Quality gain seen in KD furniture - discount furniture

Discount Store News, Oct 8, 1984

Better quality furniture, microwave carts, computer desks--and in some cases, VCR tables--are expected to keep sales of KD (knockdown) furniture strong in discount stores and catalog showrooms.

However, brass and glass items, and bulkier, space-eating foam furniture, when carried, are not seen as growth areas by most of the chains surveyed.

"We've just been getting into KD furniture during the past year," said K mart senior buyer William Cashman. "We toyed with it before, but never made complete statements."

Now, however, "we've seen a vast improvement in quality in KD furniture, especially in merchandise from Taiwan and some European firms," he said.

The chain has built up the category from a few wall units and smaller items like parsons tables and magazine racks to broader assortments of bookcases, entertainment centers, chairs and tables.

Area of Reliance

Wall units remain the strongest-selling items, with four models ranging in price from $49 to $169. Tables are priced at $88.88-$109.88 every day. A Mates pine/country oak chair is $37, a bentwood chair is $58 and a contemporary oak chair is $69.

ALCO, by including VCR tables, computer desks, microwave carts and unfinished pine in its fall program, is, in part, courting a more upscale consumer.

As part of a back-to-school promotion in August, the chain offered, for the first time, a $49.97 computer table on sale for $38.38. A step-up model for $64.97 was not promoted.

ALCO will also soon begin carrying a VCR table. "What interested me most about the VCR table was knowing the price of the VCR machine was coming down," said buyer Stan Issit.

The chain also focused on stocking basic particle board furniture, but in more stylish designs. For example, the chain is featuring a country-style line including an ice-box-look shelving system for $89.97 and end table for $49.97 that are fitted with brass knobs and hinges.

In July, the chain put unfinished pine furniture in 10 out of its 121 stores--three models each in a three-door chest, student desk, toy chest and five-shelf bookcase, using one of each as a display model. The aim, explained Issit, is not to trade up customers to pine, but to cater to two types of customers--the budget-conscious, and the fashion conscious.

This strategy is expected to contribute to a 20% category sales growth this year, somewhat below the 25% growth experienced in 1983.

Treating KD furniture as a total fashion look helped drive its sales at S. E. Nichols up 40% in 1983, and is expected to contribute to a 30% growth this year.

Display models, arranged in a room setting, are completely assembled on the floor in an open area visible from a distance. All pieces are signed with price and special features.

The program itself has become more fashion oriented: Two TV stands selling for $29.99 and $49.99 were added to the $19.99 model. "You have to give the customer a choice," said buyer Vito Dichiara. "If you're spending $400 to $500 on a color TV you don't want a cheap stand."

Microwave carts priced at $79 and $99 are sold along with a $59 model. Two computer desks for $39.99 and $89.99 were also brought in. A model of each item is displayed in the electronic or appliance department (holding a TV, microwave or computer), with a sign refering the customer to the KD furniture area.

The lower-end items sell better by units than the added pieces by 20%-25%. Dichiara said that in total dollar volume, however, the higher-end pieces are 20% better.

Pamida also increased sku's in microwave carts from one to three. For Christmas, the Nebraska-based chain will promote a VCR table for $79.99, and will add another model for $99 after the holiday.

David Norris, mm, housewares, at Wilkor, said the Florida-based cataloger is selling VCR tables for $19 to $69. The $19 item is made of 1/8-in. particle board, while the $69 models are either of 3/4-in. particle board with added features, or are made of oak.

Adding It Up

Both, explained Norris, serve different needs, depending upon whether the stand will be placed in a den or kitchen, or in a room intended for entertaining.

Although particle board and wood furniture have picked up in popularity, glass and brass remain a minimal business. For example, S. E. Nichols carries a small assortment of brass tables, wine racks and fern stands for $10.99-$19.99, although Dichiara said the collection does not appeal to his budget-conscious customers.

Foam furniture, considered too bulky and space consuming, is not being carried by some chains, and is regarded as an everyday business in others.

K mart currently has five sku's in flip-foam furniture--a sofa, two loveseats and two chairs--for $69-$149.

Nichols is aggressively pursuing sales in foam, and has doubled its program over the last year. It added about three patterns to its assortment of flip chairs, loveseats and sofas, a 36-in. swivel slouch chair and modular pieces. Dichiara reported sales in foam are up 50%.

Flip chairs that convert to twin beds are priced at $59. A deluxe couch that turns into a double bed is $159. The modular furniture--consisting of chair and loveseat--ranges from $89 to $159.