As a group, the seven manufacturers we interviewed for this year’s Sitting Pretty feature had good-to-great years. Considering that the northeastern part of the country was subjected to a winter that just wouldn’t end, that’s a pretty impressive accomplishment.

The key reason for that performance has to do with the variety of channels through which manufacturers can now sell their wares. The days of strict reliance on the specialty retail channel for sales growth are gone. Today, that channel may be flat year after year, but strong growth is still provided by interior furniture stores, or contract sales, or a returning designer business.

There’s strength in diversity, and patio manufacturers now have that luxury. It’s a pity the same can’t be said for their specialty retailers.

What follows are our annual summer chats with some of the top manufacturers.

Monterey Chair.

Through the years, Barlow Tyrie has regularly employed outside designers to give their line some snap. That’s no longer needed. There’s enough talented people (particularly Mark Tyrie) in the company right now to handle all design in-house.

Hearth & Home: How do your U.S. sales compare year-to-date with last year?

Charles Hessler: “We’re up comfortably. We’re not quite at double-digits, but it’s comfortable.”

Which regions of the country were strongest and which weakest?

Hessler: “Historically, our strongest market is the whole Northeast corridor right down to Florida. That’s always strong for us. But we had a bit of growth in the California market. We’ve had resurgence of some great contract business. That has been coming on quite strong, and our Chicago showroom has written a few orders that approach $100,000 in contract.

“So it’s looking good. However, we don’t blanket the country. Our product is somewhat localized to coastal areas, second homes, third homes, mountain homes. Our customers are looking for something that can stand up and last, such as teak and stainless.”

Are you close to being back where you were in 2008?

Hessler: “No, we’ve got a bit more to go. We had budgeted for an increase this year, but once April hit it just went absolutely nuts and we sold out of most of our popular woven goods and our stainless goods. We had shipments coming in that were sold before they loaded at the factory. All of a sudden we were quoting 10 weeks, 12 weeks out which is unheard of for us. That’s wasn’t on everything. We may have had the chairs, but we didn’t have the footstools – or something.”

A few years ago you mentioned a new purchasing program tailored to smaller purchases, those who couldn’t commit to $10,000 and up. Did that work for you?

Hessler: “Yes, it did, and it continues to work. We have a lot of little guys, small Mom and Pops, that don’t have much warehousing space. We came out with a program promoting new products because we wanted the new product to be on display. Often they have the same things on the floor for years at a time. So we wanted to make them sell that off and bring in something new and fresh; the program worked in that manner.”

Clearly, everyone lost a pile of designers and landscape architects over the past five or six years. Have you noticed that some are coming back? Are the ranks of the designers growing again and are you seeing more interest from them?

Hessler: “Yes. It’s funny you say this because, at the April High Point Market, I realized that quite a few of the designers coming to see us for the first time were young. There’s women who have been coming in for 24 years, and who go to every other market. They could walk in the door and say, ‘Hi Charles! How ya doin’ there? What’s new?’ I realized I wasn’t seeing all those faces anymore, but I was seeing a lot of younger faces.”

What can you tell us about your business in Canada? Good, bad or ugly?

Hessler: “It’s been good. It’s a very short season up there so you have to have a good delivery system. With the little problem that we had in delays in getting goods in here faster, we probably lost a little bit of business up there, but on both coasts it was good.”

How was your contract and hospitality business?

Hessler: “It’s coming back nicely now. It had been decimated along with everything else.”  

Tell us about your new products or collections.

Hessler: “Everything we showed went over well. Our Titan teak table, which we call rustic teak, has that barn wood or farmhouse kind of look about it, with a price tag of only $2,800. That went over very, very well. We had a couple of new chairs that are a very unusual design. One is a teak chair with what we call a synthetic rope for the seat back. Just about everybody who saw it and sat in it said, ‘Now that’s different.’

“For the first time we showed our big ceramic extending table, stainless steel with a ceramic top. It’s about  $8,000. We already have an $8,000 teak extending table. Keep in mind, if you’re going to be seating 14 people comfortably, I’m sure you’ve got the money.”  

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Belle Isle Loveseat.

Telescope Casual has enjoyed strong growth over most of the downturn. This is a family business that’s constantly improving its products and performance. Now it’s embarking on a multi-year plan to become a lean manufacturer.

Hearth & Home: How do your U.S. sales compare year-to-date with last year?

Henry Vanderminden: “We’re up double-digits. This is the fifth year that we’ve seen a nice increase every month. Other than the tail end of 2008 and 2009, we’ve had nice growth for our mature company.

