merchandiser HomeGoodsOnline.ca

SPRING 2016

Volume Five, Issue 1

✽ changing styles

PROMPT BEDROOM’S GROWTH

Furniture stores: 2015 was the BEST YEAR EVER

ISLAND FURNITURE: finding success as a helping hand

CFS: charging ahead with something NEW

ON OUR COVER: Designed by the award-winning Blake Tovin, the solid-walnut Serra collection was among West Bros Furniture’s best sellers last year. This king-sized platform bed with built-in storage did particularly well.

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HomeGoodsOnline.ca

5

EDITOR’S LETTER

HGO merchandiser SPRING 2016 • VOLUME FIVE, ISSUE 1

Looking beyond

MICHAEL J. KNELL

A GOOD YEAR

Canadian furniture stores had a pretty good 2015; in fact, it was the best year furniture store owners have had in this young century; the best in their history. However, it should be pointed out that achieving this milestone hasn’t really done us a lot of good.

D

ESPITE THE UPTICK IN SALES FURNITURE STORES HAVEN’T

gained ground when looking at other performance measures. For example, furniture stores account for about 3.2% of all retail store sales in this country – a ratio that hasn’t moved much over the past decade or so. Other retail sectors continue to outperform furniture stores, most notably automotive dealers who have proven to be the true beneficiaries of our low interest rate environment. In fact a case could be made that in many ways they get more out of low interest rates than does the housing market, which is highly regulated in comparison, forcing buyers to qualify for what they’re purchasing. It’s also interesting to note that both of Canada’s big, publicly-held furniture store chains haven’t been strong performers when compared to the industry at large. While all furniture stores achieved a growth rate of 6.1% in 2015; Leon’s Furniture saw its revenue climb by a relatively mediocre 1.0%. BMTC did better at 2.3%, but both were outshined by the 11.8% recorded by IKEA Canada. Leon’s and BMTC both saw their national market share shrink. The real question is what happens next? Will growth continue through 2016 and into 2017? I don’t like being a pessimist but I believe the rate of growth will slow this year and perhaps into next. Right now, the housing market is getting cooler everywhere in the country except the greater urban areas surrounding Vancouver and Toronto. No one knows where the price of oil is really going, making reasonably accurate forecasts about national unemployment levels, consumer spending, confidence and other key economic drivers difficult to say the least. But, as an old friend keeps reminding me, there are still people out there buying furniture, mattresses and major appliances. For the furniture store owner, that’s good news indeed.

Michael J. Knell Publisher & Editor [email protected]

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HGO merchandiser

ISSN 2291-4765

www.HomeGoodsOnline.ca PUBLISHER & EDITOR Michael J. Knell [email protected] MARKETING DIRECTOR Corrie-Ann Knell [email protected] MANAGING EDITOR Anthony E. Bengel [email protected] CONTRIBUTORS Donald Cooper Gary James Ashley Newman ART DIRECTOR Samantha Edwards Sam I Am Creative [email protected] IT DIRECTOR Jayme Cousins In House Logic [email protected] PUBLISHED BY Windsor Bay Communications Inc. P.O. Box 3023, 120 Ontario Street Brighton, Ontario K0K 1H0 T: 613.475.4704 F: 613.475.0829 Michael J. Knell, Managing Partner PUBLISHERS OF

HGO This Week Home Goods Online.ca

© 2016 Windsor Bay Communications Inc. All rights reserved. Windsor Bay Communications does not accept any responsibility or liability for any mistakes or misprints herein, regardless of whether such errors are the result of negligence, accident or any other cause whatsoever. Reproduction, in whole or in part, of this magazine is strictly forbidden without the prior written permission of the publisher.

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PROFILE

BEING A HELPING HAND

While it’s common for a Canadian furniture retailer to enthusiastically tackle charitable causes, it’s rare for one to function as both a fully operational, successful retail outlet and be a not-for-profit organisation dedicated to helping some of the community’s most vulnerable residents — the developmentally disabled — find jobs. At Island Furniture, providing the community with quality furnishings and employing the disabled is their reason for being. BY ASHLEY NEWPORT

Dave Martin, general manager of Island Furniture, first joined the independent retailer when it first opened in 1979.

T

HE APTLY NAMED ISLAND FURNITURE

has been serving the community of St. John’s, Newfoundland for over 35 years. Its journey has been more than interesting because it’s not just a furniture retailer that has stood the test of time, but because it’s a successful operation chiefly and steadfastly dedicated to fulfilling the mandate of its late founder, Paul E. Walsh: employing and finding gainful employment for developmentally disabled individuals.

Its unique origin demonstrates how creatively Walsh’s vision was able to grow and evolve even as the store’s financial situation and the Newfoundland economy changed over the years since opening its doors in 1979. “Mr. Walsh was a visionary and the father of a child with Down’s syndrome,” explains Dave Martin, the managing director of Island Furniture. “And he said that [developmentally disabled] people could contribute to society if given the opportunity. He started a manufacturing facility with government funds to hire disabled individuals.” While his son is non-verbal and has never been able to work, Walsh didn’t want to see other developmentally challenged people denied the opportunity to achieve something and give back to the world in a meaningful – and empowering – way. While the company was always intended to provide opportunities for developmentally disabled people rather than profit for himself, meaning Walsh had to rely on some young and rela-

The father of a son with Down’s Syndrome, the late Paul Walsh founded Island Furniture to be not just a successful, thriving business in its own right but to be a place where the developmentally challenged could find gainful employment and the dignity that comes with it. Before launching Island Furniture, he was a very successful businessman operating both Walsh’s Bakery and the Avalon Cable Company. He passed away in 1989, but his wife remained on the non-profit’s board of directors until she died in 2013.

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Top Left: Seen here is the entrance to Island Furniture in St. John’s, Newfoundland. Founded in 1979, it may be the only independent furniture, mattress and major appliance store in Canada owned and operated by a not-for-profit community organisation. Bottom Left: Island Furniture was the first retailer to open a La-Z-Boy Furniture Galleries in Newfoundland.

tively inexperienced young workers – including Martin – when he started out. “[Walsh and his people] went to Memorial University looking for business students with marketing majors to come on board to initiate a marketing plan. I was the least expensive option,” he recalls with a laugh. “I had no experience, but I was cheap.” For the first five years, the Island Furniture operated as a manufacturer, producing furniture for other businesses. While it was able to fully focus on fulfilling its mandate during those early years, eventually the government money that kept it expired, so a way had to found to grow the brand independently. “The first five years we were just a small-scale manufacturing company catering to local businesses. We got federal funding because we were providing jobs for a minority group, but when the funding was terminated, the only option we had was to become a profitable business,” Martin says. “We went into retail while we manufactured and that increased our margins. To grow more, we supplemented our products with products from other Canadian manufacturers. Then we decided to get out of manufacturing in the late 1990s.” Island Furniture is like any other independent furniture, mattress and major appliance retailer. The operation boasts three locations across the city of St. John’s – in addition to the Island Fur-

“Mr. Walsh was a visionary and the father of a child with Down’s syndrome. And he said that [developmentally disabled] people could contribute to society if given the opportunity.” niture store, it operates Newfoundland’s first La-Z-Boy Furniture Galleries store and Island Office Furniture, a supplier to the local businesses. The Island retail showroom boasts an impressive array of well-known Canadian and international brands, including appliances from General Electric; mattresses from Simmons, Tempur-Pedic and Zedbed as well as furniture from Ashley, Brentwood Classics, Durham, Jaymar, Magnussen Home, Superstyle, Crate Designs and Canadel, among others. Their assortment checks off most of the boxes on the typical Newfoundland consumer’s shopping list, from appliances to mattresses to furniture for both home and office. “From a business perspective, we represent all the major players,” Martin says. “La-Z-Boy partnered with us over 20 years ago [and we continue }

Above: Michael Power, who is developmentally challenged, has been a fixture at Island Furniture for the past 35 years. Indeed, general manager Dave Martin says he has become something of a celebrity in his home town of St. John’s and often greets customers before the sales staff. At Island, in addition to his janitorial duties, he often works in the warehouse, uncrating and wrapping furniture. HomeGoodsOnline.ca

