HUDSON`S BAY:Visions of furniture fashion

Michael Knell’s
HGO merchandiser
HomeGoodsOnline.ca
Winter 2013-14
Volume Two, Issue 5
HUDSON’S
BAY: Visions
of furniture
fashion
TCHFM
Preview:
Made to
Measure
KEEPING UP WITH
2014 LAA HONOUREE
BOB KAY
BrandSource
sets a new
store design
direction
Our forecast:
modest growth
ahead
CONTENTS u
6
FROM THE EDITOR
PULLING TOGETHER
This community isn’t doing as
well as it should. We need to pull
together and getting to Toronto
for market in January is a pretty
good place to start. After all,
industries are like communities
and the community that is the
furniture, mattress and major
appliance industry is getting
smaller. For the independent
retailer, TCHFM has a lot to offer.
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26
MARKET PREVIEW
MADE TO MEASURE
The Canadian Home Furnishings
Market is this country’s only
national furniture and mattress
industry event. This year, the
focus will continue to be on
bringing retailers the latest styles,
trends and colours in the product
they need to merchandise. It will
also be the industry’s best face-toface networking opportunity. Our
report is written by HGO editor
Michael Knell.
18
PROFILE
VISIONS OF
FURNITURE FASHION
Hudson’s Bay is making an all-out
effort to return department stores
to their glory days as furniture
merchandisers. Taking their cue
from their core business, apparel,
the emphasis will be on fashion
and better quality goods. For this
reason, among others, it has been
named Canada’s 2014 Retailer
of the Year.
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RETAIL
BRANDSOURCE
SETS NEW DESIGN
DIRECTION
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HGO merchandiser
Mega Group’s primary national
go-to-market strategy added four
new stores to its network in the
second half 2013. Each reflects
a new, a more contemporary,
attitude towards the consumer
as the network of independently
owned stores looks for new
ways to grow. The goal to create
an environment where she is
comfortable while telling her she’s
the store’s main focus.
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ADVERTISERS’
INDEX
SPOTLIGHT
KEEPING UP
WITH BOB KAY
It’s rare to meet an entrepreneur
who has kept one business afloat
for half a century, let alone
several. For Bob Kay, chairman
and founder of Springwall
Sleep Products, growing several
successful businesses at once, while
staying focused on mattresses,
was a welcome challenge. Our
profile of the 2014 recipient of
the Lifetime Achievement Award
was written by regular contributor
Ashley Newport.
36
BY THE
NUMBERS
MODEST GROWTH AHEAD
Furniture store sales should grow
modestly in 2013. So should those
of home furnishings stores. The
consumer’s net worth is improving
and the housing market continues
to be relatively strong. These
should result in a very measured
level of growth for big ticket
retailers in the months ahead.
ON OUR COVER Made in Canada is a
major merchandising theme for 2014
Retailer of the Year Hudson’s Bay and
so is contemporary styling including the
Reverie classic Sahara leather sofa and
chair in sterling ivory fabric from the
Winnipeg-based EQ3. Also seen is its
new custom table collection, featuring a
wood top coffee table and a market top
end table along with the Martian floor
lamp. (Inset): 2014 Lifetime Achievement
Award winner Bob Kay, chairman of
Springwall Sleep Products.
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HomeGoodsOnline.ca
<5
FROM THE EDITOR u
MICHAEL J. KNELL
Pulling together
This community isn’t doing as well as it should.
We need to pull together and getting to Toronto for
market in January is a pretty good place to start.
I
NDUSTRIES ARE LIKE COMMUNITIES. IN FACT, A SMALL INDUSTRY
really is a small town with its own attitudes, mores, standards and ways of
doing things. Like those idyllic small towns so beloved in novels, everyone knows everyone else and, for good or ill, everyone knows everyone
else’s business. As a member of Canada’s furniture, mattress and appliance
industry for the past 30 years or so, I can attest to the truth of that statement.
The trouble is, our community is getting smaller. As you’ll read elsewhere in
this issue, the years following the Great Recession of 2008 haven’t been kind
to us. Those who work in the housing and automotive industries were the only
ones to enjoy the benefits of a low interest economy, because consumers were
so stretched otherwise there was no room left in their wallets for high quality
goods we have to offer.
But unlike those small communities, the furniture, mattress and appliance
industry hasn’t been all that great at coming together in times of adversity. We
don’t even work all that well together when it’s to and for our mutual benefit.
Want a few examples? Call me as they’re too numerous to mention here.
But we have to start pulling together and there’s a pretty easy way to begin.
Get out of your office, wherever it is and regardless of where you work in our
industry’s supply chain and get yourself to Toronto in time for the opening of
the Canadian Home Furnishings Market on January 11, 2014. Spend a few days
looking at product and talking to other people in the industry.
Look up the leadership of our two industry associations – the Canadian
Home Furnishings Alliance and the Quebec Furniture Manufacturers Associations – and ask how you can get involved. We also need to a strong association for Canadian furniture retailers and TCHFM just might be a good place
to start talking about that as well.
We have got to start pulling together. Because we’re living in the new economic normal, and small industries can only thrive if, from time to time, they
work together.
HGO merchandiser
WINTER 2013-14 • VOLUME TWO, ISSUE 5
ISSN 2291-4765
www.HomeGoodsOnline.ca
PUBLISHER & EDITOR
Michael J. Knell
[email protected]
MANAGING EDITOR
Anthony E. Bengel
[email protected]
CONTRIBUTORS
Ashley Newman
ART DIRECTOR
Samantha Edwards
Sam I Am Creative
[email protected]
IT DIRECTOR
Jayme Cousins
In House Logic
[email protected]
PUBLISHED BY
Windsor Bay Communications Inc.
P.O. Box 3023, 120 Ontario Street
Brighton, Ontario K0K 1H0
T: 613.475.4704
F: 613.475.0829
Michael J. Knell, Managing Partner
PUBLISHERS OF
HGO This Week
Home Goods Online.ca
© 2013
Windsor Bay Communications Inc.
All rights reserved.
Windsor Bay Communications does not accept
any responsibility or liability for any mistakes or
misprints herein, regardless of whether such errors
are the result of negligence, accident or any other
cause whatsoever. Reproduction, in whole or in part,
of this magazine is strictly forbidden without the
prior written permission of the publisher.
AFFILIATE MEMBER
Michael J. Knell
Publisher & Editor
[email protected]
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The Metro East Collection combines clean lines with subtle shaped details to create a design that’s sleek
and sophisticated. The new Ebony Brown finish when accented with the gleaming modern hardware
brings a stylish elegance to any decor.
When pairing the Ebony Brown finish with the new Pearl White finish the group is transformed into a
striking modern look with hints of glamour. To increase the design possibilities the group can also be
purchased in any of Durham’s wood finishes or Durham’s new Premium Designers Choice paint finishes.
HomeGoodsOnline.ca
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TORONTO MARKET PREVIEW u
Made to Meas
The Canadian Home Furnishings Market
is this country’s only national furniture
and mattress industry event. This year,
the focus will continue to be on bringing
retailers the latest styles, trends and
colours in the product they need to
merchandise. It will also be the industry’s
best face-to-face networking opportunity.
BY MICHAEL J. KNELL
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HGO merchandiser
O
N THE CALENDAR, THE NEW YEAR
officially arrives on January 1 after a
night of revelry, which admittedly
can take a variety of forms. But for
members of this country’s furniture, mattress
and major appliance industries, the New Year
doesn’t really start until about ten or twelve
days later with the opening of the Canadian
Home Furnishings Market (TCHFM), which
has made its home for the last four decades or
so at the International Centre in Mississauga,
Ontario – about a stone’s throw from Pearson
International Airport.
The 2014 edition of Canada’s only national
furniture industry event will open on Saturday, January 11 and end on Tuesday, January
14 and has been themed Made to Measure.
However, things get kicked-off on the Friday
asure
evening with a welcoming reception followed
by the annual Canadian Home Furnishings
Awards gala.
TCHFM is owned and operated by the
Quebec Furniture Manufacturers Association
(QFMA). This year’s event is expected to attract
some 2,000 or so independent furniture store
owners; plus merchandisers and senior executives from the regional and national chains
as well as a number of interior designers and
decorators over it four-day run.
“While styles and colour choices may have
evolved over the show’s history, one thing remains the same. TCHFM is still the ultimate,
and only, Canadian sourcing destination for
discovering home furnishings and accessories that are geared to specifically appeal to the
Canadian market.
