Spotlight on Upholstery

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1 SPECIAL SUPPLEMENT TO FURNITURE TODAY APRIL 8, 2013 CONSUMER VIEWS Spotlight on Upholstery PRESENTATION SPONSORED BY

2 2 FURNITURE TODAY APRIL 8, 2013 Stain-resistant fabric is top priority for buyers Americans plan to be messy this year as stainresistant fabrics are a must-have for consumers buying stationary sofas in That s part of the exclusive results from nearly 3,500 consumers answering a recent Furniture/Today and HGTV survey. More than six out of 10 say performance fabric is very important when shopping for new product and another 29% say it s important. Nearly one-third of consumers currently own a sofa with performance fabrics, according to data from Furniture/Today and FurnitureDealer.net. More than 2,000 people provided their thoughts on fabric last November as part of a survey posted to the American Home Furnishings Alliance s website, catalog.findyourfurniture.com. In 2012, 6.2% of all U.S. households purchased a stationary sofa, spending a combined $12.7 billion. In 2012, consumers spent $12.7 billion at retail on stationary sofas. Last year s retail sales increased 5.3% from 2011 s total of $12.1 billion. Another 7.5% of U.S. households have placed a stationary sofa on their 2013 buying plans, making it one of the most sought-after furniture products this year. Redecorating is the number one driver for buying a new stationary sofa, per the Furniture/Today and HGTV survey. Nearly half of this year s shoppers plan to purchase a new sofa to go with updated décor. Worn out sofas, named by four out of 10 consumers, is the second-most popular reason for buying. Another 29% say their current sofa no longer fits their taste and 21% are buying because the old sofa is not comfortable. Overall, about eight out of 10 consumers will first shop a furniture store for sofas. That figure breaks out to 53% first shopping a traditional furniture store, 18% a manufacturer-branded store and 7% a lifestyle furniture store. Online retailers are the first place a full 13% of consumers shop for stationary sofas. Stationary sofas Nationally, the percent of households that 7.5% 6.2% Bought in 2012 Plan to buy in 2013 Source: Furniture/Today 2013 Consumer Buying Trends Survey and Furniture/Today market research 92% of stationary sofa buyers want stain-resistant fabric. First place consumers shop for stationary sofas Traditional furniture stores 53% Manufacturer-branded stores 18% Online retailers 13% Lifestyle furniture stores 7% Department stores 5% Other channels 4% Why consumers plan to buy Are redecorating 47% Old sofa is worn out 40% Old sofa no longer fits my taste 29% Old sofa is no longer comfortable 21% Have a new home 18% Old sofa is stained/dirty 14% Need additional pieces to go with what I have 14% Don t have a sofa for this room 7% 32% of consumers have bought performance fabrics for indoor sofas. ABOUT THE DATA Furniture/Today and HGTV s Consumer Views Survey received responses from 3,465 U.S. consumers. The survey fielded as part of HGTV s Inspiration weekly e-newsletter. Because of the large sample size, the survey data can be projected, within this population, with a margin of error of plus or minus 1.7%. The sponsor of this presentation, Klaussner Furniture, had no involvement in collecting, analyzing or reporting the data. The research was collected and analyzed by Furniture/Today s research department. RESPONDENT PROFILE Region Northeast 19% Midwest 22% South 39% West 20% Age Under 35 8% % % % 65 and over 13% Household income Under $30,000 10% $30,000 to $49,999 20% $50,000 to $74,999 24% $75,000 to $99,999 20% $100,000 to $149,999 17% $150,000 or more 9% Source: Furniture/Today and FurnitureDealer.net Consumer Survey, November 2012