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Island Furniture targets the upper-middle to lower high-end price points and sources product from a number of Canadian furniture manufacturers, such as Canadel, which anchors their casual dining assortment.

to operate] the first La-Z-Boy in-store gallery in Dave Martin notes that Newfoundland. We are a well-respected furniture to fulfil its mandate, store and we’re in the office furniture business too.” Island Furniture has Its office and commercial furniture unit proto be a fully functional vides pieces for all sorts of major businesses mainstream and across Newfoundland – such as oil company profitable furniture retail Husky – as well as schools, hospitals and senior operation that carries a citizen residences. broad array of desirable So while it’s hard to argue the company hasn’t consumer brands, found its footing in the ever-changing, challenincluding this Stressless ging and competitive furniture retail world, it’s gallery presentation important to remember it has never lost sight of from Ekornes. its original purpose: employing and finding jobs for the community’s developmentally disabled members. In short, Island Furniture gives money to the agency, It remains, despite its growth and admirable business acubusiness or charitable organisation that’s working with the men, a not-for-profit company. disabled individual to find him or her gainful employment. “We operate as a not-for-profit,” Martin explains. “We Once the employee is placed, the employer will pay the inmake money, but it’s what we do with our funds. Today, dividual for one year with funds generated out of Island Furwe’re a relatively big company doing $14 million in sales a niture’s profits. year and we employ approximately 45 people and operate “When we were just a manufacturing company that was out of four buildings in the city, but we’ve never lost sight forced to become a business, we knew we couldn’t be the beof the mandate to employ the mentally challenged. We’re all-and-end-all for [disabled people],” Martin says. “So we dea real business, but we’re there to create employment for cided to teach people to do what we do and we were prepared mentally challenged people.” to put our money where our mouth was. Thirty-five years ago, How does a genuinely profitable and successful company we used to institutionalize mentally disabled people. These function as a not-for-profit? It does so by creating opporpeople are now supporting the local economy.” tunities for the mentally disabled outside of its own vast While Island Furniture itself currently employs seven dewalls. Since 2000, Island Furniture has donated $5 million velopmentally disabled people, it ensures more vulnerable to a program that allows the company’s volunteer board of members of the community are employed by all the availdirectors to reach out to social agencies across Newfoundable stores, businesses and restaurants that can benefit land & Labrador to let them know there’s funding available from their contribution. to help find employment for developmentally disabled indi“We get people working in businesses across the provviduals and cover their salaries for one year. ince,” Martin says. “The person might not know what we’re “Once we find the job placement, we hope that individfunding him or her, but all the businesses are tapping into ual becomes a part of the team,” Martin says. “We do get Island Furniture’s funding. We take what money we need for some instances where the person gets laid off when the our growth and security and set aside money for our charitfunding stops.” able component. We operate as a business for our share- }

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Above: Bedroom is another key category for Island Furniture, featuring product from manufacturers such as Durham, Magnussen Home, Crate Designs and Ashley, among others. Left: The store’s appliance department features product from G.E.

holders — the mentally disabled. They’re paid competitive wages and given benefits and pensions. All are paid above minimum wage. We get some phenomenal stories. We have had people who have been institutionalized, and now they’re living independently.” One of Island Furniture’s stars is Michael Power – a developmentally disabled man who’s been with the company for 35 years. “I sometimes wish our sales people would talk to customers as fast as he does,” Martin jokes. “Michael is a celebrity in the city.” Another, crucial thing is Island Furniture taps into a disabled people’s desire to work. Employing a mentally challenged person isn’t just good for the local economy; it’s phenomenally beneficial to the individual. For many, the opportunity to work is the opportunity to be valued and involved. Working is social and empowering, imbuing a person – perhaps a person society was once quick to give up on – with confidence and a feeling of accomplishment.

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“These individuals bring smiles to the faces of consumer,” Martin says. “There’s a lot of value-added. They’re eager to come to work and they’re eager to please. They’re so excited to come to work. Newfoundland is well-known for bad weather and when we have a snow day, they are not pleased about missing work. They’re loyal and pleasant members of our workforce. That’s infectious and it’s spread amongst our staff. They’re front and center in our business.” With a mandate as compassionate and important as Island Furniture’s, it’s important the business side of the operation be just as nourished as the charitable side. Thankfully for the long-standing brand, it’s survived (thrived, really) by offering customers on-trend and in-demand products and maintaining a loyal customer base. It’s also benefitted from the cozy marketplace in which it has carved out its niche. “St. John’s is a small marketplace and we have a lot of competition, but we get our market share so we can continue the work of Mr. Walsh.” When asked if the company’s charitable side brings customers through the doors, Martin admits perhaps they’ve been guilty of not sharing its softer side enough. “People like our story, but we’ve been guilty of not sharing it,” he says. “We wanted people to buy the right product at the right price with the right service for the right reason and not out of pity. We never promoted it, but with the new age of social media, we’ve taken a second look. We know we need to tell the story. It gives our customers a good feeling to know they’re helping someone.” }

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“It’s the hope of the board to continue to educate and create opportunities for people. We’re seeing a lot of people become full-fledged employees who are fully funded by the employers we’ve placed them with.” Left: Bruce is a relative newcomer to Island Furniture, having only been on staff for the past five years. He is seen here in the company’s La-Z-Boy store, where he performs janitorial duties. Below: Among Island Furniture’s seven developmentally challenged staff members is Bob (first names are not always published), who has worked for the company for 30 years. Not only does he perform janitorial duties, he works in the warehouse wrapping and sorting furniture for delivery.

In terms of growth, Martin says the company’s fairly recent foray into the world of social media (they now boast a Facebook page) hasn’t shown much impact in terms of sales, but mentions they’ve tried more digital advertising. Since the world is steadily becoming more digitised by the day, it makes sense to expand ones advertising reach — especially in a challenging economic climate like Newfoundland. “The Newfoundland economy is slow right now, so we’re seeing fewer footprints in our store, but we’re blessed to be able to hold on to our mandate.” As for customers, Martin says second and third generation shoppers tend to frequent the long-standing retailer. In terms of the assortment they offered, it sits in the midrange to higher point price arena, satisfying customers who are looking for reasonably and appropriately priced highquality furniture. The company has also been a member of the Cantrex Nationwide buying group for close to 30 years. Martin knows the future of the furniture industry is challenging and change always lie ahead, especially with the emerging popularity of e-commerce. Whether they’ll make the leap to selling merchandise online, Martin says there are no plans to go that route at this time. “We’re not selling online as of now,” he says. “New challenges are facing us, such as [online furniture resource] Wayfair and our geography, as we have to import things to the island. But our customers need to buy their products locally.” Martin is always happy to talk about Island Furniture’s business. That said, he’s far happier discussing the opportunities his company creates, and will continue to create, for Newfoundland’s vulnerable and hard-working developmentally

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disabled community. “It’s the hope of the board to continue to educate and create opportunities for people. We’re seeing a lot of people become full-fledged employees who are fully funded by the employers we’ve placed them with.” Martin also mentions connecting people even more, especially in instances where a disabled employee needs a job coach to help him or her master a work routine. “It’s our profits that are engaging these other people [job coaches] and making this happen. The job coach comes from the government, so there’s public and private connectivity. The public sees us as a big business with a big storefront, but it’s what goes on behind closed doors.” Martin also says it’s a blessing to be able to do good work at work and not after-hours. “We work throughout our careers and at the end of the day; you might find time to do charity work. We’re blessed to do it each and every day. Michael [the disabled employee who’s been with the company for 35 years] loves his job. How often do you see people do that? We’ve touched the lives of over 500 people. Businesses need employees, so we’re asking them to give these individuals a chance.” HGO A regular contributor to HGO Merchandiser, ASHLEY NEWPORT is a Toronto-based freelance journalist who writes primarily for trade and business publications. Her specialties include food, hospitality and emerging social/business trends.

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1 The Canadian Furniture Show is the only national furniture show in Canada and a must-attend event if you are looking for great new products. Join us from May 28 to 30, 2016, and expand your business opportunities!

