Gensun rises despite cloudy conditions
Chris Gigley -- Casual Living, July 1, 2008
Gensun Casual Living is defying the U.S. economy. As rising fuel costs pinch the industry, its business continues to grow.
“Our sales are up this year compared to last year,” executive vice president Jan Trinkley said. “But I think we're weathering the storm differently than most. Because we're new and bringing a lot of new dealers on board, we're growing while other companies are struggling to maintain.”
Gensun launched in 2003, designing and manufacturing furniture and accessories for the patio, deck, porch, pool and other outdoor areas around the home. It began by serving independent specialty stores exclusively and still does. Trinkley said that's another reason why the company is doing well in challenging conditions. Many of its dealers invest in merchandising to romance the product.
“You have some retailers out there who I consider are doing the right thing,” Trinkley said. “They have an attractive storefront. They have an attractive store inside. They accessorize well. They make the product look good, like in an upscale furniture store. I think those dealers are doing the best in the marketplace. They're also doing the best financially.”
Those who aren't, Trinkley said, have tried to compete with the big box stores.
“If you look at the dealer attrition and who has gone out of business in the past few years, it's been a lot of big dealers that have been able to buy large quantities at the best price,” Trinkley said. “Why are they not here? They were able to buy the best price, so what didn't work? It seems simple to me. They sold price, and that's not where it's at. The mass merchant sells price, and you can't turn the door enough times to compete with them.”
To that end, Gensun is doing all it can to support the dealers going in the other direction. It continues to broaden its product line to give them as much choice as possible. Its furniture is available in 10 finishes and retailers can choose from more than 200 fabrics from its domestic cushion supplier.
“The fabric companies have come out with some beautiful fabrics in the last couple of years,” Trinkley said. “They've really stepped up the design and color, so we have a great collection to choose from.”
Gensun is debuting three new collections this year: the Tahiti Collection, a line of bamboo casual furniture; Seville, which features a more contemporary look; and the Safari Collection, a designer line that incorporates the look of leopard skin.
With its suggested retail prices in the $1,300 to $1,500 range, these new lines are aiming squarely at a discerning high-end consumer who has money to burn despite the economy. It's no accident these target consumers don't tend to shop the mass merchants.
“We can't compete with the mass merchants,” Trinkley said. “Their prices and looks have gone up, so we need to take the next step. What really brings the customer in the door is the product that looks the best.”
Retailers are initially drawn to the Gensun line by the looks of the product, but they tend to stick with the company because the line can't be found in the mass merchant channel.
“The fact they don't sell to mass merchants is a huge bonus for us,” said Karen Galindo, vice president of Greenhouse Mall in Texas. “At that price level, a lot of vendors do. But Gensun is truly a specialty furniture provider and they know who their customers are.”
Carl Vice of Casual Living and Patio Center in Lexington, Ky., agreed and said he also appreciates how responsive the company's service is.
“The other day we had a nice, big order of products and needed four love seats,” Vice said. “I contacted them, and 'bam' — they had four on hand. We were able to buy them out of the warehouse and have them shipped cross country for that customer. Gensun is very good at logistics.”
Gensun is taking its service to an even higher level with a new program that gives retailers more financial flexibility.
“The mass merchant doesn't really offer choice when it comes to frame finishes and fabrics,” said Trinkley. “The independent dealer can, and that differentiates them. We're looking to help support them when they do that so they don't have to consider buying a lot of inventory early.”
The new program allows dealers to schedule containers of product from Gensun's factory in Tianjin, China, and have that product delivered to their store throughout the year. If they contact the company six to eight weeks before the container ships, they can change the mix in their order.
Because that's a long lead time for seasonal product, the company also stocks all its top sellers in its domestic warehouse just in case.
“We will either work with [retailers] to schedule product, or to have product in the warehouse they can pull and ship at any time,” Trinkley said. “They won't have to have large inventories. If they want to put a couple of sets in the warehouse to back up what they have in their stores, that'll probably be a good idea.”
Gensun is basically sharing more of the risk with its dealers.
“We can't be their complete warehouse, but we can be a big partner to them and be part of their warehouse,” Trinkley said.
Clearly, just being new isn't the only thing keeping Gensun growing. The company also is making plenty of moves to strengthen its ties with its expanding list of customers.
Its growth is visible. Gensun recently moved into spacious new headquarters in Ontario, Calif. And either late this year or early 2009, it will move into a new factory in Tianjin.
“The new factory will be about 500,000 square feet and will be capable of supporting our growth for a number of years,” Trinkley said.
Given how quickly Gensun grew in its first five years, that may not take as long as Trinkley thinks.