3 4 FURNITURE TODAY APRIL 8, 2013 Consumers willing to pay more for custom pieces One-third of overall consumers have purchased some type of custom-made furniture and three-fourths of that group has ordered custom upholstery. Custom upholstery is worth more money, according to those answering Furniture/Today s exclusive survey. Nearly six out of 10 buyers are willing to spend $500 or more on a custom-made sofa or chair. Another 22% would spend between $200 and $499 more for a custom piece. On average, shoppers think about five weeks is a reasonable length of time to wait between order and delivery of custom upholstery. The maximum length they re willing to wait is around seven weeks. Demographically, custom buyers tend to be over age 45, married and live in a house. Specifically by age, one-third of those that bought custom upholstery are between ages 45 and 54; 41% are between 55 and 64; and 16% are ages 65 or older. Income breakdowns of custom buyers skew slightly to higher levels. About one-fifth have incomes under $50,000; 37% between $50,000 and $99,999; 26% between $100,000 and $149,999; and 16% have incomes of $150,000 or more. Upholstery accounts for 76% of all custom furniture orders. How much more buyers are willing to spend on custom Percent who bought custom upholstery $500 or more 59% Nothing 8% Less than $100 4% $100 to $199 7% 12% 10% $200 to $299 $300 to $499 Time consumers will wait between order and delivery Reasonable length Maximum length Average 4.8 weeks 6.7 weeks One week 7% 2% Two weeks 16% 8% Three weeks 11% 7% Four weeks 26% 18% Five to six weeks 23% 26% Seven to nine weeks 11% 21% 10 weeks or more 6% 18% THE CUSTOM UPHOLSTERY CONSUMER Nine out of 10 custom Household income buyers are 45-plus levels of buyers vary Percent who bought custom upholstery Under 35 3% % % % 65 and over 16% Under $30,000 2% $30,000 to $49,999 19% $50,000 to $74,999 19% $75,000 to $99,999 18% $100,000 to $149,999 26% $150,000 or more 16% 7 out of 10 are married. 9 out of 10 live in a house. 9 out of 10 own or are buying their home. What is your opinion of bonded leather? percent of consumers No opinion 45% Positive 13% Negative 42% Four out of 10 feel negatively about bonded leather ONLY 13% OF CONSUMERS ANSWERING THE exclusive survey have a positive feeling about bonded-leather upholstery. Another 42% have negative feelings and 45% have no opinion at all. While those on Team Bonded are small in number, they have specific reasons as to why they believe. A 23-year-old from Michigan explains it this way, My opinion is that bonded leather is a costeffective alternative to genuine leather. According to a 40-year-old from Florida, faux leather is just as lovely as real leather. Real leather is no longer worth the price. A 38-year-old from North Carolina believes they re easy to upkeep. And, a 42-year-old from Pennsylvania believes they re stain resistant and durable. A 30-year-old from the District of Columbia has no opinion, as long as it looks good and feels good and withstands children. A current owner from Texas thinks her bonded leather sofa is pretty and durable, but is missing the leather smell. And, a 36-year-old from Maryland would be fine with one if it looked nice and went with the décor. On the negative side, consumers have issues with bonded leather s durability, softness and comfort. According to a 25-year-old from California, I do not like them. They get sticky in the summer and are just not comfortable. A 54-year-old from Illinois has seen bonded leather rip easily. Per a 49-year-old from Oregon, They look beautiful at first and are usually comfortable, but the pieces that family and friends have purchased seem to have worn out sooner than leather pieces. Once they start to wear they look terrible.