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This Show means business. You don’t want to miss it!

Star speaker David Chilton The Show is delighted to welcome star speaker David Chilton, well-known as a former “Dragon” on CBC TV’s Dragons’ Den and best-selling author of The Wealthy Barber, on Sunday, May 29, at 9 a.m. Join us for breakfast and an inspiring talk!

Great Activities! Industry Bash Saturday, May 28, 6 p.m. To wrap up the opening day of the Show and make the most of the mild weather, all Show participants are invited to party and network! On the menu: great BBQ specialties, drinks and a live band!

Canadian Home Furnishings Awards Gala

Extended hours on Sunday

The Canadian Home Furnishings Alliance will celebrate the Canadian industry on Friday, May 27, and honour some of its members.

Visitors will have the opportunity to tour the floor till 7 p.m. on Sunday, May 29; drinks will be offered starting at 4 p.m.

Town Hall meeting The third Town Hall will again be bringing industry participants together to discuss various issues. On Monday, May 30, at 8:00 a.m., come and share your opinion with industry professionals Coffee and muffins will be served!

May 28-30, 2016 The International Centre — Toronto, Ontario canadianfurnitureshow.com Facebook “f ” Logo

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Nicer Interior

Meubles Belisle

Collection Tuff Avenue

International Furniture Distribution Centre

LH Imports

Pink & Brown

Modern Life Home

G. Romano

C.J. Marketing

Mobican

Huppé

CDI Furniture

Trica

Dutailier

May 28-30, 2016 The International Centre — Toronto, Ontario canadianfurnitureshow.com Facebook “f ” Logo

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Come to the Canadian Furniture Show and mix business with pleasure by discovering Toronto in the spring. This great city has a lot to offer!

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Need more ideas? Visit seetorontonow.com

Mix business with pleasure: discover Toronto in May!

Major tourist attractions Major League Baseball with the Blue Jays: toronto.bluejays.mlb.com Visit the tallest structure in Canada, the CN Tower: cntower.ca

Play a little golf

Niagara Falls: niagarafallstourism.com

seetorontonow.com/ attractions/greater-torontoarea-golf-guide

Great places to eat Best restaurants: menupalace.com

Family outings

Restaurants with a view: seetorontonow.com/cuisine/5toronto-restaurants-with-aview

Toronto Zoo: torontozoo.com Ripley’s Aquarium of Canada: ripleyaquariums.com/canada

Best brunches: seetorontonow.com/cuisine/ wake-up-to-torontos-bestbrunch-spots

Fallsview Waterpark: fallsviewwaterpark.com

Budget-friendly restaurants: seetorontonow.com/cuisine/ budget-friendly-restaurants

Royal Ontario Museum: rom.on.ca Ontario Science Centre: ontariosciencecentre.ca

Shopping

Canada’s Wonderland: canadaswonderland.com (Canada’s largest amusement park)

Shopping centres and outlet malls: seetorontonow.com/ shopping/8-toronto-malls-tomake-a-day-of

Marineland in Niagara: marinelandcanada.com

May 28-30, 2016 The International Centre — Toronto, Ontario canadianfurnitureshow.com Facebook “f ” Logo

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PRODUCT STRATEGIES

An updated take on Shaker, Magnussen Home’s best-selling Pine Hill collection features a warm Rustic Pine finish on pine solids with aged iron hardware.

BEDROOM: changing styles

will drive growth

While the North American economy will remain challenged throughout 2016, bedroom producers are planning for a solid year by offering new construction and storage features with fresh designs and strong values. BY GARY JAMES

C

ANADIAN BEDROOM PRODUCERS ANTICIPATE THAT 2016

will be another solid year for the category, with consumers continuing to respond to strong values, fresh designs and added construction and storage features. While still likely to be outpaced by more fashion-forward segments such as upholstery and occasional, bedroom remains a core industry segment with steady growth and continuing opportunities. To grow their business, Canadian manufacturers are looking for creative new style niches to fill, as well as expanding their distribution by signing on additional brick-and-mortar accounts as well as new online merchants. In their home market, Canadian furniture producers continue to face strong headwinds. The nation’s economic output was either flat or in recession for large portions of 2015 — and that weakness is likely to linger into at least the first half of 2016. A major contributor to Canada’s slowdown has been lower capital spending in the oil sector, which impacts both resource-related investments as well as disposable income. The weakness of the Canadian } HomeGoodsOnline.ca

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Above: Inspired by Scandinavian design, BG Furniture’s popular Atelier collection is available in three wood species — solid maple, solid walnut and solid white oak. Right: BG Furniture’s Romanesque collection takes inspiration from classic Roman architecture. The group is available in 18 maple finishes with five hardware options.

dollar – commonly known as the loonie – versus other major currencies also has been a drag on growth. In 2015, the loonie had its second worst year on record, dropping 17% compared to 2014. The plunge has had one silver lining for Canadian furniture producers. It has leveled the playing field on pricing with foreign competitors. According to the Organization for Economic Development, Canada’s economic growth is expected to slowly reCover in 2016 and rise 2.3% in 2017. The drag from falling energy investment should fade away by early 2016, says OECD, while non-energy exports lead the subsequent pickup in growth. In the U.S. market, economic activity is expected to continue expanding in the 2% to 3% range. But uncertainties remain, with major events such as the November presidential election and the Federal Reserve’s recent decision to bump up interest rates for the first time in nearly a decade still unfolding.

NEW VALUE EQUATIONS

Powered by brisk sales of transitional designs such as its popular GrandVille collection, and strong retail placements of two new offerings – Romanesque, inspired by classical Roman architecture; and Atelier, a mid-century modern design with Scandinavian influences — BG Furniture enters 2016 with good momentum in bedroom. The solid wood specialist’s sales grew at a healthy clip from last fall to the end of 2015, with bedroom up “a significant amount,” company president Adam Hofmann reported.

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He expects 2016 also to be a good year for domestically produced solid wood bedroom, as Canadian retailers increasingly gravitate to locally-made products rather than the imports they might have bought in the past. “A few years ago, our price points weren’t as competitive with products from Asia and the United States,” said Hofmann. “Now, with what’s happened with currency rates, we are very close to import pricing and the playing field is much more level. This development has enabled us to take away floor spots from the imports, and led some import competitors to exit the Canadian market.” Bedroom now accounts for 47% of BG Furniture’s total business, up from 40% in 2014. In addition to the category’s stronger value proposition, BG also has been gaining new customers through its new delivery promise. The program vows retailers will receive orders within 20 working days or the freight charge is free. In addition, BG also offers a 12day, quick-ship service on two bedrooms and best-selling occasional and entertainment products – backed by the same pledge. The Walkerton, Ontario-based company rolled out the program in the summer of 2015 and, to date, has delivered 95% of shipments on time. “Our ability to ship custom-made products quickly has been a big plus for sales,” Hofmann said. “In this tough economy, if retailers get an order, they want to flow it to the consumer as soon as possible and get paid. It’s also an important selling point that retailers can offer consumers the ability to get a made-to-order product without a long wait.”

The Fulton group, including this dramatic, king-sized solid-oak poster headboard with poster canopy footboard was another hit for West Bros. in 2015.