From traditional to contemporary, rustic to
modern, every style and taste is accounted for –
all under one roof,” said Pierre Richard in an
open letter to the industry.
This will mark Richard’s first TCHFM as
president and chief executive officer of both the
event and the QFMA
“The market offers an exceptional opportunity to not only view, but also experience, the
very best that the Canadian furniture industry
has to offer,” he continued. “It is also an exciting face-to-face networking opportunity which
enables visitors to build upon the working relationships that are so vital to this industry.
“The TCHFM team works tirelessly to create
a made-to-measure experience that is specifically tailored to meet the needs of its manufacturers, suppliers, designers, distributors and }
Left: The Julian
collection was a top
seller this year for
upholstery house
Brentwood Classics and
is shown here in a fabric
called Catcher Zinc.
Right: The Monaco
bed from Vancouver’s
Van Gogh Designs is
available in several
heights, styles and
finishes such as nail
heads and buttons.
Storage is also offered.
HomeGoodsOnline.ca
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The 11208 from Italian specialty mattress
maker Magniflex offers the ultimate in
comfort. At 14 inches high, this mattress
features six layers of breathable memory
foam and other natural fibres that mould
and respond to individual body weight.
Its removable cover is made from natural
viscose fabrics.
The new Union bedroom
suite from Huppé
is constructed from
carefully selected
birch veneers and seen
here in a finish called
Anthracite, a very ofthe-moment hue. The
collection is offered in 15
different finishes.
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HGO merchandiser
retailers,” Richard adds, noting consumers have
become more knowledgeable about styles and
trends in recent years. This in turn, has prompted
them to become more demanding when it comes
to finding and buying furniture. Keeping up with
these changes is the primary task of TCHFM and
the real reason why retailers return to the International Centre in the dead of winter each year.
All three of Canada’s major furniture buying and marketing groups – including Cantrex
Nationwide, Mega Group/BrandSource Canada and Dufresne Retail Solutions Group – are
expected to have a significant presence at this
year’s market. In addition to spaces on the floor,
each is expected to host a series of pre-market
briefings for their members – to introduce their
merchandising and marketing programs for the
opening months of 2014 – as well as product
displays and social gatherings at both the Inter­
national Centre and nearby hotels.
Harbor Loft, a new collection from bedroom
specialist Durham Furniture features
clean lines and a relaxed, timeless appeal.
The collection is available with an optional
two-tone combination of Bourbon and
Sandstone, and can be purchased in any of
Durham’s wood finishes or new Designers
Choice paint colors.
Attending retailers should see a fairly broad
cross-section of Canada’s furniture manufacturing and distribution capacity as they walk
through the halls of the International Center.
Perhaps the largest single exhibitor will be
long-time support Palliser Furniture Upholstery which will continue to occupy Aviation
Ballroom adjacent to Hall 5.
As has been the case for the past several
years, TCHFM will be a strong mattress industry event with Sealy Canada – this country’s
largest mattress producer – continuing to anchor the category. Expected to show at TCHFM
for the first time in 2014 is Tempur-Pedic, the
publicly-held specialty bed maker that acquired
Sealy Canada’s parent company in March 2013.
While neither Simmons Canada nor Serta Canada can be found on the official exhibitors’ list,
both are expected to have a presence in the buying group merchandise spaces. There is also a
wealth of other mattress producers expected
to participate. Among them the Quebec-headquartered foam specialist Zedbed; Rev Sleep,
the Canadian producer of the Natura World,
Sommex, NexGel and ObusForme lines; and
Magniflex, the Italian bedding maker.
COLOURFUL TRENDS RETURN
TO TCHFM
The Montréal-based duo of display designers,
André Caron and Pierre D’Anjou, will assemble
the 13th edition of the Trends Display in the
centre of Hall 5. As usual, the display will feature Canadian-made furniture that’s available }
HomeGoodsOnline.ca
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goers. The colours serve to draw the audience
toward a display and invite them to discover
more about it.”
For Caron and D’Anjou, the Pantone colour
choices underline and highlight the individuality
and artistry that is Canadian furniture. “We live in
a design climate that is absolutely bursting with
creativity and richness. We draw upon two cultures – European and American, we have access to
the beautiful materials, we have a style that pushes into more avant-garde avenues – Canadian furniture is extremely exciting to work with.”
TCHFM attendees will also be invited to cast
a vote for their favourite display and be entered
into a draw for an iPad Mini. One will be drawn
each day of the show from Saturday until Tuesday. The Trends Display will be kicked-off with
a cocktail reception on Saturday, January 11 at
6pm in Hall 5.
THE POP-UP VIGNETTES
ARE BACK
Top left: Inspired by wideopen spaces and soaring
ceilings, dining resource
Canadel’s new Loft
collection combines solid
wood with metal accents
to create an authentic
industrial charm.
Middle: CDI International
will debut its new teak
wood and metal collection
this market. Teak has
been used as a boat
building material for over
a century and is not only
strong, but is resistant
to rot, fungi and mildew.
It is also unusual in that
is not only an excellent
structural timber, but it
can be easily worked and
finished as well.
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HGO merchandiser
at the market while highlighting selection’s
from Pantone’s 2014 colour palette.
The pair draws their inspiration for the display from art, travel and design shows in both
Europe and North America. “This year, the presentation has a Cubist feel and has been inspired
by street art as well as classical references such
as Mondrian,” explained D’Anjou. “The look
is very geometric and features lots of volume
thanks to the elongated walls that are featured
in the three islands.”
This year the pair is putting a stronger focus
on the lighting. “In past years, it was very general and was simply used to illuminate the displays. This year, we are really working on using
spotlights that add warmth and create focal
points that guide the eye throughout the displays,” D’Anjou said.
For the second consecutive year, the Trends
Display will also reflect the latest Pantone
Home + Interiors colour forecast. “This year’s
palettes are going to be such a beautiful marriage with the products that we will be showcasing,” D’Anjou said. “These shades are the
vehicle that we use to communicate with show-
For the third year, design personality Janette Ewen will sprinkle her Pop-Up Vignettes
throughout the International Centre. This time
out, she promises to take market attendees in a
whirlwind trip around the globe as she explores
some of the world’s most unforgettable design
and shopping destinations.
This year’s vignettes have been carefully curated to reflect the personalities of the world’s
most iconic design cities including: Paris, London, Marrakech, St. Petersburg, Rome, Berlin,
Melbourne, Stockholm, Barcelona, New York
City, Miami Beach and São Paulo.
“The idea behind the vignettes is to really
take inspiration from the character of each city. }
The model 41481 stool from Amisco
is part of the metal producer’s
Urban collection. Its retro vibe
and inviting shape is supported by
an ultra-sturdy steel frame and a
well-cushioned seat and backrest.
HomeGoodsOnline.ca
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Top left: For the third
consecutive market,
Janette Ewen’s ‘pop-up
vignettes’ of products
that best highlight
current product and style
trends will be scattered
throughout the halls of
the International Centre.
Top right: Renowned
colour expert Leatrice
Eiseman will brief TCHFM
attendees about the
nine colour palettes that
make-up Pantone’s 2014
forecast at the market’s
conference session.
The perfect sofa shouldn’t
only look good, but should
feel grand. Available as a
sofa, loveseat or sectional,
the Fabiano from Bugatti
features offers a wide
choice of options including
choice of fabric and
foam density for superior
seating comfort.
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HGO merchandiser
Elements such as architecture and textures are
important factors that help to define the personality of each city,” Ewen said. “Rather than
trying to capture a typical city scene, I wanted
to look at what was new and unique in each
location. In São Paulo, it’s all about the use of
colour that defines the shanty towns, while for
New York I wanted to reflect the strong sense of
creativity that resides in all five boroughs.”
She believes that when designing a window
or showroom display, understanding and interpreting trends is always important. More important is creating an atmosphere that elicits
a sense of connection and enthusiasm within
the consumer. Travel, whether real or virtual,
is a perfect jumping-off point. “I think it’s important to think about what gets you personally
excited,” says Ewen. “When you’ve found a destination that really speaks to you, why not use
it as a cornerstone for building a collection or
designing a window?”
The marriage attendees will see between
Canadian pieces and international trends is a
happy one. “Our furniture is a summary of the
global market,” Ewen said. “Canada is a huge
mixing bowl; it’s a blend of so many different
cultures. Canadian furniture designers often
nod to their own personal heritage in their designs, while also giving them a uniquely Canadian flavour. We have so much to offer when
it comes to our designs and we have access to
some of the best resources, like wood and stone,
in the world. You really can’t compare Canada
to anywhere else.”