4 6 FURNITURE TODAY APRIL 8, 2013 Motion sofas continue to gain in popularity $3.9 billion that s the dollar amount U.S. consumers spent on motion sofas in The category s overall sales increased 6.0% last year, from 2011 sales of $3.6 million. That explosive growth made motion sofas one of the fastest growing products last year. More than three million U.S. households, 2.8%, bought a motion sofa in 2012 and another 4.9 million, 4.3%, have plans to buy one in Last year, households spent a median of $749 on a motion sofa covered in fabric and a median of $899 on a leather one. Motion sofas are one of the hottest products on furniture sales floors, gaining three percentage points of market sales share over two years. Furniture/Today s Furniture Store Performance Report reveals that in In 2012, consumers spent $3.9 billion at retail on motion sofas. 2010, motion sofas comprised 6% of sales and in 2012, it accounted for 9%. Fabric motion sofas best sell for a median of $899 on furniture store floors and leather ones best sell for a median of $1,399. Six out of 10 consumers answering Furniture/Today and HGTV s exclusive survey will first shop a traditional furniture store for a motion sofa, such as Rooms To Go, Haverty s or another locally-owned store, and another 14% will first head to a manufacturer-branded furniture store, such as Ashley or La-Z- Boy. Per the data, 12% will first shop online retailers for a motion sofa. Nearly seven out of 10 buyers prefer a motion sofa that s covered in fabric, while 56% prefer one that s solid in color and 41% like motion sofas that are dark in color. Eco-friendly materials are important to 47% of consumers. Motion sofas Nationally, the percent of households that 2.8% Bought in % Plan to buy in 2013 Source: Furniture/Today 2013 Consumer Buying Trends Survey and Furniture/Today market research First place consumers shop for motion sofas Traditional furniture stores 60% Manufacturer-branded stores 14% Online retailers 12% Other channels 6% Lifestyle furniture stores 5% Department stores 3% Consumers prefer to recline Terms Department stores are full-line operations carrying a variety of merchandise, including national and regional stores. Examples include Macy s, Bloomingdale s and JCPenney. Lifestyle furniture stores include retailers that carry furniture, bedding, home accents and soft goods at full price. They may or may not carry housewares, small appliances, gourmet foods, apparel, jewelry and personal care. Examples include Ikea, Pottery Barn, Crate & Barrel and Restoration Hardware. Consumers reclining manually prefer Manually 74% Handle/lever 79% Push back with weight 21% Remote Consumers reclining with power prefer With power 26% control 42% Button 58% Manufacturer-branded stores include retailers where furniture and/or bedding is the total business or single-largest category and all product or the majority of product comes from one manufacturer. Local ownership may vary. Examples include Ashley Furniture HomeStores, Bassett Furniture and Ethan Allen. Online retailers include online sites whose primary distribution is through the Internet. Retailers include Hayneedle, Amazon and Wayfair, and new product through ebay. Source: Furniture/Today and Furnituredealer.net Consumer Survey, motion sofa buyers favor: Solid-colored sofas over ones with a pattern or design (56% versus 19%). Fabric-covered sofas over leather ones (68% versus 48%). Dark-colored ones over light-colored ones (41% versus 24%). 58% of 2013 motion buyers prefer to select their own fabric. 47% believe eco-friendly materials are important. 35% of motion buyers want to be able to take product home the day of purchase. Other channels varies by product and includes designers, warehouse clubs, catalogs, home shopping networks, discount department stores, second-hand outlets, home improvement centers, off-price retailers, rent-to-own stores and home accent stores, among others. Traditional furniture stores include local, regional and national stores where furniture is the total business or the single-largest category. Examples include Rooms To Go, Nebraska Furniture Mart, R.C. Willey, Star Furniture, Raymour & Flanigan and Haverty s, as well as local independent stores.

5 Klaussner Solutions Portfolio, 50 Years in the Making. Domestic Upholstery Domestic Motion Imported Upholstery Case Goods An ever-expanding product line and industry-best distribution and delivery make Klaussner your single-source solution for healthier profits. Consumers demand choices, and Klaussner Home Furnishings delivers. With a full line of upholstery (domestic and imported, fabrics and leathers), case goods, motion furniture, even memory foam mattresses, Klaussner offers virtual one-stop shopping for everything on your showroom floor. Add to that a warehouse, distribution and delivery system that allows you to keep inventories low while keeping customer satisfaction high, and you ve got the number one solutions provider in the home furnishings industry. The leading solutions provider for the home furnishings industry. Showroom: Klaussner on Hamilton N. Hamilton St Join us April 18th- April 25th in High Point

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