BG’s recent decision to add full-extension, soft-close drawer slides to all case pieces also has been well received. Consumers are used to seeing this in their high-end kitchens – but in furniture it’s not that common, “so it enhances the perceived value, making the product more functional,” Hofmann believes, adding the drawer slides are backed by a lifetime warranty and that there’s no upcharge for the feature. Deeper drawer depths also are becoming more important, particularly for consumers with limited closet storage in their bedrooms. “In our research, we’ve learned that there’s a growing need, especially among women, for deeper drawers to store clothes,” he said. To keep up with consumers’ varying space needs, BG offers a range of piece sizes across each collection, including options for condo living. They also can build furniture to size by customer request, a service that accounts for 8% of its current business. Style-wise, BG is seeing the most activity right now in transitional. GrandVille, Nouveau and Chateau Philippe are among its strongest performers. In addition, new collections such as Atelier are expanding BG’s floor space, “since (mid-century modern) is a category a number of our retailers have not been presenting lately, and we’re also adding new retailers in urban centers who specialize in this style,” Hofmann said. In the coming year, BG plans to expand its mid-century offerings with additional bedroom pieces as well as introduce a dining room version of Atelier. Other new transitional bedroom looks also are on tap. BG will exhibit these new products

at the Canadian Furniture Show (CFS) scheduled for Toronto’s International Centre from May 28 to 30. The company also plans to make introductions at other times during the year that it will preview through in-store visits. While traditional designs are not as popular as transitional, BG saw an uptick in the classic category in 2015, according to Hofmann. “There still are certain areas of the country, and demographic groups, where upscale traditional looks such as our Diamond Anniversary collection are what’s selling.” Going forward, he said, BG is going to focus on betterquality, higher-end furniture. “That’s where we have the most strengths, and where our capabilities with craftsmanship and customization really shine.” To expand its reach in the higher-end segment, BG plans to introduce a greater selection of alternate species in the coming year — either as stand-alone collections or as options with current designs. “We’ve been sticking mostly with maple and ash but we’ve been getting more requests for other woods such as walnut and mahogany. Retailers tell us that they have a number of clients who are willing to pay more for exotic wood species.” Hofmann added that BG is not a “major exporter to the U.S.” but is considering ways to expand its presence there over the next few years. On the marketing side, BG is weighing the pros and cons of adding pricing detail to its web site. “A growing number of furniture retailers are doing this } HomeGoodsOnline.ca

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Left: Setting the pace for Huppé’s flagship line, called Up, in 2015 was Plank, the centrepiece of which is this eye-catching fabric bed with extended headboard in a geometric panel design. Below: Linea, another collection in Huppé’s Up line, combines floating solid-walnut cases with a shapely, two-panel fabric headboard.

in response to the availability of pricing on major e-commerce sites such as Wayfair,” Hofmann said. “Our industry has been slow to adopt this but it’s something that many consumers want. With consumers doing more research online, brick-and-mortar retailers will to have to become more transparent about pricing on their web sites.” Eventually producers may need to post this information as well, he added.

FRESH STYLES STIR SALES

At West Bros Furniture, the bedroom business started off steady in the first half of the 2015 then grew more rapidly in the second half. During the year, the company expanded its reach in both Canada and the United States, the brand “becoming increasingly popular” in both markets, according to Samantha Mund, a customer service/sales executive. “We hear time and again that our customer has grown with our (style) changes,” she said, adding, “When we first introduced our more mid-century modern influenced collections, there was a real concern our existing dealers would not be able to make the leap with us. We were ahead of the trend (but) this has really helped us grow and build our overall customer base.” Noting the Hanover, Ontario-based producer has plans for an ambitious 2016, Mund said “we have  made significant investments in production to allow us to provide quicker turnaround times  and set up between collection runs.  Although we tend to be cautiously optimistic, we anticipate this wave of business to continue and grow through the next eight to ten months.”  Helping to drive West Bros’ success in the bedroom category have been several contemporary and transitional collections created by Blake Tovin, the company’s Nyack, New York-based award winning design partner. They include Serra, in solid walnut; and Jensen, a solid-cherry design. “Our walnut collections continue to be very strong,” Mund says. “The Serra collection offers a deep assortment of bedroom, occasional  and workspace pieces.  It has been one of our best sellers and it continues to be extremely strong.” The Jensen collection, a top finalist for the Contemporary Design Group’s Edward Haimsohn award in 2015, also has been a good performer. “The Jensen bedroom collection offers a contemporary elegance that features soft-close doors”

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— a new feature for West. “With the asymmetrical doors and drawers, the Jensen case pieces offer an understated elegance that especially speaks to the urban consumer.” West’s contemporary-styled, white oak Fulton bedroom and dining collection also continues to do well. Details such as re-sawn doors and headboards and leather pulls “make it a collection that sets us apart on the floor,” Mund said. “Customers continue to seek out unique statement pieces and our collections offer that with the practical functionality people need.” One such statement piece, she said, is the Fulton media cabinet. It offers a pull-out shelf that is designed to function as a desk, a door with adjustable shelves, drawer storage and a drop-down media drawer. “It can be used in many different ways and that really allows the customer to justify the room space,” said Mund. “With many homes now with  walk-in closet storage,  the dresser has to be more than just storage.  Beautifully designed multi-function pieces help create a room that transcends the typical ‘living room’ or ‘bedroom’ into rooms that enhance our customer’s lives.” According to Mund, West’s ability to offer options within collections also is a key selling point. The company’s Phase and Serra collections offer customizable beds — in wood or upholstery, with or without storage — as well as several choices of complementing case pieces and many fabric and finish choices. “This upfront customisation allows the consumer to build their bedroom the way they want it,” Mund said.

STRENGTHENING RETAIL PARTNERSHIPS

At Huppé, bedroom continues to account for the largest segment of its business. While the category’s growth in 2015 was a bit lower than that of other newer categories, such as dining room, bedroom remains a “bread and butter

focus that we’re always looking to improve and expand,” explains Joël Dupras, the Victoriaville, Quebec-based manufacturer’s design director. “In 2016, we plan to build on the strong momentum we created in 2015 by introducing new products and opening new accounts,” Dupras said. “We’re also working hard on developing new marketing tools to help our retailers grow, such as our Atelier gallery program.” Introduced in 2014, the Atelier gallery program is a coordinated presentation of Huppé products that work together across every room of the home. A typical display might include two Huppé bedroom groups, along with a dining set, home office and media system, with accessorisation and display techniques similar to what the company does in its High Point Market showroom, which can be found at 220 Elm. “In 2015, we opened Atelier in several new stores in Canada and plans call for more units in 2016,” said Dupras. “In the coming years, we also plan to expand the program to the U.S. We’ll take it slowly, ensuring that we have the right retail partners and product mixes in each market we enter.” In the main portion of the Huppé line, the current bestselling bedroom is Plank. Introduced in late 2014, Plank is a birch design with a fabric-covered, four-panel headboard that extends beyond the bed surface. Other strong sellers in bedroom include the Surface collection, another modern design in birch. Leading the way in the more upscale Up line during 2015 was Kosy, a soft, curvy modern collection created by the award-winning designer Karim Rashid. This collection combines white oak with soft leather, while the dressers and side tables feature lacquered and acid-etched glass tops. Also doing well in the Up line was Linea, a walnut design with a two-panel fabric headboard. “Our collaboration with Karim Rashid has been very good for the Huppé brand,” Dupras says. “It’s created attention in the media and opened new doors for us within the higher-end retail community. We’ve placed the collection with some stores we hadn’t been working with before and, based on the success of this group, they’ve added other Huppé products as well.” For 2016, Huppé has three collections it is working on. Two of the collections will debut at the April edition of the High Point Market and other will come out later in the year. The new groups will also be featured at CFS. “We’re looking at the latest trends in industrial and midcentury modern and updating them,” Dupras says. “With everything we do, we try to be unique and different.” At the April market, Huppé also will unveil a more robust website. The new site will be fully responsive for easy viewing on a range of mobile devices, including smartphones and iPads.

cautious and will be closely watching for potential interest rate hikes and the impact of the federal election.” With the value of the loonie dropping to historic lows, the “value proposition that Canadian retailers are looking for in furniture also has changed,” Cressman added. “We’ve adjusted our strategy to add new features and functions that create a more compelling value across our entire line.” Looking back on 2015, Cressman sees several standouts on the bedroom side of Magnussen’s business. They include Pine Hill, a sophisticated urban pine collection with aged iron hardware; and Calistoga, a traditional pine group in a distressed charcoal finish inspired by the inns and wineries of Napa Valley. In addition, two groups introduced at the October High Point Market – Davenport, a romantic traditional design; and Hancock Park, an updated cottage group – also show strong promise for the coming year. Price wise, Magnussen is seeing the most action in fourpiece bedrooms priced from $999 to $1,999 retail. “Whatever the price point, consumers need to see a strong value,” Cressman noted, adding the company’s introductions at the October market were designed “to shore up” its starting price points with an enhanced level of fashion, including a few select “lipstick pieces.” The new Hancock Park collection, for example, includes a “great media chest with glass doors,” said Cressman. At this year’s April and October High Point markets, Magnussen Home plans to introduce 10 to 12 new bedroom groups. “We’ll cover a wide variety of key styles and continue to offer retailers the sharp values they need to attract consumer attention. We’ll take a fresh approach to styling while still being accessible and not too far reaching – offering classic silhouettes with a twist along with mid-sized scaling, rich finishes and plenty of storage.” In many collections, Magnussen also will be emphasising “wood and the value of seeing the solids and material usage,” said Cressman. “Getting credit for it is a big deal.” } Magnussen Home expects Davenport, a new romantic traditional collection introduced at the October High Point Market, to be a strong seller in 2016.

