By Nancy Meyer
NEW YORK -- As the holiday selling season kicks into full swing, ready-to-assemble furniture sales, particularly those in the entertainment segment, are expected to get a lift.
But retailers are doing some heavy promoting to try to ignite sales of furniture and home goods and overcome the negative effects of the housing slump, credit crunch and lagging consumer confidence.
Driving the RTA category, of course, are entertainment furniture pieces and TV stands to accommodate wide-screen, plasma and LCD televisions, the hottest consumer electronics items this season. Interactive gaming chairs and other entertainment items are also being featured prominently.
But unrelated niche products are also getting a piece of the action, positioned as gift items. Jewelry armoires seem to be making a comeback, with prominent displays at mass.
Meanwhile, other types of furniture for entertaining, such as folding tables, folding chairs, wine bars, buffets and other pieces used when company comes to town, are being promoted as hot tickets.
RTA vendors said they have modest expectations for this fourth-quarter period, traditionally the strongest sales period for the category.
"The last couple of years, flat-panel TV stands walked out the door," said Jim Sexton Jr., vice president of Z-Line Designs. "That's not so much the case this year. It's really slowed down," he said. "Let's face it. The economy is bad and retail has been hurting all year."
The business climate is so tough that retailers are doing all they can to drum up business and clear out their inventories.
"Everyone's going to be really aggressive, throughout the season, from Thanksgiving to Christmas. It's going to be bloody," said Rick Jackson, Ameriwood president. "Everyone wants a piece, whether it's out of advertising or [publishing] catalogs or doing stack-outs in the stores—whatever they need to do, they'll be doing."
Indeed, Wal-Mart stepped out early by rolling back prices by 10 percent and more on thousands of products, including key RTA items. Rollbacks were made on TV stands, desks and other pieces from Bush; book cases from Sauder; kitchen nooks from Linon; and video rocking chairs, futons and other goods from a variety of vendors. Wal-Mart is also teasing consumers with price-slashing on many "secret items" beginning on "Black Friday."
As prices on TVs and gaming products have come down, so have the prices of the furniture to put them on, observers noted.
"Especially with TVs coming down, you can't sell a TV stand above $249," Sexton said, adding that now, Z-Line’s "hottest price points are $99, $149 and up to $249."
Z-Line has had to drop some of its better and top-of-the-line stands in brushed nickel that retailed for $399 to $449, because they weren't selling, Sexton said. "I really have to focus on the $199 to $249 price points; $299 is the max," he said.
Recent circulars from Circuit City feature price breaks of between $20 and $50 on TV stands. Featured were models from Ameriwood for $109.99 and Z-Line for $149.99 and $249.99. Higher-end goods from Bush ($269.99), Tech Craft ($399.99) and Z-Line ($449.99) were also promoted.
Meanwhile, Best Buy's circulars are touting a range of TV stands, after "instant savings," from $149.99 from Init, $159.99 from Studio RTA, $249.99 from Bush and $349.99 from Altra.
In stores, Wal-Mart is featuring its best wide-screen TV stands on aisle endcaps, cross-merchandised with decorative accessories. On the aisle, its assortment is well developed, with roughly two-thirds of the TV stands in black, ranging from Z-Line's glass TV cabinet for $89.88 to Sauder's open entertainment center for $129.43, Home Trends' black TV stand for $149.93, Z-Line's highboy in chrome and black for $169.77, and Whalen Furniture's plasma TV stand in wood and glass for $229.76. A few oak pieces are shown in Home Trends' Park Crest collection, at $184.92 for the media tower to $199 for the desk.
Target is making its biggest statement in gaming chairs, with a whole aisle devoted to video rockers, beginning at $49.99 and going to $148.99 for the wireless version.
Gaming seats are also given prominence at Linens 'n Things, with a price break of $69.99, down from $99.99 on LumiSource's Boom Chair B32 sound rocker.
At Bed Bath & Beyond, LumiSource's Boom Chair is also given upfront promotional placement, with a model priced at $119.
Likewise, jewelry armoires are being heavily promoted at Bed Bath & Beyond, with an aisle spot given to various versions, for $149 and $199.
Jewelry armoires are being given a full aisle at Target, in a good-better-best assortment. Price points there are $49.99, $69.99, $99.99 and $129.99.
While the holidays may see a spike in sales, RTA vendors said they expect the difficult climate to continue at least for the first half of 2008. The tough environment, though, hasn’t fully dampened optimism for 2008.
"It's an election year, and people see there's some hope" for changes, said Jackson of Ameriwood. Particularly, consumers may feel there's more hope for a turnaround and be more bullish about taking risk and spending more.
"We've been too focused on the war. There's plenty of opportunity out there," Jackson said.
Sexton, of Z-Line, said his hopes are hinged on positive steps he sees retailers taking in their assortments.
"If there's optimism, it comes from knowing that the big guys we sell are getting it. They know what they need to do [to improve the category]. You'll see a lot of great changes and a lot of great values in 2008, and hopefully that will translate into better sales."
