Leisure Living launches wholesale division with alternative table tops
Kristine Ellis -- Casual Living, 3/17/2011 6:57:17 AM
WITH HIS eye on the future and his feet on the ground, Marc McDonald is taking Leisure Living into the outdoor furniture wholesale market this month with its first collection of alternative table tops and a Pronto Warehouse Program that he says is unlike anything in the industry.
The new urethane table tops feature a universal mounting system, are manufactured in Salt Lake City and stocked in Leisure Living's 65,000-sq.-ft. warehouse so they can be delivered anywhere in the country within five days. The first pattern, Canyon Stone, is available in 12 different sizes for dining to occasional tables.
"Basically, I'm taking the risk for the dealers ... all they have to do is make a phone call, and they have it in a few days," said McDonald, who is president of the Salt Lake City family-owned business. "They can have these table tops on their floor and turn them 10, 20, 30 times a year and not tie up their dollars in inventory."
Alternative table tops are just the start. McDonald is already in discussions with a manufacturer about a complete outdoor furniture collection under the Leisure Living brand and hopes to expand the Pronto Warehouse program even further as interest grows.
Adding a wholesale revenue stream has been a long-time dream for McDonald. The convergence of several factors convinced him that the time was right.
"People are being more conservative in their buying and in general are wanting merchandise quicker in season [while] a lot of single-store retailers don't have the warehouse space to buy a lot of product," he said.
His great frustration with quality issues of imported stone table tops, particularly those caused by harsh weather, prompted McDonald to start with alternative table tops.
"It's been a major headache the last couple of years to find something that has a good look, is stable and has good weatherability," McDonald said. "I think I've found that in my new top, which is very exciting."
This isn't the first time McDonald has seen a niche and filled it. It happened a few years ago, albeit on a smaller scale, when McDonald became an early believer in the viability of high-end barbecue islands. His wife and business partner, Sharon, initially didn't share the vision but quickly came around when the first $6,000 unit sold the day after it hit the floor.
"When she came into work and asked where it was, I told her that I sold it and that, by the way, the gross dollars that we made on that grill at the time was like selling 62 Spirit grills," McDonald chuckled.
While he saw the grill island market dip in recent years, barbecue grills remain a specialty at Leisure Living, which dedicates about 1,000 square feet of the 18,000-sq.-ft. showroom to the category.
As with his outdoor furniture mix, McDonald has culled his grill lines down to those that deliver the best value and service. That said, he keeps a full range of options in price points from $300 to several thousand dollars. Weber is his entry-level line.
"I consider it to be the best line in the industry," McDonald said. "I'm not saying that there isn't better product, but the Weber people run an incredible company, from their management people to their delivery and service to their quality. It's one of the three best companies I've ever bought from."
In addition to offering a good selection, an equally viable accessory department is paramount to doing well in the barbecue/grill category according to McDonald. Adding two or three accessories to a grill sale goes a long way to making the transaction very profitable.
"Almost no one buys a grill without buying accessories," he said. "I seldom sell a grill without selling at least a cover and a tool set, and maybe some other type of grill pan."
While there is still some interest in high-end grills and the occasional island, Leisure Living's customers have gravitated to lower price points in the last couple of years. The same holds true with its outdoor furniture sales.
Last year McDonald heavily promoted value in his advertising, which drew customers, but going into 2011 he decided to tweak the message somewhat in light of what he sees as a disturbing industry trend.
"I think we as an industry are teaching our customers that if something isn't 50% off, they shouldn't buy it because it isn't on sale," he said. Discounts based on the factory's retail pricing skew the customer's knowledge of what a true sale price is, he added.
"So I'm going back to what I did for the 27 years previous to the downturn," McDonald said. "All the customer wants from you is the best value - they don't want to buy it today and see it on sale tomorrow - and that's what we have always been about."
To that end, he plans to pay closer attention to his margins this year.
"What I think I learned from the recession is that you have to stick with your core values of being about quality and taking care of the customer," he said. "If you have to give a product away, it's probably not worth being in the business."
Love of the industry
Early indications bode well for Leisure Living's 2011 season. Outdoor wicker, in particular, has gotten off to a good start following an exceptionally strong 2010 showing. McDonald added new lines and brought in additional containers foreseeing more growth in this category this season.
Deep seating also continues to be strong, spurred in part by sales of fire pits. The specialty dealer sells a couple hundred fire pits a year and customers seem to be partial to surrounding their pits with deep seated swivel rocking chairs.
Though it isn't uncommon for Leisure Living's customers to purchase deep seating in lieu of dining, McDonald remains committed to showing full collections.
"Having a full collection on the floor is critical, otherwise I don't have success in retailing it," he said.
Manufacturers that offer only partial collections aren't fully supporting specialty dealers, McDonald added.
McDonald also sees a weakness in the industry when it comes to how furniture is marketed and sold, which has been a driving influence in his decision to begin marketing his own brand.
"I really love this industry, but I see a hole, if you will," he said. "Manufacturers typically like to have raw material come in the front door and then ship it out the back door four weeks later as finished product. My program isn't going to be that way."
Key to his ability to do this is Leisure Living's available warehouse space and its healthy bottom line which allows the company to invest in its growth in a new direction.
A four-time Apollo Award nominee, Leisure Living opened in 1982 when Marc and Sharon went into business with his parents, Charles and Bethann McDonald. The new store was the latest evolution of Southeast Furniture Store, established by Marc's grandfather in 1925.
"I started working for my grandfather when I was 10 years old so I've talked patio furniture my whole life," McDonald said. "I don't know anything else."
With that focus and McDonald's personality type, Leisure Living's move into the wholesale market was inevitable.
"I see a niche and it's an itch I have to scratch," he laughed.
We would love your feedback!