Retailers, vendors foresee resin furniture growth - lawn and garden furniture at discount stores

Discount Store News, August 7, 1989

Retailers, Vendors Foresee Resin Furniture Growth

Resin outdoor furniture appears to have come into its own after three years in discount store outlets.

The category has captured at least a 15 percent market share of outdoor furniture, more than a $1 billion market, vendors estimate.

In unit volume, retailers expect this year to move anywhere from 7 million to 10 million of the basic resin piece, the one-piece, molded monobloc stack chair, at prices ranging from about $7.99 on ad to $9.99 every day.

Moreover, prices of the basic resin raw material are softening, and at least one vendor predicts that the low end of ad prices will decline next season by a dollar to $6.99.

Conversely, vendors have introduced what is said to be larger, more comfortable stack chairs for the high end of the market at $19.99 to $24.99.

"I see resin as the future," said Robert Siegel, divisional merchandise manager, seasonal for Ames Department Stores, Rocky Hill, Conn.

"Especially now that we're in Florida [through acquisition of Zayre], resin is a natural for us," Siegel said.

This season, Ames carried only basic Rubbermaid selection of its promotional stack chairs, $9.99 every day, $7.99 on ad, and a five-piece patio set of four adjustable chairs and a 38-inch table, $179.99 every day, Siegel said.

"I'll go to the show [hardware] and see what's available for next year to improve our offerings."

The seasonal dmm for another Northeast-based chain said, "the resin chair has replaced the grid chair of last year."

Requesting to remain anonymous, the dmm said his chain also carries Rubbermaid stack chairs at the same everyday price of $9.99, but has offered it as low as $6.99 on ad.

The chain also is doing well with five-piece patio sets selling in the $250 to $300 range on ad.

Why the success?

As a weatherproof plastic, "resin lasts forever, its comfortable and it's priced right," the dmm replied.

Most business is done in white, but colors such as mauve and slate blue also are doing well, he said.

He estimates that retailers will sell as many as 10 million resin stack chairs this season.

At the Hardware Show, which starts next Sunday, Aug. 13, in Chicago's McCormick Place, a number of vendors will introduce new resin products for next season.

Grosfillex, Reading, Pa., for example, will trot out five new products, including a new stack chair that stacks so much better that retailers can store twice as many chairs in the same space as the old model, said Brian Kiernan, sales manager, national accounts.

In addition, it will introduce two new tables that feature innovations in top design, Kiernan said.

Resin is growing at 10 percent a year, he estimates.

Because of the late, wet spring, sales got off to a late start, Kiernan said. But Grosfillex still is seeing sales gains in the Northeast corridor from New York into New England. Because of the rain, 1989 was a lackluster year for seasonal merchandise, Kiernan said. But resin was the only active category.

Customers are getting more sophisticated, he said, and are expecting more new products, such as tea carts and chaise lounges, and fashion cushions and umbrellas.

Kiernan expects the business to get away from the commodity type chairs into sets. Grosfillex produces a promotional set of four, high-backed stack chairs and a 32-inch rounded square table designed to retail for $79.

A major vendor development in 1989 was the formation by Rubbermaid, Wooster, Ohio, and Allibert, Stanley, N.C., of a joint venture to produce and market resin. The joint venture, called Rubbermaid-Allibert, retains both the Sundial line from Rubbermaid, about 15 sku's, and the Holiday line from Allibert, about 20 sku's, said Stan Baron, director of marketing for Allibert's specialty store division.

The combined operation will create economies of scale, Baron said, and will command "the lion's share" of the resin market.

Allibert's line ranges from its basic monobloc stack chair up to a $399 set consisting of a 74-inch table that expands to 91 inches and four adjustable chairs.

At wholesale, annual dollar volume for resin is running between $110 million and $120 million, Baron estimated. Unit sales of stack chairs could run as high as 15 million in 1989, he said.

Higher Margins Envisioned

Resin prices are stabilizing after a runup last year, Baron said, so prices next season will be dictated more by competition than by increased material costs. Both retailers and manufacturers ought to be getting higher margins than they are because the product is worth more, he said. A monobloc stack chair that costs a retailer $7 will produce a 30 percent gross margin at $9.99.

Accessories, such as cushions that sell for $5 for a basic pad to as much as $49 and umbrellas in the $29 to $149 range produce margins of about 35 percent, Baron said.

Resin furniture is comfortable even without cushions, Baron said, and except for high-end merchandise, most resin is sold without cushions.

Although customers can easily add color with cushions and umbrellas, cushions take away from the ease of maintenance, he said.