ENHANCING FUNCTION, FEATURES

While 2015 proved to be a challenging year for many bedroom resources, Magnussen Home still had “good growth,” said Nathan Cressman, president of the New Hamburg, Ontario headquartered company. “And we’re forecasting more growth for the first six months. That said, we’re still being HomeGoodsOnline.ca

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Also playing a key role in bedroom success in 2016 will be service and support. To help flow goods quickly, Magnussen Home offers its QuickFlex container program. With QuickFlex, retailers can obtain expedited quick-ship service on orders as small as 250 cubic feet – about two or three bedroom groups. Customers can select from as many as 25 styles per order and have the products delivered within 30 days to stores the West Coast or 45 days to those on the East Coast. “The program makes it much easier for customers to buy from us,” said Cressman. “It reduces the dollars dealers spend on inventory and ensures they get top-selling items quickly.”

EXPANDING HORIZONS

While the weakness of the Canadian economy continues to hold back consumer spending, 2015 also was a solid year for master and youth bedroom producer South Shore Furniture. A Sainte-Croix, Quebec-based specialist in ready-toassemble furnishings, the family-owned company offers a wide range of stylish bedroom furniture positioned at the entry level price points. “When people are tightening their budgets, they want to make the most out of every dollar,” said Jean-François Toulouse, category manager for South Shore. “We offer an affordable, attractive way for consumers to get the new bedroom furniture they need without breaking the bank.” As the Canadian dollar has slumped, the value that South Shore offers has become even more compelling, Toulouse added. “Imports have become more expensive, and the gap between the price of our top offering and the wood veneer products coming from offshore has widened. We expect this to continue in 2016.” Because of this shifting price picture, South Shore has been able to enhance the styling of many of its bedroom products to include more step-up features such as decorative molding and wire management. “In the past, if we put too much into the product, the pricing would no longer be competitive. But now, due to the currency situation, we have more room to operate.” In 2015, contemporary was the number one-selling style category, followed by country and traditional. Dark tones of black and brown with strong wood grains such as oak were strong sellers, and reclaimed looks also were hot. For 2016, Toulouse said, South Shore has identified five key style trends as particular growth opportunities -- farmhouse, glam, mid-century modern, coastal and classic modern.

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Left: A contemporary look with chic appeal, South Shore’s Gloria collection features massive lines, a rustic wood finish and two built-in lights on the headboard. Right: In the traditional category, South Shore had good success with Versa in 2015. Available in Weathered Oak (shown), Gray Maple and Ebony, the collection’s style features include a decorative grove that creates the illusion of double drawers.

“We saw a lot of glam looks in both contemporary and traditional at last year’s markets, and we think there may be an opening for us to do something in RTA,” said Toulouse, adding South Shore may introduce a group with a lot of bling when it returns to the High Point Market – after an absence of several years – at the April market. South Shore also plans to expand its mid-century modern offerings. “We launched our first mid-century modern group two years ago and it’s done very well. It’s a look that people pay hundreds and hundreds of dollars for at an antique store that we can offer at a much more affordable price,” Toulouse said adding the new collection may feature a lighter finish, giving it a fresh, updated look. Also on tap for April is a new coastal-styled adult bedroom in a new Winter Oak finish. “We already have a strong group in our juvenile line and the coastal trend seems to be moving into adult bedroom now, too.” In 2016, South Shore expects to continue growing its online business, both with e-commerce specialists as well as traditional brick-and-mortar stores that are expanding their digital presence. “More and more retailers are doing business through a web site,” said Toulouse. “Drop-shipping product is becoming easier, and they are recognizing that a growing number of consumers want to buy furniture this way.” With this trend in mind, a number of brick-and-mortar stores also are expanding their in-store RTA assortments. “We’re doing business with a number of leading retailers who never used to offer RTA,” said Toulouse. HGO A regular contributor to Home Goods Online, GARY JAMES is a freelance writer based in Chapel Hill, North Carolina. He spent over 20 years with Furniture/Today, serving as case goods editor and special projects editor, directing the editorial content of Leather Today, Bedding Today, Global Textiles Today and other supplements and sections.

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ON RETAIL

THE FIRST JOB IS CLARITY BY DONALD COOPER

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It doesn’t matter if you’re the owner of an independent furniture store, or if you’re running a small furniture manufacturing operation – your first job is clarity. Everyone on the team has to know what the business stands for, what it’s committed to and what its promise is to the customer. Without that clarity, there’s failure.

W

hen we were kids our grandmothers were a great source of warm cookies, wonderful hugs and, if we were lucky, wisdom that has guided us for a lifetime. In my family, when we weren’t communicating effectively and things weren’t getting done, Grandma Cooper would say: “We need to get everyone singing from the same hymn sheet.” Grandma never ran a business but she nailed business leadership and management in one sentence. The problem is that in most businesses, everyone is NOT singing from the same hymn sheet. In fact, in many businesses there is no ‘hymn sheet’ (that is, no clarity). Or, if there is one, it’s seen only by the top two or three people in the organisation and they think it’s nobody else’s business to see the secret ‘hymn sheet’. So, there is a huge lack of ‘clarity’.

In every business there are two groups of employees. There are promise makers and the promise keepers. The promise makers are typically the folks in sales, marketing and advertising. They make promises to your target customers to lure them into doing business with you. Then, just about everyone else is a promise keeper. They’re the ones who have to deliver on your sales pitch, your brand promise, your performance guarantees and your advertising claims. And when you fall short, the question is did your promise makers ‘over-promise’ or did your promise keepers ‘under-deliver’ and, just as importantly why? Do your promise keepers even know what the ‘promise’ is and are they actually empowered to deliver it? Are they all singing from the same ‘hymn sheet’? Look very carefully at the product, performance and service promises you make in your business. Be sure your } HomeGoodsOnline.ca

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So, ‘clarity’ is our first job. If we as the owners, leaders or managers are not clear about these five things, who else in the business could it possibly be? Nobody. And without clear commitments, there can be no accountability. Lack of clarity and accountability are two of the biggest problems in many businesses today. Realistically, how would you rate your business on each of the ‘five clarities’? Is this all just airy-fairy stuff or is there some real bottom-line payoff here? An 11-year survey of 207 companies – documented in a book called Corporate Culture and Performance – clearly showed businesses that committed themselves to a clear purpose averaged 570% higher gains in earnings! Apparently, clarity matters.

CLARITY: THE FIRST STEP TO HAVING A LIFE

promise keepers know exactly what those promises are and the importance of keeping them. Then, be sure they have the information, the tools and the empowerment to deliver on every promise.

THE FIVE CLARITIES EVERY BUSINESS NEEDS

How do you, the independent furniture store owner get everyone on your team singing from the same hymn sheet? The answer is ‘clarity’ – whether the business is large, small, or just starting out, the owner’s first job is to be clear about five things:

1

The compelling customer value and experiences we commit to always deliver. Value and experiences that will ‘grab’ the target customer, clearly differentiate us from the competition, make us ‘famous’ and grow the bottom line;

2 3 4 5

What the business commits to becoming over the next three to five years (the vision);

How we’ll get there (the business plan); The extraordinary bottom line we commit to generate; and,

How we commit to behave along the way (our values, ethics and standards).