COLOURFUL CONFERENCE
When it comes to colour, not all shades are
created equal. From retail spaces to furniture
materials, the selected hue can directly impact
the consumer experience. For the second consecutive year, international colour guru Leatrice
Eiseman will take an in-depth look at the nine
colour palettes from the Pantone View Home +
Interiors 2014 trend forecast during the TCHFM conference session.
Entitled Style and Substance: Major Colours
Trends and Directions, this highly visual presentation will showcase how colour can influence design choices for the upcoming year. }
HomeGoodsOnline.ca
< 15
The Buttonback sofa from Palliser
is all dressed up with plenty of eyecatching details, including two sets
of buttons and a contoured welt on
its arms. A sectional is also available
Eiseman has been named among the 50 top stylemakers by Home Furnishings Now; the leading home
furnishings trade publication and is internationally recognised for her work as the executive director of the
Pantone Color Institute and as the director of the Eiseman Centre for Colour Information & Training. She assists companies in making key colour decisions that are
critical to the success of a product or an environment.
The conference will be held on Sunday, January 12
beginning at 10am in Orion B, located in the conference area of the International Centre. Admission is
free for all TCHFM attendees.
For more information about the market or to register,
visit the web site at www.tchfm.com. HGO
MICHAEL J. KNELL is the publisher and editor of
Home Goods Online. He has attended every
Canadian Home Furnishings Market since 1986.
TCHFM AT-A-GLANCE
Site: International Centre; 6900
Airport Road, Mississauga, Ontario,
Canada L4V 1E8 (near Pearson
International Airport, Toronto)
Owned and operated by:
Quebec Furniture Manufacturers’
Association
Dates: Saturday, January 12 to
Tuesday, January 14, 2013
Schedule: Saturday, January 11 to
Monday, January 13: from 9am to
6pm; Tuesday, January 14: from
9am to 12noon.
Who and what: Approximately
300 exhibitors showing residential
furniture, mattresses, lighting,
decorative accessories, juvenile
furniture, and accessories in
Hall 1 to Hall 5. Also includes
the permanent showrooms
inside the SOFA resource annex
of the International Centre and
participating outside showrooms.
TCHFM will also feature suppliers
of related products and services
throughout the market.
Market website: www.tchfm.com
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HGO merchandiser
MARKET ACTIVITIES
Welcome Cocktail Reception:
Friday, January 10 from 5 to 7pm
in the lobby to the International
Centre’s conference facility.
CHFA Awards: The Canadian Home
Furnishings Alliance will host an
awards gala honouring the 2014
Retailer of the Year – Hudson’s
Bay – and the 2013 recipient of
the Lifetime Achievement Award –
Bob Kay, founder and chairman
of Springwall Sleep Products –
on Friday, January 10 beginning
at 7pm. For tickets or more
information, contact Murray Vaughn,
CHFA president at (905) 677-6561 or
by e-mail at [email protected].
The Pantone-inspired Trends
Display Cocktail Party: Saturday,
January 11, beginning at 6pm in Hall
5 of the International Centre.
Beer and Burgers at the Bunkie:
Sunday, January 12, beginning at
5pm in the Hall 1 Mezzanine of
SOFA, the permanent showroom
annex of the International Centre.
Breakfast at the Bunkie:
Tuesday, January 14, at 9am in the
Hall 1 Mezzanine of SOFA, the
permanent showroom annex of the
International Centre.
CONFERENCE PROGRAM
Style and Substance: Major Colour
Trends and Directions with Leatrice
Eiseman: Sunday, January 12 at 10am
in Room Orion B, International Centre.
Admission is free to attendees upon
presentation of a market badge.
Pick it.
Mix it.
Ship it.
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minimize your inventory.
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HomeGoodsOnline.ca
< 17
Made in Canada is a major
merchandising theme for Hudson’s
Bay and when combined with a
leaning towards contemporary
styling, the consumer is confronted
with this assortment from the
Winnipeg-based EQ3 including
the Reverie classic sahara leather
sofa and chair in sterling ivory
fabric. Also seen here is EQ3’s new
custom table collection, featuring
a wood top coffee table and a
market top end table along with
the Martian floor lamp.
Hudson’s Bay is making an
all-out effort to return
department stores to their
glory days as furniture
merchandisers with an
emphasis on fashion. For
this reason, among others,
it has been named Canada’s
2014 Retailer of the Year.
BY MICHAEL J. KNELL
VISIONS
OF FURNITURE
fashion
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HGO merchandiser
t PROFILE
C
ANADIANS EXPECT THEIR
department stores to be experts when it comes to furnishings the home. Indeed, it was
the department stores that set
the tone and standards for the
merchandising, styling and pricing of furniture,
mattresses and major appliances for the rest of
retail to follow until about 25 years ago. They
decided what the consumer bought.
That changed when what were then much
smaller businesses – including such well-known
names as Leon’s and The Brick – grew into the
national chains they are today. Looking at the
business section of almost any major newspaper gives the impression department stores
continue to not only be on their way out of big
ticket home, but out of retail all together.
However, there is at least one believer in the
power of department stores as furniture and
mattress retailers – the Canadian Home Furnishings Alliance (CHFA) which recently named
Hudson’s Bay as its Retailer of the Year for 2014.
This is the second consecutive year the association has awarded the distinction to a department
store. Last year, Sears Canada was the honouree.
The Retailer of the Year Award was established by the CHFA in 2001 to recognize exemplary models of excellence and community service by Canadian furniture retail businesses.
Hudson’s Bay is the upper scale department
store banner of the publicly-held Hudson’s Bay
Company (HBC), which was founded in 1670
and is North America’s longest continually
operating company and one of the oldest commercial enterprises in the world. The parent
also owns décor and accessory specialist Home
Outfitters in Canada and Lord & Taylor, an upscale department store operating some 48 outlets across the north-eastern United States. It
recently acquired another high-end, U.S. based
retail icon – Sak’s Inc., the operators of Saks
Fifth Avenue.
It’s no secret that Canadian department
stores have been struggling in recent years.
Under the leadership of Richard Baker, who
acquired HBC in 2008 (thereby becoming Governor under the terms of its Royal Charter), the
company has refocused its merchandising on
the ‘better’ and ‘best’ categories with a heightened emphasis on fashion.
The emphasis on Made in
Canada has been reinforced with
the company’s long standing
partnership with the Torontobased Marshall Mattress, one
of the first developers of the
individual pocket coil technology.
Seen here is Marshall’s Rest
Assured queen mattress set
that’s upholstered with luxurious
New Zealand wood and Belgium
damask fabric.
A FASHION VISION FOR
FURNITURE
This emphasis has spread through the entire
product assortment, including furniture and
mattresses, according to Alan Asbridge, Hudson’s Bay vice president of living, dining, kitchen and laundry. In his position, he is responsible for all big ticket home merchandising for
the company’s 90 stores across Canada. }
The Pierce dining
collection from
Shermag, a division
of the Quebec-based
Bermex Group, is
a recent edition to
the Hudson’s Bay
furniture line-up.
HomeGoodsOnline.ca
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HGO merchandiser
ea
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the
14.
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HomeGoodsOnline.ca
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©2013 Serta® Inc.
“Taking the cue
from our apparel
businesses we
have edited the
offering and
will continue
to enhance
the shopping
experience with
new brands and
environments.”
Hudson’s Bay has long
been associated with
Canadian interior designer
Brian Gluckstein and his
GlucksteinHome collection
of furniture, furnishings and
accessories. Seen here with the
Kent accent chair are the Ice
Eco Diamond table and a carved
crystal table lamp from the
designer’s Studio collection.
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HGO merchandiser
“We now treat furniture as a fashion department, selling trend right products that are lifestyled to make it easy for the customer to find
inspiring ideas and visualize the pieces in their
homes,”Asbridge explains. “For mattresses, our
focus is on aspirational brands that resonate
with the customer, and driving technology forward within that category.”
This has meant moving away from the style
categories historically common to the department store’s furniture presentation and taking
inspiration from what has always been its core
business: women’s (and, to a certain, extent,
men’s) apparel.
“We’ve shifted away from traditional, and will
further develop and position ourselves in Updated and Contemporary directions. These looks
resonate with our fashion savvy Hudson’s Bay
customer,” Asbridge says. “Taking the cue from
our apparel businesses we have edited the offering and will continue to enhance the shopping
experience with new brands and environments.
