Big demand for RTA stimulates market, sales - ready-to-assemble furniture at the International Home Furnishings Market, discount houses

Discount Store News, Oct 18, 1993

At the International Home Furnishings Market vendors anticipate a very good market with only one glitch: keeping up with overwhelming demand. Virtually all major vendors acknowledge they are pushing their capacity limits.

HIGH POINT, N.C. -- Ready-to-assemble furniture manufacturers and retailers, projecting double-digit percentage growth by the end of this year, anticipate another banner year in 1994.

Here at the International Home Furnishings Market, vendors anticipate a very good market with only one glitch: keeping up with overwhelming demand. Virtually all major vendors acknowledge they are pushing their capacity limits.

As more consumers choose RTA over case goods, traditional furniture retailers are dabbling in RTA offerings usually found at discount stores. But, by the same token, some discounters are looking to expand into non-RTA furniture offerings. Venture Stores lifestyle furniture buyer, Jim Bufalini, said his agenda at the market will include looking into "What part of the furniture business not carried now can be successfully merchandised in discount stores."

The chain's interest in furniture not typically found in discounter RTA assortments was evidenced in Venture's experiment with futon sofa beds nearly two years ago. At the time, Venture and Caldor were among the only discounters offering such an item.

Like most discounters attending the International Home Furnishings Market, Bufalini said he hopes to find new trends and finishes in RTA at High Point while solidifying "partnerships with key resources."

While Venture has a handful of skus that are not RTA, office product chain Staples is considering further steps to expand its growing case goods office furniture business. Moving boxed RTA stock to the back room to create more display space for seating, tables and chair mats is just one approach being considered, noted Bill Paul, vice president, merchandising.

Staples has been testing numerous traditional furniture options through Kapables, its private label line manufactured by Miller Desk, High Point, N.C. Kapables consists of roughly eight basic vignettes in a variety of finishes such as mahogany and oak. The test, which was undertaken in February at three stores in the Boston market, was expanded to include 12 New England stores in June.

Paul said he is "trying to see how we can build the furniture unit movement without increasing square footage."

The highest price point before the test was about $00, while now it's closer to $1,000.

The backbone of the RTA mix at Staples is Bush and O'Sullivan, with additional office pieces available from Yerger Brothers and M&M. Paul noted he is "happy with our current roster of suppliers."

While office superstores like Staples, warehouse clubs and consumer electronics chains are expanding into case goods, others are looking to bridge the gap with professional furniture assembly firms.

Office Depot and Office Max stores in California and Nevada, for instance, are working with a company called Compac Furniture Assembly, based in Campbell, Calif., to offer most of the cost savings of RTA without the potential obstacle of assembly. John Keith, sales and marketing manager at Compac, estimated that the cost of assembly ranges from a low of $10 for items like carts and printer stands, to a high of $80 for large work stations. Deliveries made to areas less than 15 miles away are free of charge, while travel distances less than 15 miles (one way) are $10, and those more than 25 miles are $15.

"The assembly activity for the Office Depot and BizMart stores--acquired earlier this year by OfficeMax--continues to increase," noted Keith. "We are experiencing repeat customers and customers who are buying RTA products because assembly services are now available." Compac plans expansion into other regions of the country.

Office and electronics storage furniture will again form the core of most new product introductions at the market.

* Ameriwood's director of marketing, Phil Banas, said the company's Axial System office furniture line under the Portfolio brand will be the company's major new collection at the market. The office products grouping, first shown at the recent National Office Products Association convention, features Ameriwood's new Fast Assembly System Technique (FAST). "We believe we have taken out two-thirds of the assembly time," said Banas.

Axial, which will be available for shipment early next year, is a 15-sku, modular "building block" system that can be disassembled and reassembled in different configurations to meet changing consumer needs. The system--which includes the usual spectrum of PC stations, hutches and work returns--has a charcoal colored base and either a speckled granite or medium oak work surface. Everyday retail prices on the collection range from $99 to $299.

"Office superstores are our primary focus with this collection, but there might be a variation of this for discounters down the road," said Banas.

New in Ameriwood's Members Only brand will be the Monterrey home theater collection. In the Affordable brand, Ameriwood will test buyer response to its popular Gatehouse collection in different combinations of green, white and light oak.