RTA: style, quality build sales

Discount Store News, Jan 5, 1987

RTA: Style, Quality Build Sales

Discount chains are cashing in on strong sales of ready-to-assemble furniture as consumers appear to be more receptive to the improved quality and style of RTA goods.

Although entertainment centers, utility carts and home, office and storage furniture have been reported as the industry's big sellers, many retailers and manufacturers believe consumers now are ready for RTA furniture in other rooms in the house, specifically the bedroom. This RTA furniture, should look more like "conventional' furniture with style features like rounded lines, moldings, wood grains and decorative handles, they said.

Discount stores account for the largest share of all RTA furniture sales, reported Furniture Today, a weekly trade journal, estimating that discounters garnered 33% of the total $500 million worth of domestic and imported RTA furniture shipped in the U.S. in 1986.

To meet the growing demand and capitalize on the profitability of the category, some retailers are allotting more floor space to RTA furniture.

In October, Clover, the 21-store Pennsylvania-based chain, expanded its RTA area, providing more space with a gondola run and carpeted 30-in. high platform for display with stock stored underneath.

Prior to this renovation, "if you had a sample, you couldn't display it in the same exact square footage as you stored it,' said Jan Clausing of Clover. So far, 11 or 12 of the chain's stores have the new RTA look, with four or five more locations scheduled for renovation.

Jamesway, the 106-unit, New Jersey-based discount chain, also elevates its RTA furniture on a 3-ft. high display with packaged goods underneath.

And some discounters that used to show just a few "items,' now have 200 running feet of complete lines showing in their stores, RTA suppliers said.

From KD to RTA

Ready-to-assemble furniture has come a long way from its former knock-down (KD) fringe category of just 10 years ago. Reflected even in the name itself, a dramatic change has taken place in the category, particularly in the last several years.

KD, which carried a negative connotation, was perceived by shoppers as cheap, boxy storage units. In contrast, RTA reflects consumer trends toward better quality and a good value in furniture that can be easily assembled at home. Much of RTA furniture has been upgraded to the point of competing with some "real' preassembled furniture. And this is only beginning.

"I think just changing the name from KD to RTA helps the industry,' said Clausing.

Several manufacturers cited the European market as an example of what is to come here. One vendor put it simply when he said, "European RTA looks like "furniture.' They've had hidden fasteners for 10 years.'

In the U.S., RTA furniture makes up somewhere between 4% and 6% of the furniture business. In Europe, however, RTA comprises a steady 30% to 36% of the furniture marketplace. And manufacturers here hope to catch up by making RTA products that look good and are reasonably priced.

Frank Aquila, of Affordable Furniture, Dowagiac, Mich., said, "The business has doubled in the past five years' and predicted, "It will double again in the next five years.' His company has prepared for this growth by expanding facilities, investing almost $20 million in two years.

Foremost Furniture, a division of Sauder Woodworking, Archbold, Ohio, has tripled its warehouse space in the past few years to accommodate the growing demand, in addition to upgrading its overall operations. "We're meeting the customer's needs with a value product that's easy to assemble with good instructions and a warranty,' said president Maynard Sauder.

Paul A. Gusdorf, chairman of the board at Gusdorf Corp., St. Louis, said, "The industry has progressed in the past several years more than it has in the past 10 to 15 years. And, in the last 10, as much as in the past 50.'

Gusdorf began making so-called "lifestyle' furniture a few years ago: bedroom dressers and cocktail and end tables. He said the new variety and quality make the goods more acceptable and created a larger market. "It's an evolution. The market is now a size that makes it an important category, and it can do nothing but grow.'

Bedroom furniture only recently has taken its place among the more popular RTA items such as book cases, computer and home office desks and TV and VCR stands.

Sauder called bedroom "a dynamic category' that Foremost introduced earlier this year.

Tom O'Sullivan, national sales manager of O'Sullivan Industries, Lamar, Mo., was slightly more reserved. He agreed that bedroom furniture is going to be a good category. But, he said, "I don't think it'll ever be as good as electronics items.'

The acceptance of bedroom in the RTA market is attributed to the general improvement of the product and category, and, as O'Sullivan put it, "RTA now fits a larger segment of the population. They want it in their house.'

Dave Brown, marketing manager of RTA furniture for Armstrong World Industries, Lancaster, Pa., said his company entered the RTA market just last year. He also enthuses about the bedroom category, calling it the "largest opportunity in RTA, until another opportunity comes up anyway.'