With mattresses we’ll continue to refine the assortment to speak to the ‘most wanted’ brands
within the industry, and create a more compelling shopping environment for the customer.”
Shifting to this emphasis on fashion seems
to be paying off as HBC reported sales for the
first half of its current fiscal year were up 4.1%
– although sales for the Canadian operation
(Hudson’s Bay and Home Outfitters) advanced
6.9%, almost twice that of the company’s operations south of the border.
Although the company doesn’t break out category sales, Asbridge says furniture and mattresses sales are growing right along with the
other categories. “In matter of fact, our furniture
and mattress businesses have outperformed industry trends over the past few years,” he maintains. “With a new design and trends focused
team in place we have driven the fashionability
and value forward in furniture and are continuing to excite the customer. Mattresses are on a
similar trajectory.”
The company’s evolving approach to furniture and mattresses has also meant being more
selective about what locations offer the categories. At one time, every one of its stores across
the country featured a furniture and mattress department. Today, furniture is carried on 49 of 90
stores while mattresses are offered on 79 floors.
“Hudson’s Bay went through a right-sizing
exercise across the company – looking at sales
performance by square foot - and while furniture lost space, it has maintained and grown
sales and sales per square foot,” Asbridge explains. “Since we believe furniture is more of a
destination business, the customer wants to see
a broad assortment, and our current 49 doors allow us to do that on a cross-Canada basis.”
Like other serious mattress merchants, Hudson’s Bay is taking a ‘sleep shop’ approach to
the category. “The mattress and bed basics department has evolved into a ‘sleep centre’ strategy, offering complete sleep solutions for the
customer,” he notes, “A single destination for
the customer that will offer them a tailored and
personal view as to their perfect night’s sleep.”
The efforts are even expanding into the
company’s e-commerce space, which Governor
Baker has been touting as a vital part of its future success. Indeed, the company reported ecommerce sales grew 56% on a year-over-year
basis in its most recent fiscal quarter.
“This is a growing opportunity for us. Furniture was launched online in fall 2012, with our
Top 10 sofas,” Asbridge says. “That assortment
has been carefully growing to include top performers, as well as all of the product featured
in our very successful Home Books. We expect
this department to only grow larger as we move
forward for the online business. Almost all our
mattress assortment is online, and gives the online customer a complete and quick overview of
every brand, and we’ll be adding more premium
brands to the assortment shortly.”
The company has also been very careful to
ensure the online assortment follows the instore model, capturing all the price points and
technology differentiators they believe the consumer is looking for.
In in spring of 2013, Hudson’s Bay published its first Home Book, a combination style
guide and catalogue for all areas of the home. }
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“Our exciting plans currently include creating a two-level destination
for home on {floors} six and seven,”
Asbridge says. “The seventh floor,
which hasn’t been retail space for
many years, is currently under construction and will house Kleinfeld’s
Bridal Boutique, fine china and housewares, while sixth will showcase furniture, the recently renovated ‘sleep
centre’ for mattresses and bed basics
as well as soft home.
“Our furniture assortment will be refined for Queen Street to capitalize on
the downtown condo market, as well
as continue to surprise and delight our
fashionable customer,” he adds.
SALUTING EXCELLENCE
Hudson’s Bay wants the
consumer to see furniture as
fashion. In this scene from the
latest edition of the company’s
Home Book, the Umbria
sectional from Natuzzi Editions
has been paired with Enix
stainless steel table collection
from Mobital. Also seen here is
the Vortex floor lamp from Zuo
Modern and the Morgan accent
table from Thomasville.
“We were
exceedingly
happy with
the customer
response and
quickly rolled
out the lifestyle
presentation
to all furniture
stores.”
24
>
HGO merchandiser
“It definitely performed well above expectations, which we were happy to see since it was
a leap forward in style and point of view,” Asbridge reports. “Our Home Books are definitely
part of our plans as we move forward, since they
allow us to message fashion and newness to our
customers. This is all backed up by online trend
features, videos and social media support that
all bolsters the company’s fashion message.”
There has also been a shift towards Made
in Canada – and by extension, Made in North
America – when it comes to selecting product
for the floor, something Asbridge believes “resonates with our target customer.
“They appreciate the quality, value and faster
lead times on custom special orders, as well
as that idea of ‘made locally’,” he adds. “Going
forward, we’re in the process of sourcing more
product and programs that speak to this and
will make sure that message reaches both new
and existing customers.”
This was also the year in which Hudson’s Bay
unveiled its new concept store in downtown Vancouver, the first to receive a re-worked floor plan
and assortment for furniture. “For the first time
we were able to show all of home on one floor,”
Asbridge enthuses. “The open-concept, loft-inspired space allows us to showcase lifestyle presentation by décor style for the first time.
“We were exceedingly happy with the customer response and quickly rolled out the
lifestyle presentation to all furniture stores,”
he adds.
The concept is expected to be driven home
when the renovations to the company’s flagship
store on Queen Street in downtown Toronto are
seen for the first time sometime in the first half
of 2014.
“Over the years, Hudson’s Bay Company has helped move our industry to new levels of excellence,” CHFA chairman Laine Reynolds said when announcing the company’s selection as the 2014 Retailer of the Year this past
November.
“With their growing brand status, new in-store
transformation and their sustained commitment
to the home furnishings industry; as well as being a great example of a business enterprise that
generously gives back to the community, Hudson’s Bay Company is a very worthy recipient of
this coveted award,” he continued.
Since 2005, the HBC Foundation has made
significant donations to Canadian charities
across the country including Canadian Olympic Foundation and the Canadian Paralympic
Committee; the Breast Cancer Research Foundation; Habitat for Humanity and the Canadian
Red Cross.
For the past seven years, it has also been
supporting Canadian athletes through various
sport organizations and has donated over $35.5
million to help support athlete development,
training and coaching.
Hudson’s Bay is the 13th recipient of the
CHFA’s Retailer of the Year award. The 2013
honouree was Sears Canada and the first recipient was the late Tom Leon of Leon’s Furniture
in 2002. Other prior recipients include Dennis
Novosel of Stoney Creek Furniture and Bill
Tepperman of Tepperman’s Furniture.
A gala dinner celebrating Hudson’s Bay’s
contributions to the industry will be held immediately prior to the opening of the 2014 Canadian Home Furnishings Market. HGO
MICHAEL J. KNELL is publisher and editor of
Home Goods Online.
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< 25
RETAIL u
BRANDSOURCE
sets new design direction
E
Mega Group’s primary national go-to-market strategy added four
new stores to its network in the second half 2013. Each reflects a
new attitude towards the consumer as the network of independently
owned stores looks for new ways to grow. The goal to create an
environment where she is comfortable while telling her she’s the
store’s main focus. BY MICHAEL J. KNELL
VERY FURNITURE RETAILER IN THE COUNTRY
is looking for growth. Admittedly, growth takes different forms depending on circumstances. Most are
looking to grow the bottom line, to be more profitable. Some are looking to grow profits by growing sales, others
by reducing costs or some combination of the two. Still others
want more physical storefronts.
By that measure, the Saskatoon-headquartered BrandSource Canada may be considered one of the fastest growing furniture, mattress and appliance retail networks in the
country, adding four stores to its network in the second half
of 2013, including the first-ever outlet it has built from the
ground up. The remaining three stores were all conversions
to the network, which is the primary go-to-market strategy for
the co-operatively owned Mega Group, the largest Canadian
furniture-focused buying and marketing organization.
Indeed, few other national networks are adding stores at the
same pace in 2013, if at all. Only two other national retailers
opened four or more new stores this year: Leon’s Furniture, this
country’s largest full-line furniture retailer opened one new cor-
BrandSource Ottawa owners Brian Janna, Richard Laplante and
Marc-Olivier Laplante are seen here at the store’s grand opening in
early September.
26
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HGO merchandiser
porate store and three new franchises; and, Sleep Country Canada, which opened five stores in and around Halifax this past
summer, making its long-awaited entry into Atlantic Canada.
Indeed, the most recent Annual Retail Trade Survey from
Statistics Canada pointed out that the total number of independent furniture stores in operation fell by 11.7% between
2008 and 2011, the last year for which figures are reliable.
This isn’t to say other stores haven’t opened in 2013, they
have. But, it seems store openings have become the exception,
rather than the norm.
NEW THINKING
Especially with its first built-from-the-ground-up BrandSource
Canada outlet in Ottawa, Mega Group is taking a new, highly
contemporary approach to big ticket home store layout, design and merchandising.