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Clarity isn’t just something we need to make our business successful. Without ‘clarity’ we’ll never have a life outside the business either, because the need to be everywhere every minute to micro-manage everybody and everything will be overwhelming. Without clarity we have to make all the decisions – and those decisions are likely be all over the map because we, ourselves, lack the clarity and focus needed to be consistent. On the other hand, when we and everyone in the business are clear about the five things listed above, we’re ‘there’ even when we’re away. We’re there in spirit. Our clarity is there for the team to act on and the business owner, manager and leader is able to have a life. How great is that? How is there clarity in your business? Does everyone on the team know for absolutely sure what the business commits to deliver; what it commits to become and how everyone is commited to behave? Is there a shared commitment to excellence? Do they know why their particular role is important in the overall picture? More importantly, do they understand the impact on the customer, the organisation and the bottom line if they screw up? Only when this level of clarity is achieved can everyone on the team fully participate in growing the business. Set aside a few hours in the next week to sit down with the best minds and hearts on your team and create these five clarities for your business. Then make sure everyone on your team knows what those commitments are, why they’re important and how their job relates to and affects each one of them. As the business owner, manager and leader, creating ‘clarity’ is your first job – and changes everything. HGO A regular contributor to Home Goods Online, DONALD COOPER, MBA, has been both a world-class manufacturer and an awardwinning retailer. Now a Toronto-based business speaker and coach, he helps business owners and managers rethink, refocus and re-energize their business to create compelling customer value, clarity of purpose and long-term profitability. For more information, or to subscribe to his free, monthly management e-newsletter, go to www.donaldcooper.com

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CFS UPDATE

Charging ahead & ADDING SOMETHING NEW

The organisers of the Canadian Furniture Show are adding a few new wrinkles to the 2016 edition, including adding new promotion programs for participating exhibitors and a ‘win your stay for free’ contest for attending retailers, all intended to give a little zing to the industry’s only national event. BY MICHAEL J. KNELL

I

T’S NO SECRET THE QUEBEC FURNITURE

Manufacturers Association (QFMA) is in the midst of an all-out effort to rebuild what’s now called the Canadian Furniture (CFS), which since it was founded in 1972 as been this country’s only national furniture industry event. The 2016 edition will be held, as always, at the International Centre in the Toronto suburb of Mississauga, Ontario and a stone’s throw away from Pearson International Airport. Most people inside the industry are surprised to learn that despite the setbacks it has suffered in recent years, CFS is still one of the largest trade shows of any kind held in Canada STEVEN SABADOS

DAVID CHILTON

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each year. Last year – the first held under the Canadian Furniture Show banner (for the previous 15 years or so, it was known as the Canadian Home Furnishings Market) – it hosted a total of 242 exhibitors, including ten ‘outside showrooms’ located throughout the city as well as the 38 permanent showrooms of the International Centre’s SOFA annex (Source of Furniture & Accessories). These ‘outside showrooms’ were operated by a number of industry heavyweights including five major upholstery houses, including Superstyle – along with sister companies Trend-Line and Simmons Upholstery Canada – as well as Décor-Rest, Jaymar, Campio and Brentwood Classics. The exhibitors on the floor of the International Centre included 49 Canadian furniture manufacturers – 19 of them from Quebec with the balance coming from across the rest of the country. Among them were Palliser, Huppé, Dynasty Furniture, Chairtech, Trica, El Ran, Amisco, Durham and Canadel. And, with the exception of Palliser, all are expected to return in 2016. Also on the floor were 17 mattress resources, including Zedbed, Springwall Sleep Products, Magniflex and a host of other players offering every important bedding category. In an important evolutionary step from earlier year, CFS also hosted six major appliance suppliers including Electrolux, BSH, Aga-Marvel and Fisher & Paykel.

CFS SETS DATES THRU 2020

Earlier this year in a move to demonstrate its commitment to the future of CFS, the QFMA announced show dates through to the year 2020 – something they’ve never done before. “The industry has told us loud and clear that the Canadian Furniture Show is not a nice-to-have, but a must-have,” CFS president Pierre Richard said in making the announcement. “In order to allow for multi-year planning, we are pleased to announce the show dates through to 2020.” The show will held on essentially the same weekend for the next five years and will run from May 27 to 29 in 2017; followed by May 26 to 28 in in 2018; May 25 to 27 in 2019; and May 23 to 25 in 2020. When Richard took over as CFS/QFMA president in late 2013, he said the association was launching a three-year plan to revitalise the market – something that may have caused unwarranted speculation in some quarters of the industry. However, Richard maintains the event – which is also one of the oldest and largest trade events currently held in Canada – will continue beyond the third year, 2017. “I assure you that our team and the board of directors is fully committed to the success of the Canadian Furniture Show and that we will continue to deploy the necessary efforts to ensure the show’s success and sustainability for years to come,” Richard said, adding that’s why

it was important to announce the show dates through 2020. It also means improvements and changes will continue to be made as needed and warranted. “In today’s changing world, stagnation is a recipe for failure,” Richard said. “That is why we will continue to evolve the show by listening to our participants’ wants and needs and by adapting the best practices of the trade show world to our reality. This is and will continue to be our modus operandi for the years to come.”

THE SURVEY SAID

In the days and weeks following the 2015 event, the QFMA conducted some 221 telephone interviews with show participants including 87 exhibitors and 134 trade buyers – a process that revealed some insights into how the event is seen and how it was used. Perhaps one of the more interesting questions asked of the buyers was the most telling: how long do they visit the show, including the outside showroom. Some 40% attending CFS for two days, with 31% saying their visit was one day long. Only 20% said three days while 9% said four days. This meant the typical buyer sent 2.8 days at CFS. “With 91% of buyers surveyed saying they spend three days or less in Toronto for the show, the show team decided to plan for a three-day show in 2016,” the association said. }

Above: Overlooking the display in Hall 5 of the International Centre during the 2015 edition of the Canadian Furniture Show. Opposite page from left to right: Steven Sabados, television celebrity and designer will return to the Canadian Furniture Show at 1pm on opening day with a presentation on what’s hot, what’s not and what’s timeless in the world of interiors. David Chilton, author of The Wealthy Barber and former member of the Dragon’s Den on CBC television will give the show’s keynote address on Sunday morning, beginning with breakfast at 9am in Hall Five.

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Cantrex Nationwide, Dufresne Retail Solutions Group and Mega Group.

HERE’S A LITTLE OF WHAT’S NEW FOR 2016

Exhibitors at the 2015 Canadian Furniture Show estimated total trade attendance, including retail buyers as well as interiors designers and decorators at about 4,000 – a number about on par with the prior year.

This year’s event will be a three days long, opening on Saturday, May 28 and closing on Monday, May 30. The question wasn’t asked after 2015, primarily because of the Consumer Day experiment (which was tried last year and has since been dispensed with) that was held on Sunday, the last day of the show. But in 2014, 163 visitors were asked what their favourite day was to attend CFS. By a large margin, 61% said Sunday, with 47% replying Saturday and 40% saying Monday. Until 2014, the show had a Saturday to Tuesday schedule. To accommodate Consumer Day on Sunday, the first edition of the newly-named CFS went from Thursday to Sunday. This year, the association is going with Saturday to Monday, the top three days as identified by the industry. But the big question after every Toronto market has always been – whether you’re asking an exhibitor or an attending retailer – “are you coming back next year?” According to the CFS management team, which is led by CEO Pierre Richard, 85% of the 84 exhibitors surveyed after the 2015 said they would ‘definitely’ (31%) or ‘probably’ (54%) return. Only 13% said ‘probably not’ while 2% said ‘definitely not’. Of the 131 buyers who were asked, 94% said they would ‘definitely’ (53%) or ‘probably’ (41%) be found walking the halls of the International Centre this year. Only 5% replied ‘probably not’ with a miniscule 1% saying ‘definitely not’. “With 85% of exhibitors surveyed saying they will definitely or probably participate in the 2016 show and 94 % of buyers surveyed saying the same thing, we believe the show is an important event to our industry,” the organisers believe. While the QFMA didn’t release exact attendance figures for 2015, most exhibitors pegged the number of attending retail buyers at between 1,800 and 2,100 with total trade attendance, including interior designers and decorators, at about 4,000. For the past decade or so, retail attendance has been driven in large part by the three buying groups –

