Heath E. Combs -- Casual Living, January 1, 2009
Joseph Cilio has spent nearly 30 years in the outdoor living business, both in retail and wholesale. So when he insists changes are necessary to move the industry forward, it deserves some attention.
"The biggest change I see will be the concession of the early buy and credit extensions," he said. "Those wonderful tools we've had to work with over the last 15 to 20 years have seen another day."
Cilio is optimistic new solutions will develop and the casual industry will once again thrive when the economy rebounds. In the meantime, the president of King of Prussia, Pa.-based manufacturer Alfresco Home says his company is doing just fine so far. Its fiscal year ending June 2008 was its best ever, with sales more than doubling from the previous fiscal year.
Much of its success ties into product development. Cilio launched Alfresco Home in 2004 to offer garden centers and casual living retailers furniture and decorative accessories for the patio, garden and home. His wife, Kimberly, is one of the company's designers, and his brother, Anthony, is vice president of product development.
"We like to try to find balance between updated traditional and a more contemporary kind of look," Anthony said. "We look a lot in Europe to see where the trends are going there. We also draw lots of inspiration from our customer base. They're out there talking to the end user, and we always seek out feedback from them and our sales team. We take all that information and process it all to see what we think will work the best for next season."
Last October, that exhaustive research resulted in four new cast aluminum groups, five Everwoven all-weather wicker collections and two marble mosaic lines of bistro and dining sets and accessories. The company also debuted a full domestic custom cushion program with a selection of fabrics including Sunbrella and Outdura.
"That was huge," Cilio said of the custom cushion program. "It allowed casual dealers to look at us in a new light. We've come to bat with classic designs and we got the custom cushion program down, so it all really clicked."
|Lago Brava planters from the Terra Fresca Collection.|
Service is another reason for the company's success. Cilio's brother-in-law, Kevin Nigro, oversees service as vice president of operations.
"We believe you can buy from anyone, so it's very important to ensure that your experience at Alfresco Home is as easy and pleasant and effortless for you as possible," Nigro said. "In that vein, we work very hard to ensure that your answers are received in timely manner and your orders are shipped out on time."
A new barcode scanning system will help. At press time, Cilio said the system was just coming online, but he was confident it would improve inventory logistics and get orders shipped from its 75,000-sq.-ft. warehouse quicker.
Cilio is also sure Alfresco Home's redesigned Web site (alfrescohome.com) will help retailers. Not only does it have more practical tools, such as a wholesale catalog and price list, it also features a wealth of photography and sharp content designed to appeal to consumers and connect them to retailers.
Cilio and his family are confident in their moves to help retailers because they are rooted in that side of the business. They still run Peter's Home and Garden in Quakertown, a garden and casual furniture store located about an hour north of Philadelphia.
Cilio's father, Peter, opened the store in 1973, and both Joseph and Anthony grew up there.
"(Retail) is really a wonderful perspective to start from," Cilio said. "I know what retailers think and want because we've been there and are there. Every day, we need to be aware of the products and services the market wants and the price points consumers are looking for."
The store, in fact, gave Cilio the idea to launch Alfresco Home. In the late '70s, Peter began sourcing a line of handmade terra cotta planters from Italy for the store, a side business that eventually became Campania International in 1984. From that point on, the brothers worked almost exclusively at Campania, even after Peter sold it to a private investment group in 2000. Joseph eventually decided to do something else and went back to work at the store to figure it out.
"I was doing lot of buying in 2004 and saw that it was very difficult as a small independent retailer to get into the casual living business," Cilio said. "There were significant barriers to entry into the casual retail business due to vendor exclusivities and excessively high minimums. Almost immediately, I thought there must be more stores like mine that want the ability to purchase a significant percentage of their casual and garden product mix from a single, well rounded and reliable resource where the minimums aren't ridiculously high."
He talked with Kimberly, studied the market more and launched Alfresco Home later that year. Now, that experience as a buyer is shaping his thoughts on the industry's future.
Cilio sees flaws in the casual industry that parallel the consumer credit crisis. Early buying has become synonymous with dating and extended terms, allowing retailers to put off paying bills as other expenses pile up. Like a consumer stuck with $10,000 in credit card debt, retailers are left with bills they cannot pay.
Cilio views early buying and billing terms as two separate issues. Early buying, he said, is necessary to give manufacturers time to develop the right product for the market. He added billing terms must be reeled in, revised and managed differently than in the past.
"Everyone from the retailer to the manufacturer to the distributor has to be more attentive to inventory management and credit extension to make sure their businesses stay on solid ground," Cilio said. "The retailers in our industry and we as vendirs, suppliers and manufacturers must work much more closely and openly together about these details. It's a tough adjustment to make, but we can't keep extending credit and then not have the invoices paid on time. It just does not work out. "
That's why he sees a silver lining to the current credit crisis.
"We needed something to hit us in the face and tell us we have to take care of it," he said. "With all the extraordinary research and product development suppliers bring to market to keep our retailers fresh and at the top of the independent casual ladder, it is imperative that we all work together more closely than ever. In that way, we all win."