BrandSource Ottawa’s interior was created by Mega’s longtime director of commercial design Carole Vallières and designer Carrie Chubey. This team also designed two of the remaining three stores that opened in recent months.
“It’s all about the consumer – she was our main focus,” Vallières said when describing the store’s interior. “The [Ottawa]
store is close to a residential area where two types of clientele
coexist: a young, hip crowd living in condos; and, a more conservative clientele looking for classically-styled furniture.”
To answer the needs of these two specific customer groups,
the store was thought out in two different styles which Vallières
labelled Urban and Timeless. Each is represented in a complete
mock house display located in the store’s entranceway.
“Signage is a key component of the consumer’s venturing
into the store,” Vallières explained. “As soon as she crosses the
front doors, she is lead to choose the style that corresponds
to her taste right away. The signage indicates and leads the
consumer in the specific zone representing the style she has
chosen. In each area, she can find a living room, a dining or }
Owners Vivi Chedica, John Chediac,
and their sister Renée Cumminger are
seen here outside Chediac BrandSource
Home Furnishings in New Glasgow,
New Brunswick. The second generation
full line furniture is one of the latest
HomeGoodsOnline.ca
addition
to the national network.
< 27
Well displayed
accessories are a
key part of Chediac
BrandSource’s
merchandising
strategy.
The store’s merchandising
profile focuses on
contemporary designs
targeting the urban tastes
of new condo dwellers, such
as the living room groups.
bedroom in perfect co-ordination. This type of setting also mirrors the open concept of most homes.”
The 16,000 square foot store – located at the intersection of
St. Laurent Blvd. and Belfast Road on outskirts of downtown Ottawa – also sports Mega’s new Sleep Experience gallery concept.
The store also features a lounge complete with a self-serve
coffee bar. “This offers a relaxing environment to discuss her
next purchase,” she noted, adding the washrooms feature hotelstyle hand towels to enhance the at-home feeling. The change
tables also offer diapers for harried parents.
The store is owned by Richard Laplante, his son Marc-Olivier
Laplante and Brian Janna. The senior Laplante and Janna are
seasoned home furnishings retailers but are new to Mega Group
and BrandSource Canada. The younger Laplante serves as the
company’s controller.
Sales associates are all equipped with iPads, allowing them to
respond immediately to most every question a customer might
ask. Among the floor’s more prominent furniture suppliers are
Palliser, El Ran, Bugatti Design, Magnussen Home and Ashley.
The mattress assortment includes collections from Sealy and
Tempur-Pedic, among others.
“We’re very excited with the collection we’ve assembled with
the help of BrandSource. We’ve added Canadian-made products
to our collection as well as a variety of brands to respond to each
customer’s taste,” Richard Laplante said. “We wanted a unique
and ‘wow!’ store and we think we’ve got it.”
“This new store has lots of advantages for us,” Brian Janna
added. “BrandSource responds to the customers by offering
them unsurpassed customer services and customized solutions
fitted to their taste”
Michael Vancura, Mega’s executive vice president of retail,
said Laplante and Janna were two examples of the types of
people Mega want to attract to the co-operatively owned buying
and marketing group.
28
>
HGO merchandiser
“They were looking to migrate to a more contemporary
merchandising offering to serve the growing urban tastes
of new condo owners,” he noted. “They are also interested
in Mega’s more collaborative, co-op driven approach that allows a fair amount of regional customizing while still receiving all the support today’s retailers require, such as design,
merchandising, marketing, web, social media, sales and sales
management training.”
Vancura also believes Ottawa BrandSource is also a good
example of where Mega wants to take its national go-to-market strategy.
“This first from-the-ground-up store is well designed and
well located in an urban market and will be a showcase of
what BrandSource is and will serve as proof that this type of
store can and will generate volume and profit,” he said.
KINDRED SPIRIT
Walk through the front door at Meubles & Nous in SaintGeorges de Beauce – a small city of 33,000 or so people 100
kilometres south of Quebec City – and the similarities to
BrandSource Ottawa are almost immediately apparent, including the fact it’s in a new building. The two are obviously
kindred spirits.
But the differences between the two are also important.
Most significant is Meubles & Nous is what Mega calls a
BrandSource ‘authorized’ dealer. Owners Michel Tardif and
Karline Turcotte receive almost the same level of service
and support as a full-fledged Ameublesment BrandSource
(known as BrandSource Home Furnishings throughout English Canada) member store, but it doesn’t carry the banner as
part of its corporate identity.
Tardif, who was elected to Mega’s board of directors in
2011, and Turotte acquired what was then a 62-year old retailer called Meubles Jacques Veilleux in 2008. Earlier this year,
they launched a new branding initiative for the store, including moving into a new 27,000 square foot building under a
new name – an investment totalling some $4 million.
For Meubles & Nous, Vallières created four distinct colourcoded sections for different styles of furniture as well as galleries for bedding and major appliances.
“The owners wanted us to develop a signature style for
them,” she said. “The store was divided into four different }
ANNI
1962-2012
YEARS
1962-2012
HomeGoodsOnline.ca
< 29
The interior layout of Meubles & Nous
is designed to allow the consumer to
move about easily. Aisles through the
store are well signed and colour coded
to reflect the varying styles it offers.
areas with different collections. Main areas were conceived to
create a unique concept – called quartiers – and were named
Movi, Vivia, Klass, and Urba. All have different styles which are
consistent throughout the areas. Urba, for example, features furniture with a modern touch.”
The mattress department is called Rèva.
The store features colour co-ordinated signs, maps, and pathways to direct visiting customers to the area she’s looking for.
These colour motifs are also found and repeated in all featured
advertising and flyers, including the store’s web site (www.meublesetnous.com).
Like BrandSource Ottawa, Meubles & Nous features a working coffee bar that serves customers throughout the day.
REVITALIZING THE STORE
ADVERTISERS’ INDEX
During the closing weeks of 2013, two other long-time Mega
Group members converted to the BrandSource Canada concept.
What is now called Chediac BrandSource Home Furnishings
is a second generation family business operated by John Chediac, Vivi Chediac and their sister Renée Cumminger. This was
30
Pages 2-3
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41 Butler Court
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T: 800.661.7313 F:
905.427.2166
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Page 5
Natura World
c/o Rev Sleep Corporation
53 Bakersfield Street
Toronto, ON M3J 1Z4
T: 800.567.7933 F:
888.567.7934
www.naturaworld.com
>
HGO merchandiser
Page 7
Durham Furniture
450 Lambton Street W
Durham, ON N0G 1R0
T: 519.369.2345 F:
519.369.6515
www.durhamfurniture.com
Pages 11 and 23
Canadian Home
Furnishings Market
101-1111 Saint-Urbain
Montreal QC H2Z 1Y6
T: 514.866.3631
F: 514.871.9900
www.tchfm.com/en
the one store that required no design work as it was completed renovated just two years before. What makes this store,
which can be found in New Glasglow, Nova Scotia, is that
in addition to furniture and mattresses, it is also one of the
area’s premier floor covering retailers. It is also a member of
consumer electronics specialist Audio Video Unlimited as
well as white goods division, Appliances Unlimited.
The fourth addition was the newly rebranded Ameublement BrandSource Desrocher in Ste-Thérèse, Quebec, on
the northern outskirts of Montreal.
Formerly known as Meubles Dubois, this 10,000 square
foot store was acquired by the husband and wife team of
Ghislain Guindon and Andrée Labrosse and their children,
Geneviève Guindon and Marc-Olivier Guindon – who will
be the new store’s manager – in August 2013.
This is the family’s third outlet, which includes the first
Ameublement BrandSource Desrochers in Plaisance, Quebec – about two-thirds of the way from Montreal to Toronto.
Their third outlet is Meubles La Détente, a high-end store in
Gatineau, Quebec that serves the National Capital Region.
Most retail experts agree: renovation and refurbishment
generates new sales dollars and new profits for the retailer.
With its new design direction for BrandSource Canada, Mega
Group is hopefully setting the stage for member growth.
Since rolling out the network in March 2012, BrandSource
has added some 13 outlets it number, bringing the total to
156 or so. Only two names in big ticket have more stores in
Canada: the aforementioned Leon’s, which with acquisition
of arch-rival The Brick in March 2013, now operates some
311 stores under its various banners. Big ticket leasing specialist Easyhome operates some 183 corporate stores in Canada as well as 52 franchise locations across North America.