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The CFS management team has launched several new initiatives in support of this year’s event. For the first-time ever, the show is holding a registration competition, offering the winners a two night free accommodation package if they sign-up on or before April 24. In all, some 25 packages will be awarded with the winners announced during the All Industry Bash, to be held in Hall 5 of the International Centre at the end of the opening day on May 28. Each package is valued at $500. For participating exhibitors, CFS organisers are planning to publish one-page e-flyers where each company can feature anywhere from one to four show specials they are offering in their space during the show. These e-flyers will also be posted on the CFS web site and will be promoted on its various social media platforms, including Facebook, Twitter and Pinterest. Between February and opening day, participating exhibitors are also being offered to submit product pictures (with supporting material) for the CFS web site’s new ‘Great Finds’ page. They are also being promoted on CFS social media sites. For the first time, the organisers will have a business lounge. At press time, the exact location hadn’t been fixed, but it will be somewhere on the show floor and is designed for more private business discussions with a common area and place to eat as well as a few small meeting rooms.

CHILTON AND SABADOS TO SPEAK

Also on tap will be presentations from two well-known Canadians. First up will be designer and television personality Steven Sabados, who will give a new presentation for attending retailers, designers and suppliers on what’s hot, what’s not and what’s timeless in the world of interiors, along with an update on his S&C furniture brand. His presentation will take place on the first day of the show – Saturday, May 28 – at 1pm. “I’m so excited to be returning to the Canadian Furniture Show to not only showcase the latest S&C furniture but also share what’s new in colour, fabric and profile,” Sabados said. He will be followed by following on Sunday morning (at 9am) by David Chilton, formerly of CBC-TV’s Dragon’s Den but perhaps better known as the author of The Wealthy Barber. Show participants will be invited for breakfast and to hear Chilton’s inspirational presentation, followed by a book-signing session, as a few hundred audience members will receive a copy of his latest book. HGO Michael J. Knell is the publisher and editor of Home Goods Online and all of its platforms. He has attended every Canadian Furniture Show since 1987.

BY THE NUMBERS BMTC Group, operators of Brault & Martineau, EconoMax and Ameublement Tanguay (whose store in Lèvis, Quebec is seen here) is the junior member of the top three furniture stores in Canada.

FURNITURE STORE SALES:

back to where they were

It may be difficult to believe but 2015 was the best year for Canadian furniture store sales this century, but it’s been a long climb back from the setbacks caused by the financial meltdown of 2008. What’s not known is whether the pace can be kept up in 2016 and beyond. BY MICHAEL J. KNELL

I

T WAS A LONG TIME COMING, SIX YEARS IN FACT FOR

Canadian furniture stores to climb back to where they were when the economy went sideways in 2008. That finally happened in 2015. What many people inside the industry don’t realise is furniture store sales actually grew in each of the past four years, beginning in 2012. Furniture stores – which Statistics Canada defines as brick-andmortar retail establishments whose sales of furniture, including mattresses, account for at least 51% of its annual revenue – across the country had sales of $10.7 billion in 2015, 6.1% higher than the $10.0 billion recorded for 2014. Indeed, this was a new record high, smashing the $10.2 billion mark set in 2008. Indeed, 2015’s annual growth rate of 6.1% hasn’t been seen at all in recent years and was the result, most pundits agree of a number of external economic factors including a buoyant housing market in British Columbia and Ontario, combined with continued low interest rates and the Canadian consumer’s apparent willingness to take on record levels of debt. } HomeGoodsOnline.ca

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IKEA Canada is one of the fastest growing furniture retailers in the country. Last year, as part of its plan to double it sales over the next decade, it has opened six pick-up and order points across Ontario and Quebec, including the one in Quebec City seen here. These small-scale stores are to enable quicker service for those customers ordering product online with the promise of better service and less costly and more efficient delivery.

The Brick was one of this country’s largest f acquired by Leon’s in March 2013. Seen

Furniture stores also showed themselves to be one of the fastest growing retail sectors tracked by Statistics Canada in 2015. Indeed, most economists noted retail itself was a key driver of the overall Canadian economy last year. Growth in what the agency describes as location-based retail helped offset declines in other sectors such as oil production and other resource-based commodities. However, it should be noted furniture stores didn’t carve themselves a bigger piece of the retail pie last year. Their share of retail store sales remained at a steady 3.2%, with Statistics Canada reporting all retail store sales – less the automotive sector – climbed 3.6% to $332.4 billion in 2015. As has been customary over the past few years, the auto sector (including new and used car dealers plus automotive parts and service) was retail’s growth leader with sales of $128.3 billion, up 7.1% over the $119.7 billion rung-up in 2014. Another factor many observers believe helped boost overall retail was the declining cost of gasoline, with gas station revenues falling 14% last year – reflecting the drop in world oil prices to levels not seen in over a decade.

REGIONALLY SPEAKING

An analysis of the data published by Statistics Canada reveals some 89% of all furniture store sales are made in four provinces: Quebec, Ontario, Alberta and British Columbia, which not coincidentally are the four largest provinces in terms of both population and economic power. Ontario, this country’s largest province in terms of both population and size of economy accounted for 37.3% of all

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furniture store sales in 2015 – which is fairly close to its average share-of-market over the past few years. Every major player on the furniture retailing scene, with the sole exception of BMTC Group, has a presence in Ontario. Last year, Ontario furniture stores had sales of $3.97 billion, a 9.6% advance over the $3.64 billion sold in 2014. This was unsurprising to most observers who noted Ontario is one of the two really hot housing markets in Canada that has seen at least some of its manufacturing capability bounce back over the past year or two, thanks to a weakened Canadian dollar that dropped to flirt with the 70-cent U.S. mark for much of the latter half of 2015. Quebec furniture stores grew at a considerably more modest rate of 1.2% in 2015, with sales of $2.51 billion. In a note to shareholders, BMTC’s long-time chairman, president and chief executive officer, Yves Des Groseillers explained the situation this way: “In spite of a difficult economic context, the Québec economy has seen a slight growth in 2015. The loss of thousands of jobs in Québec as well as government austerity measures caused a slowdown in consumer spending. In fact, 2015 was the worst year since 2010 for bankruptcy filings in the retail industry.” Despite this, Quebec furniture stores accounted for 23.6% of all sector sales last year. This is down slightly from its historic share-of-market and can be attributed to the simple fact Quebec’s economic growth continues to lag behind that of the rest of the country. Even though the world price of oil collapsed last year, forcing the province into an economic malaise, Alberta fur-

Leon’s Furniture remains Canada’s largest furniture store chain. It operates two competing retail groups. One operates under the Leon’s banner, such as the store in Brampton, Ontario (seen here) and the other under The Brick.

furniture store operations even before it was n here is its store in Brampton, Ontario.

niture store sales actually eked out a 1.5% improvement in 2015, ringing in at $1.55 billion. Albeit that’s down from the prior year’s growth rate of 7.3% and is a reflection of the province’s declines in employment, housing and other key drivers of the economy. Alberta accounts for 14.5% of all Canadian furniture store sales. The growth leader among furniture stores last year were those in British Columbia who had collective sales of $1.48 billion in 2015 – a 13.8% gain over 2014’s $1.30 billion. Collectively, furniture stores in these four provinces had sales of $9.52 billion in 2015, up 6.1% from the $8.97 billion in 2014. Meanwhile, furniture store sales in the remaining six provinces totalled $1.14 billion last year, up 5.7% over the $1.08 billion rung-up in the prior year.

