Summer Classics adapts to handle challenging economy
David Perry -- Casual Living, June 1, 2009
Believing manufacturers should be stepping up rather than pulling back in this economy in particular, Summer Classics will introduce four new collections at the Chicago Preview Show — including its first sling collection — as well as offer a new container program featuring collections under the Parker James brand.
The manufacturer is adamant that a slow economy demands an aggressive response.
"It's been pretty disappointing to us that many manufacturers are not attending premarket and are not planning any new collections or fabrics," said Bew White, president. "It seems in this challenging market we are in dire need of product that will excite consumers to make purchases, and of effective partnerships and strategies with dealers to increase sales volume."
In addition to the new collections, Summer Classics will introduce three table and chair groups with opening price points to give dealers more flexibility to draw in price-conscious consumers.
The new direct-import container program is also value oriented. Offered in partnership with Parker International, it will include nine collections of metal, woven and mixed materials.
With revenues down across the industry, White believes price points will not revert to past season highs any time soon. He's concerned that lower prices combined with potentially high inflation will result in product shortages next season unless retailers make big early buys. In fact, he calls the drop in early buys "the biggest single problem the industry has."
"[Specialty retailers] don't realize that without their early buys, the factories are forced to go to minimum staff," White said. "So when they do start buying, the factories won't be able to gear up as fast as the demand."
Summer Classics' 2009 early buys were down by 21% — not untypical for manufacturers this season. By midseason, orders of its 11 "core groups," those it warehouses for quick shipment, were up well beyond projections, resulting in a few stock outages. These groups are being restocked.
A bright spot for the manufacturer this season has been the continued success of its Super SHOPS Program. Dealer participation increased by 15% for 2009 and the company projects another 15% increase for 2010.
The program requires dealers to set aside a certain amount of space in return for special pricing, quick delivery, merchandising assistance and other assistance.
"It has been a very effective program for the dealers who have used it," said Harold Hudson, vice president of sales and marketing. "Some have increased their volume by as much as 400%."
The program represents 15% of Summer Classics' dealer network and a much higher percentage of its volume.
Dealers taking advantage of the manufacturer's Promotional Coupon program also were very successful, although the company was disappointed that more of its dealers didn't participate. It is now offering a wicker promotion that has proved successful in the Summer Classic retail stores.
Summer Classics is also revamping its direct import program, which was introduced at last year's premarket to make it more dealer-friendly. The program gave retailers an exclusive on lines not included in the manufacturer's catalog.
"As we all know, last year's early buy season was not the best time to introduce a full-container program," Hudson said. "We did have one dealer who purchased one of the frames in this program, and they sold out the first delivery and have already re-ordered."
With Summer Classic retail stores' sweep of Casual Living Merchandising Awards in the multistore category, the company's leadership in visual merchandising is an obvious key to its success with its company stores.
"We feel like our stores combine a unique indoor/outdoor feel with a designer look and a feel that makes customers feel welcomed and inspired," White said.
Overall, Summer Classics' retail stores division was up about 5% in 2008, including new store openings. In stores open more than 24 months, sales trended downward around 10%. The company now has eight company stores and three licensed stores, with no plans to open more in 2009.
"Having said that, we are being presented, and feel that we will continue to be presented, with opportunities to purchase or assume retail operations," White said. "With dealers looking for exit strategies and increased sales, our business model is very attractive."
In light of the housing slump in Atlanta, Summer Classics modified its Master Store concept last year to put more focus on outdoor product. Additional Master Stores are not out of the question once the indoor furniture market comes back.
In the meantime, both the Master Store concept and the manufacturer's year-round production schedule will be getting a boost from its new SC Home, a line of indoor furnishings that will launch in August. Primarily casual dining, accent tables, chests and mirrors, the line will have an Old World flavor with its emphasis on reclaimed wood and antique styles.
Despite the challenges, White remains optimistic Summer Classics will continue to do well.
"We have really had to think outside of the box this year," White said. "But we have become an even stronger company in the process."