Another BrandSource store is expected to open in British
Columbia over the next few weeks. Michael Vancura noted
Mega’s target for 2014 is to add another ten stores to the
BrandSource Canada network. HGO
MICHAEL J. KNELL is publisher and editor of Home Goods
Online.
Page 13
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Page 15
Brentwood Classics Ltd.
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(905) 761-0195
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Page 17
Magnussen Home
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66 Hincks St, Unit 1
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T: 519.662.3040
F: 800.267.3278
www.magnussen.com
Pages 20-21
Serta Canada/Star
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Page 25
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T: 800.388.2640
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Page 29
Magniflex
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T: 905.481.0940
www.magniflex.com
Page 31
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T: 800.567.7933 F:
888.567.7934
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Call us today for an appointment with your local
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HomeGoodsOnline.ca
< 31
Bob Kay (centre),
chairman and founder
of Springwall Sleep
Products, is seen here
with his sons Boyd (left)
and Greg (right). Kay
is the 2014 recipient
of the Canadian
Home Furnishings
Association’s Lifetime
Achievement Award.
Keeping up
with BOB KAY
I
N JANUARY 2014, SACKVILLE, NEW BRUNSWICK-
born mattress mogul and outstanding entrepreneur Bob
Kay will become the 15th recipient of the Canadian Home
Furnishings Alliance’s Lifetime Achievement Award,
joining such industry stalwarts as the late Orville Mead and
Art DeFehr, chief executive officer of Palliser Furniture.
The CHFA established the award in 2000 to recognize those
individuals who over their lifetime have made exemplary and
sustained contributions to the Canadian furniture and home
furnishings industry as well as the communities in which they
live. It’s hard to argue that Kay, who has now left most of the
day-to-day heavy lifting to his sons Boyd and Greg, doesn’t fit
the bill.
While Kay’s primary passion and focus has always been
Springwall (which produces the Chiropractic, H2 Chiropractic and Steven & Chris mattresses brands, among others), he’s
32
>
HGO merchandiser
dipped his toes into a startling number of unrelated ventures —
often quite successfully. A quick glance at this CV would make
anyone feel lazy, as he presided over a growing company while
indulging his interests in bottling Coca Cola; holding and development companies; cable companies; cell phone service
companies; and, restaurants.
Kay, who majored in business administration at Sackville’s
Mount Allison University before landing a job as an industrial
rubber products salesman, fell into the furniture world when
his affinity for selling put him in touch with local furniture
sales reps and, later on, the president of the now defunct Beverly Bedding Company in Toronto.
“They hired me as sales supervisor and I was there for three
years,” Kay recalls. “After that, I came back [to Moncton] to
buy a small mattress manufacturing concern. My father and
grandfather had worked in stove manufacturing and I was al-
t SPOTLIGHT
It’s rare to meet an entrepreneur
who has kept one business
afloat for half a century, let
alone several. For Bob Kay,
chairman and founder of
Springwall Sleep Products,
growing several successful
businesses at once — while
staying focused on mattresses —
was a welcome challenge.
BY ASHLEY NEWPORT
ways around [manufacturing] or close to it. I think it’s in my
blood. When I got into mattresses, it carried on from there.”
And carry on it did. On April 23, 1964, Atlantic Sleep Products was born. Although the beginning was challenging — according to a 1985 article in the Atlantic Insight, the company
only netted $150,000 in sales its first year — Atlantic grew by
staying on trend and focusing on its chiropractic line.
“[The Chiropractic sleep sets] were developed by Springwall in Minneapolis with a chiropractic school that had a testing laboratory,” Kay explains. “They built a mattress that was
the right type of sleeping mattress, and we were able to obtain
the name Chiropractic and the endorsement of the American
Chiropractic Association.”
After first establishing Atlantic Sleep Products, Kay began
buying Springwall licenses. By 1997, he owned all of the company’s licenses in Canada, the U.S. and beyond and became
the president of the entire Springwall brand. Under his stewardship, the once small Maritime concern grew to include major manufacturing facilities in Mississauga, Ontario and Calgary in addition to the company’s headquarters in Scoudouc,
just outside of Moncton.
Springwall now boasts 250 employees and is probably the
largest Canadian-owned and operated mattress manufacturer. In addition to independent furniture and mattress retailers, the company includes both Sears Canada and The Brick
among its retail partners.
Over the years, Kay made a few changes to the brand, but
says his alterations were far from radical. “There was nothing
major, just constant realignment,” he says. “We just kept expanding the Chiropractic and Springwall brand. We closed and
opened plants, just the regular parts of running a business.”
But small changes or not, something about Kay’s vision
resonated with retailers and consumers, and he attributes the
brand’s longevity to the product. “It’s a good product and we
stand behind it.”
Building an eternally marketable product is hard enough
when it’s your sole focus, so it seems like it would be difficult to
sustain one company while jumping – with aplomb and great
success – into other ventures.
While Kay was building Springwall, he was active in the local Coca-Cola bottling plant – Tennant Beverages N.B. Ltd. – as
well as in Stephen International Inc., a holding and development company, which he joined as a director and shareholder
beginning 1966. In 1974, he launched Cable Service Ltd. along
with ten other shareholders (he eventually became the sole
owner). Kay ran the cable company for almost 20 years, studying the field with engineers and obtaining a license to provide
cable television to the greater Moncton area. The company
launched pay-tv in 1983 and debuted a community service
channel that allowed local groups to broadcast homegrown
content. He sold the company a decade later.
While running Springwall and Cable Service, he launched
Celserve Communications, the first cellular telephone service
in New Brunswick. In 1993, he got the opportunity to indulge
his interest in development launching condominium builder
Cambridge Developments Inc. Two years later, he opened
Maverick’s Steakhouse and Grill – a fine dining restaurant
that’s now run by his grandson Ryan Kay.
Kay also immersed himself in charitable and community work by getting involved in the Canadian Federation of
Independent Business, Young President’s Organization, the
Moncton YMCA, Friends of the Moncton Hospital, PEI Boys
and Girls Club and supporting Saint Mary’s University in Halifax. He also established the Robert G. Kay/Killam Properties
Inc. Entrance Scholarship Fund at Mount Allison University.
When asked why anyone would want to juggle several demanding enterprises at once, Kay is nonplussed.
“Why spend energy climbing Mount Everest? I don’t know.
When opportunities came along that interested me and were
a challenge, I had to take them,” he says. “In the 90s I worked
with an open door policy in business and many people used }
HomeGoodsOnline.ca
< 33
The ‘Geneva’ seen here is part of the
Chiropractic collection manufactured by
Springwall Sleep Products. This 11-inch
deep mattress features seven inches
of bio foam, supported by two inches of
its Convergency-brands latex and two
inches of AquaGel memory foam. It is also
encased with an air flow-through system.
The mattress is complimented with by the
company’s DuraSystem foundation.
Part of the H2 Chiropractic collection,
the ‘Peerless’ is constructed using a
2550 stacked coil innerspring system.
It is also foam encased with an airflow system and its plush pillow-top
construction includes the company’s
AquaGel memory foam.
Bob Kay (third from
right} is seen here
celebrating the 25th
anniversary Springwall
Sleep Products with a
group of head office staff
member. The company
will be 50 in 2014.
34
>
HGO merchandiser
my open door instead of others, so I moved the
Springwall plant into the city and ended up with
some extra time.”
And while Kay still has hands in some big
name operations – such as the publicly-held Killam Properties, an owner and manager of apartment buildings and manufactured home communities, and shredding company Redishred
Capital Corp. – it’s Springwall that carries on his
legacy. So, with so many ventures under his belt,
it seems prudent to ask: why mattresses?
“Because of the style and constantly changing
environment,” he says. “It’s not same old, same
old type of manufacturing. It’s not like tires,
where the circle just never goes away. It’s more
challenging.”
What’s also challenging is maintaining a
family business, but keeping the company
alive and thriving is one of Kay’s proudest
achievements.
“[One of my greatest achievements] is having
a 50-year-old company that I started. My sons
now run the business and handle the day-to-day
and make decisions while I stand aside. I still attend board meetings and put my two cents in and
we’ve managed to get along in that process very
well. It’s a family achievement, and sometimes it’s
hard for a family to do that.”
As for family, both Boyd and Greg Kay
credit their father with inspiring their
business sense.
“My dad was born an entrepreneur
and I have benefited greatly from his
energetic and innovative spirit,” says
Greg Kay. “In business, I was impressed
with his leadership and his way of doing things such as his vertical integration of manufacturing processes and his
constant search for new and better ways of doing
things. He is a true builder, be it mattresses, buildings, systems. As a father, he has been a good role
model and instilled in me a good work ethic.”