THE BIG THREE

Furniture store retailing is dominated by three players, two of which are publicly held and the third is the Canadian arm of what is probably the only truly global home furnishings retailer: Leon’s Furniture, IKEA Canada and BMTC Group. Collectively, they accounted for an estimated $4.90 billion in sales last year, up 4.7% from $4.68 billion the year before with a firmly entrenched market share of 46%. That amount is staggering when it’s the top three U.S. furniture stores have a collective market share of just over 20%. The publicly-held and family managed Leon’s Furniture became the number one-ranked furniture store in Canada

when it acquired its arch-rival The Brick in March 2013. Since then, it has run the banners as separate and competing businesses while striving to find cost efficiencies behind the scenes. Sales last year totalled $2.41 billion, which was an extremely modest gain of 1.0% over the $2.38 billion recorded for 2014. Not only has it posted the slowest growth rate among the top three, Leon’s almost surrendered a small piece of market share, dipping from 23.7% in 2014 to 22.6% in 2015. Earlier this year, the company took over the leases of eight Sears Home locations across the country, including four in the Greater Vancouver Area, where it finally has a beach head in British Columbia for its Leon’s banner. These stores are expected to come online by the end of September. The fastest growing member of the big three is IKEA Canada, which is aggressively expanding its presence across the country. For the 2015 fiscal year, IKEA had estimated sales of $1.79 billion, up 11.9% from $1.60 billion the previous year. It was also only one to increase market share which was approximated at 16.8% in 2015, up from 15.9%. The Canadian division of the international home furnishings giant, which is based in The Netherlands, announced in early 2015 that it intends to double its annual revenue over the next decade. The first move in that effort has been the construction and opening of six smaller scale stores that it calls pick-up and order points. These are located in smaller cities where one of its full-size stores can’t be found. They serve as a place for local customers } HomeGoodsOnline.ca

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CANADIAN FURNITURE STORE SALES 2007 TO 2015 In current Canadian dollars (billions, unless otherwise noted)

Sales Percent change

2007

2008

2009

2010

2011

2012

2013

2014

2015

10.04

10.17

9.47

9.68

9.47

9.53

9.7

10.04

10.66

1.2

-6.8

2.2

-2.3

0.6

1.8

3.6

6.1

Sources: Statistics Canada; J.C. Williams © Windsor Bay Communications (2016). All rights reserved.

to pick-up product ordered over its web site or through its catalogue. Each also has displays of its most popular product offerings, particularly furniture. It also announced it will build its 13th full-size store in Halifax. Construction is slated to begin this summer and it’s expected to open in the third quarter of 2017. BMTC Group, the publicly-held operators of Brault & Martineau, EconoMax and Ameublements Tanguay, rounds out the big three with sales of $717.3 million in 2015 – a 2.3% advance over the $701.5 million for prior year. Despite the sales gain and probably because it operates solely in Quebec, BMTC also lost national market share last year falling from 7.0% in 2014 to 6.7%. However, its market share inside Quebec remained steady at 28.5%. Under Des Groseillers leadership, BMTC expanded EconoMax last year and now operates some 11 stores under the banner in the Greater Montreal Area. This unit is a markedly different from its other two banners, focusing as it does on the promotional and entry price levels with an emphasis on cash-and-carry.

Sears Canada remains one of the most important and powerful furniture, mattress and major appliance retailers in the country even though, technically, it is not a furniture store. As part of its drive to improve profitability by lowering costs and driving customers to its fullline department stores, it assigned the leases of eight existing Sears Home outlets, such as this one in Whitby, Ontario, to Leon’s Furniture.

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Since selling off the Ottawa-based Colonial Furniture over a decade ago, BMTC has shown little interest in expanding beyond Quebec. Indeed, not one member of the big three can be considered a truly national player with stores in every province and territory across the country. Leon’s corporate banner, The Brick is perhaps the closest to being so as it has stores everywhere except Newfoundland & Labrador. Its Leon’s banner on the other hand, will probably qualify when it opens in B.C. later this year, although it isn’t represented in any of the three territories.

THEN THERE’S SEARS

One cannot have a discussion about the retailing of furniture, mattresses and major appliances in this country and not mention Sears Canada. While it’s not a furniture store, at least by Statistics Canada’s definition, it remains a powerful competitor. While it doesn’t report exact figures, Sears Canada admits about 40% of its annual sales come from what it describes as its ‘home and hardlines’ segment which includes major appliances, mattresses, furniture as well as certain seasonal categories such as lawn and garden equipment, barbeques, snow blowers and other big ticket items. Most observers believe that despite its declining sales in recent years, it remains the largest purveyor of major appliances in Canada. The category accounts for about 20% of its overall business with approximately 15% coming from furniture and mattresses. Sears Canada reported for the fiscal year ending January 30, 2016, revenues totalled $3.15 billion, down 8.1% from $3.42 billion for the prior year. Revenue for its ‘home and hardlines’ segment was done 7.7% for the year. This suggests the publicly-held, multi-channel retailer had furniture, mattress and major appliance sales of about $1 billion last year – a figure substantial enough to put them at the top of the industry’s leaderboard, perhaps even in second place when only those three product categories are considered. But the real question remains, while 2015 was a great year for furniture store sales, what can the industry expect moving forward? Next month, as part of our pre-Canadian Furniture Show coverage, we’ll look at the prospects for the rest of 2016 and into 2017. HGO MICHAEL J. KNELL is the publisher and editor of Home Goods

Online and all of its platforms. He has attended every Canadian Furniture Show since 1987.

INDUSTRY CALENDAR May 27, 2016 CHFA AWARDS GALA Canadian Home Furnishings Alliance Universal Event Space Toronto, Ontario www.chfawards.ca May 28 to 30, 2016 CANADIAN FURNITURE SHOW Quebec Furniture Manufacturers Assn. International Centre Toronto, Ontario www.canadianfurnitureshow.com July 31 to August 4, 2016 LAS VEGAS MARKET World Market Center Las Vegas, Nevada lasvegasmarket.com

August 14 to 17, 2016 ALBERTA GIFT FAIR Canadian Gift & Tableware Assn. Edmonton Expo Centre Edmonton, Alberta cangift.org August 14 to 17, 2016 PRIMETIME Cantrex Nationwide Gaylord Opryland Resort Nashville, Tennessee nationwideprimetime.com August 16, 2016 CHFA ANNUAL GOLF CLASSIC Canadian Home Furnishings Alliance Caledon Woods Golf Club Bolton, Ontario www.chfaweb.ca

August 7 to 10, 2016 TORONTO GIFT FAIR Canadian Gift & Tableware Assn. International Centre Toronto Congress Centre Mississauga, Ontario cangift.org

ADVERTISERS’ INDEX Pages 2-3 Phoenix AMD International 41 Butler Court Bowmanville, ON L1C 4P8 T: 800.661.7313 F: 905.427.2166 www.phoenixamd.com Page 5 Stearns & Foster Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 www.stearnsandfoster.ca Page 7 Las Vegas Market 475 S. Grand Central Pkwy. Las Vegas, NV 89106 T: 702.599.9621 F: 702.599.9622 www.lasvegasmarket.com

Page 11 Zucora 552 Clarke Road London, ON N5V 3K5 T: 800.388.2640 zucora.com Page 13 Tempur-Pedic Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 tempurpedic.ca Pages 15-20 Canadian Furniture Show 101-1111 Saint-Urbain Montreal QC H2Z 1Y6 T: 514.866.3631 F: 514.871.9900 canadianfurnitureshow.com

Pages 24-25 Serta Canada 40 Graniteridge Road, Unit #2 Concord, ON L4K 5M8 T: 800.663.8540 sertacanada.com

Pages 34-35 Cantrex Nationwide 3075 Thimens, Suite 300 St-Laurent QC H4R 1Y4 T: 514.335.0260 F: 514.745.1741 www.cantrex.com

Page 29 Protect-A-Bed 1500 S. Wolf Road Wheeling, IL 60090 T: 519.822.4022 www.protectabed.com

Page 44 Home Goods Online P.O. Box 3023 Brighton, ON K0K 1H0 T: 613.475.4704 F: 613.475.0829 www.HomeGoodsOnline.ca

Page 33 Magniflex 1000 5th St., Suite 220 Miami Beach, FL 33139 T: 905.481.0940 magniflex.com

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