Family businesses – like any business – have
their benefits, but they also have unique challenges in the sense that it’s sometimes not possible
to leave work at work. For Kay, it’s important to
understand both the perks and fallbacks of running a close-knit, family-run operation.
“The great benefit in a family organization
is the family sticks together and you’re not concerned about losing your top people. I think it’s
also a challenge to try to stay a family. Sometimes families don’t get along that well. But
[companies run by families that get along] have
strong companies and develop a family-staff.
Our Moncton plant manager has been with us
for over 30 years. My assistant has been with me
for almost 20 years. We have lots of very longterm employees, and that stops a lot of turmoil
in business,” says Kay.
As for lack of turmoil, Boyd Kay is also pleased
with his time in his family-run, distinctly Canadian operation.
“I have known Bob Kay for over 50 years, working for and with him since I was five-years-old,”
says Boyd Kay. “I even lived in his home for quite
some time! His honesty and integrity, along with
a very direct style, always lets you know where
you stand. From raising cattle and buffalo to
driving trucks to working in the upholstery and
Springwall factories, it was all an enriching and
rewarding experience. I always felt someone had
my back. I look forward to working another 30
years with RG.”
While it seems likely that Springwall will
still be churning out its celebrated mattresses
in 2043 – the company boasts very low returns
compared to other major retailers – Kay acknowledges that the playing field has changed since
he first stepped up to the plate in the 60s.
“It would be tough [to start a Springwall] in
2013,” he says. “Not because people can’t do it,
our industry has talented people, but because
the customer base has shrunk. There used to
be a lot of independent retailers, but the market
has been taken over by big retailers and if you’re
small, you often belong to a group and you’re
dealing with whoever is running the group. If
you’re a start-up, you have to get under the arm
of a large retailer and have an in before starting a
business. I see that as the main problem. Financing isn’t any easier these days and everything
you’re dealing with is big – big banks, big retailers. Mom and Pop operations have difficulty
with financing and reaching customers, which is
something that’s happened in most industries.”
Having said that, Kay remains optimistic
about the industry’s future.
“I’m hopeful for it,” he says. “It goes through
phases and I don’t agree with some of the new
materials [coming into the market]. There’s
too much focus on memory foam. My idea of
a good sleeping surface is firmer than some
of the products out there today. But there’s
always phases and changes because someone comes along with new materials that can
change the industry quickly. The industry in
general has changed a lot over the past five to
seven years but I believe it’s stabilizing. It
will find its way and make better and better products.”
As for Bob Kay himself, it seems like
stepping away from the day-to-day operations would be a challenge for a man
who filled his sparse spare time with
complex business ventures. While Kay
says that he has indeed left the heavy
lifting to the next generation of family
members (and to the others who now
run his side projects), he says he’s still
got enough going on to keep him on his
toes.
“Oh, I keep busy, believe me!” he says.
“With meetings and projects I keep busy
every day.” HGO
A frequent contributor to HGO Merchandiser, ASHLEY NEWPORT is a Torontobased freelance journalist who primarily writes for trade and business
publications. Her specialties include
food, hospitality and emerging social/
business trends.
ALL ABOUT BOB
Some business associates weigh in on their
experiences with Bob Kay
LARRY NELSON, president and chief executive officer of the Lounsbury
Group of Moncton, New Brunswick, the owner of the five-unit Lounsbury
Furniture: “I have known Mr. Kay for over 45 years. He was and is a pioneer
in the bedding business, starting out as a very small local manufacturer
and growing that business into one of the largest and oldest bedding
companies in North America.
“His word is his bond, a handshake will seal any deal. He has been a
personal inspiration to me, with his sage advice, along with his great grasp
of what is going on in the marketplace, always giving solutions to the
problems our industry might be facing at any particular point in time.
“Another quality I have most enjoyed is his ability to ask your opinion, a
skill he has honed from his many business successes and also from a few
missed opportunities.
“He is a realist who has given many individuals great opportunities to
become better people.
“We need more people like Mr. Kay; he deserves any and all accolades
that come his way.”
ALLEN SKALING, secretary-treasurer of Springwall Sleep Products:
“I have worked for Bob Kay for over 39 years. Bob is a hands-on person
who is able to assess a situation quickly and get to the heart of the
issue and put it in perspective. He leaves the details of what to do to
his employees. He has always said that he never faults an employee for
making a decision, unless he neglects to fix a previous decision that was
either wrong or only partially right. He is a tough negotiator, but once
the deal is struck he lives up to the deal. He has taught me that if you
have to substitute, you never sub down, always up. Your reputation is
on the line and second best is not good enough. This holds true in
every business he is involved.
“I do not believe he will ever ‘retire’. If something piques
his interest he is going to get involved – enthusiasm and
determination will always override age.”
LAINE REYNOLDS, chairman of the Canadian Home Furnishings
Alliance and vice president of sales for Superstyle Furniture:
“Bob Kay is a successful, high-energy business entrepreneur who
through his vision and leadership has developed the Springwall
brand into a significant bedding resource in a highly competitive
sector of our industry. In recognizing his extensive professional
accomplishments and his commitment and dedication to
community involvement, Bob is a most deserving recipient of the
CHFA Lifetime Achievement Award.
“Many people have benefitted from Bob Kay’s risk taking
spirit. In the true style of an entrepreneur he is able to perceive
opportunities and take advantage of them. Bob Kay is not
afraid to take risks into the ‘unknowns’ of business, but always
with a calculated assessment of the possible outcomes, and
respect for the value of budgets and the planning process.”
HomeGoodsOnline.ca
< 35
BY THE NUMBERS u
MODEST
growth
AHEAD
Furniture store sales should grow modestly
in 2013. So should those of home furnishings
stores. The consumer’s net worth is improving
and the housing market continues to be
relatively strong. These should result in a very
measured level of growth for big ticket retailers
in the months ahead. BY MICHAEL J. KNELL
O
NE THING IS CERTAIN: 2013
won’t set new sales records for the
owners and operators of furniture,
mattress and major appliance
stores in this country. This isn’t to
say things haven’t improved over 2012, they have,
but the growth rates seen in these heady years before the Great Recession of 2008 aren’t likely to
come back in the foreseeable future.
While there are certainly exceptions to be
found, most retailers – whether the owner of a
comparatively small family-owned enterprise or
the leader of our largest full-line furniture merchant – have found growth hard to come by and, in
some cases, extraordinary growth has come from
business activities other than the merchandising
and marketing of our industry’s core product lines.
Perhaps the industry’s most significant single
event of 2013 was the acquisition of The Brick,
the Edmonton-headquartered high-impact promoter, by its arch-rival, the Toronto-based family
controlled Leon’s Furniture in a deal valued at just
over $700 million, which incidentally may be the
largest deal of its type in the industry’s history.
36
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HGO merchandiser
The other major news story of interest to furniture, mattress and major appliance retailers is
the continuing sad saga that is Sears Canada,
which continued to struggle throughout 2013.
The multi-channel retailer turned much of its
prime downtown real estate into cash throughout the year and invested little or none of the
proceeds into the process of returning itself to
its glory days as a this country’s ‘go to’ retailer.
The company also admitted that by the end of
the third quarter, its sales of major appliances
had fallen 2.5% year-over-year and sales in its
‘home and hardlines’ segment (which includes
furniture and mattresses) was down 8.9%.
On the other hand, it unveiled a new store concept for its Sears Home network albeit at only two
of its 40-odd locations. While the concepts themselves earned considerable praise, the question is
will it be expanded across the rest of the network?
The really big news on the retail scene in 2013
was the entry of cheap-chic specialist Target into
the Canadian market. Their splash wasn’t as big
as expected, but when linked to the impending
arrival of other big U.S. retail names – including
Nordstrum and Saks – has ignited concern about
an impending American invasion. Fortunately,
most of these big names are not active furniture,
mattress and major appliance merchants. With
the exception of the already established Ashley
Furniture Home Stores and La-Z-Boy Furniture
Galleries, there has been little expressed desire
by other members of the Top 100 U.S. furniture
retailers to enter the Canadian market.
THE STATE OF THE
CANADIAN CONSUMER
For the second or third consecutive year (depending on how one views the data), the Canadian consumer showed few signs of returning
to the spending habits she employed before the
meltdown of 2008. But this doesn’t mean there
isn’t any good news. The most significant piece
being that, according to Statistics Canada, 69% of
all Canadian households own their home – giving her a sense of financial stability not shared
by her cousins in the United States.
Equally important, on a per capita basis, the
typical Canadian consumer’s net worth breached
the $200,000 mark for the first time ever in 2013
with household net worth coming in at twice that.
Offsetting these advances are several factors,
perhaps the most important of which is average
household debt which rose to $1.64 for every $1
of disposable income in the closing months of
2013 – a new record. Furthermore, median household income is stuck in a rut at $68,000 – a figure
that has changed little in the past five years.
While overall household spending was up
2.7% in 2011 – the last year for which figures are
available – spending on household furnishings
fell 2.3% to $864, although spending on major appliances was up 7.7% to $448.
With unemployment stuck at just over 7%
for most of 2013, consumers remain concerned
about job security, which when coupled with income stagnation and rising debt levels is causing her to be more cautious, especially when it
comes to furniture, mattresses and, to some extent, major appliances.
In recent years, consumer confidence has become the most important bellwether to watch
when forecasting the fortunes of furniture, mattress and major appliance retailers – much more
so that the state of the housing market or any
other measure. The three major indices published in this country – by the Conference Board
of Canada, TNS Canada and Neilsen Canada –
all feature a ‘major purchases question’, which
basically asks “is now a good time to make a
major purchase such as a house, car or other big
ticket item?”
All three surveys show that those saying now
is not a good time to make a major purchase
outnumber – by a relatively small, but nonetheless real margin – those holding the opposing
view. In fact, the TNS survey shows its ‘buy index’ fell to the lowest level seen in several years
in October 2013. }
Seen here are the four
executives that steered
the sale of The Brick,
the Edmonton-based
high impact promoter,
to its arch-rival, Leon’s
Furniture of Toronto.
From left to right are:
Bill Gregson, then
executive chairman
of The Brick; Marc
J. Leon, chairman of
Leon’s Furniture; Vi
Konkle, now the former
president and CEO of
The Brick; and, Terry
Leon, president and CEO
of Leon’s Furniture.
(CNW Group/Leon’s
Furniture Limited)
HomeGoodsOnline.ca
< 37
The publicly-held and
family-managed Leon’s
Furniture became one
of the largest furniture,
mattress and major
appliance retailers
in North America
when it completed its
acquisition of archrival The Brick in late
March 2013. Seen
here is their store in
Kitchener, Ontario.
TRADITIONAL DRIVERS STABLE
Conventional industry wisdom has always
linked housing starts and sales to retail sales of
furniture, mattress and major appliances. While
it’s not as powerful an indicator as it once was,
people who buy homes eventually and usually
furnish them, so it remains important to understand the direction the housing market is taking.
The much anticipated ‘housing bubble’ failed
to burst in 2013, indeed there is an emerging
view among economists and academics that the
Canadian housing market isn’t overvalued and
won’t crash because the underlying economic
fundamentals support the current pricing and
value model. If this view holds sway, this is good
news indeed for Canadian furniture, mattress
and major appliance retailers.
The Canada Mortgage & Housing Corporation (CMHC) is forecasting housing starts will
end up at 182,800 units in 2013 – a 15% drop from
the 214,827 units built in 2012 and the first time
in almost a decade where they haven’t at least approached the 200,000 mark. The point forecast
for next year is 186,600 units. Most experts agree
this level of starts is in line with Canada’s demographic fundamentals; that is, it supports the
pace of new household formation in this country.
For the resale market, CMHC is offering a
point forecast of 448,900 units to be sold by the
Canadian Real Estate Association’s Multiple Listing Service (MLS) this year – which is essentially
unchanged from the 453,372 units sold in 2012.
In 2014, the point forecast is expected to gain
4.2% to 467,600 units.
The national average price for a house sold
through the MLS is expected to reach $374,800 at
the end of 2013, a year-over-year gain of 2.7%. It is
forecast to gain a further 2.1% to $382,800 in 2014.
The second traditional driver is interest
rates. Here, the news for big ticket retailers remains favourable as the Bank of Canada isn’t
expected to allow rates to rise significantly
over the next 12 to 18 months. However, the
data suggests low interest rates have done
more to fuel the housing market and automotive sector, both of which have outperformed
both the economy as-a-whole and the retail sector as-a-whole for past few years. Indeed, CREA
has attributed much of 2013’s sales activity to
consumers seeking to enter the housing market ahead of any upticks in mortgage lending
rates, which actually saw some minor increases
in the second half of the year.
FURNITURE AND HOME
FURNISHINGS STORE SALES
Statistics Canada’s monthly Retail Trade report
details sales by type of store and is probably the
industry’s best ongoing performance barometer.
It should be remembered Statistics Canada
defines a furniture store as a retail establishment
that generates 51% or more of its annual revenue
from the sale of furniture and mattresses. The
balance can be anything at all, but the typical
store’s product profile includes major appliances,
consumer electronics, floor coverings and other
home furnishings – all to varying degrees.
Just prior to press time, Statistics Canada reported actual (not seasonally adjusted) furniture
store sales for the first nine months of 2013 were
$7.20 billion, an uptick of 2.7% over the $7.03 billion for the same period of 2012, marking the
third consecutive year of improvement in the
January to September period.
Home furnishings stores – which sell everything from floor covering to lamps and lighting,
Furniture Store, Home Furnishings Store, Electronics & Appliance Store Sales
In Current $ (thousands). From January 2011 to September 2013
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Furniture stores
704947
650117
722271
761908
785142
799586
826758
829836
835617
808489
815420
915784
728510
658965
756027
Home furnishings stores
391654
348018
428275
438354
447892
470071
447580
486763
461727
496410
527152
627368
401223
387525
439708
Electronics and appliance stores
1067409
38
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HGO merchandiser
956324 1148365 1071996 1107170 1122182 1144935 1245728 1263133 1215159 1389186 2251857 1056285
955301 1121660
linens, decorative accessories and wall art – rungup year-to-date sales for the first three quarters
of $4.06 billion, up 2.3% compared to $3.98 billion
for the prior year.
The third member of the big ticket home
group – electronics and appliance stores –
weren’t having as good a year as through to the
end of September were $9.94 billion, down 3.9%
from the $10.3 billion rung-up during the comparable period of 2012.
How are these merchants going to end out the
year? That’s hard to say, especially since furniture stores recorded a marginal 0.8% sales uptick
to $9.53 billion in 2012 but still well below the
high water mark of $10.2 billion left in 2008. It
would not be unreasonable to suggest 2013 will
end up slightly – say 1.5% – ahead of 2012.
Home furnishings stores fared much better
as their 2012 sales totaled $5.69 billion, a gain of
2.1% over the $5.57 billion for 2011. And the pace
they’re going suggests their sales will advance
Apr-12
May-12
Jun-12
Jul-12
Aug-12
by at least 2% in 2013. After all, it’s less expensive
for the consumer to change out the lamps and
pillows in her living room than it is to replace an
entire upholstery suite.
Electronics and appliance stores are generally
expected to suffer their third year of declining
sales in 2013. They fell 6.0% last year to $14.0 billion, and unless the Holiday Season is very good
to them they will probably not make that mark.
Considering the furniture, mattress and major
appliance retailers’ traditional business drivers
are somewhat in their favour, 2014 should be another year of modest growth. But it will probably
be 2016 before sales are back to their 2008 levels. Allowing for inflation (albeit very modest), it
could be 2018 before the industry has recovered
from the Great Recession. At least, things are
moving in the right direction. HGO
MICHAEL J. KNELL is publisher and editor of
Home Goods Online.
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Sears Canada turned a
number of their prime
store locations into cash
by selling the leases
back to their landlords.
This has caused much
speculation about the
future of the multichannel retailer, which
continues to be a leader
in the sales of furniture,
mattresses and major
appliances.
Jun-13
Jul-13
Aug-13
Sept-13
728197
795918
816100
836264
855249
850990
789554
832980
886437
740352
641507
760005
779173
846184
839723
863601
881654
850915
426525
451641
461243
475096
490253
449926
507233
579363
629953
434344
369776
432422
437918
467803
454598
482412
498136
482636
977070 1029305 1094829 1057408 1203939 1172131 1092506 1374134 1953203 1083723
945932 1117242 1070297 1100326 1101506 1116648 1230714 1173423
Source: Statistics Canada Monthly Retail Trade Survey
HomeGoodsOnline.ca
< 39
HGO Merchandiser is published by
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