“However, we’re seeing single-digit growth in our retail sector, which is the biggest part of our business. Our double-digit growth is in contract, designers and other types of businesses besides the brick and mortar specialty retailer.”

Did you notice any regions in the country that were much stronger than others?

Vanderminden: “Florida was very strong for us. Southern California was very strong, and the Northeast is very strong, but it was very late in breaking. Even areas in the Midwest did quite well.”

How well or poorly did you do with early-buys for 2014? Is early-buy back for you, in other words?

Vanderminden: “We never lost early-buy. Our early-buy provides a lot of benefit to our dealers; they find a lot of value in our dating and our early-buy discount. Many of them use it to stock up. Others use it to stock up and set the floor for new products.”  

What percent of your business do early-buys represent?

Vanderminden: “It’s substantial, anywhere from 33 percent in a southern territory with a greater special order business, to 50 percent for other retailers.”

How did your business in Canada fare this year?

Vanderminden: “We’re very proud of our Canadian business; it has always been important to us. Certainly the Canadian exchange rate has been very favorable for buying American goods, and that does have an affect on our business; we’re growing each year because of that. Our business is actually quite strong in Canada. We have a good dealer base. It’s mostly all retail, while in the U.S. and other areas we have much stronger designer residential and commercial business.”  

How is your interior furniture store business doing?  

Vanderminden: “Telescope has older customers that are interior furniture stores. They’ve been customers of ours for 40 or 50 years, maybe longer, 60 years. But there is certainly a resurgence. The hottest category in furniture is outdoor, so interior furniture retailers are looking for outdoor furniture brands to retail. We’ve seen some nice success through exhibiting at High Point twice a year in October and April. Our rep force is finding more and more interior furniture stores that are getting into the category.”

Do you feel that more designers are coming back after a tough time through the downturn?  

Vanderminden: “I do, primarily because our line is much more friendly to a designer’s ability to get the product quickly. Our products are made in America and we have a ton of variety. Our line is much more conducive to working with designers today than it was 10 years ago.”

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Barcelona Lounge Chair.

Like many other manufacturers, Summer Classics was hurt dramatically by the Great Recession. Since then, it has come back with a roar, posting very strong gains year after year – in all areas except specialty retail.

Hearth & Home: How do your U.S. sales compare, year-to-date, with last year?

Bew White: “Business for all combined companies is up double-digits, but the patio retail store portion is down slightly, primarily due to the weather in the first quarter.”

Which regions of the country were strongest, and which weakest?

White: “Florida is making a considerable comeback, and we’ve seen a lot of business growth in the Southeast; also, Canada has been good. The weakest areas continue to be California, the New York metropolitan area and New England.”

How well or how poorly did you do with early-buys for 2014?

White: “Early-buy continues to be a struggle. The customers want to buy fewer products upfront and have us ship more product in-season. However, this is a difficult scenario for both parties as we inventory more and more product in season, taking the risk off the dealer, but the dealer doesn’t have much backup for his clients. So Summer Classics has to decide upfront what their clients are going to buy in-season. Given our 50,000 SKUs, I don’t have to tell you how difficult that can be.

“If early-buys are down 50 percent from 2007 then the dealer must make up that volume in-season in order to do the same amount of volume. At some point the dealer will realize that he cannot make up the volume he was doing without having some inventory in-season to supplement his special orders – or it may be too late for him as his volume drops.

“Most of the dealers have chosen to keep inventory in low-priced (container) merchandise, therefore decreasing their average ticket prices which results in a lower gross profit at the end of the year.

“One example of this would be if you’re selling Tempur-pedic mattresses for over $3,000 and you put a no-name mattress on your floor for $599 that steals sales from your Tempur-pedic $3,000 mattress. It doesn’t take long to have your gross profits destroyed by the no-name, lower-cost mattress that you only made $300 gross profit on compared to the $1,500 you made on the Tempur-pedic.

“You will need to sell five times more mattresses to make the same amount of $$. The math just doesn’t work.

“Unfortunately this is what our industry is doing right now. We call it the Great Race to the Bottom. That’s what the destruction of branding is doing to our businesses and to the retailers.”

What percent of your business do early-buys represent?

White: “At one point (2007) early-buys represented 25 percent of our volume. Now they represent less than 10 percent of the volume. I don’t see this as healthy for the dealer or us.”

What percent of your business are custom orders? How much of that is from designers?

White: “Custom orders represent approximately 70 percent of order activity. Oddly enough, designers are only a small portion of that. Some of it may be the volume at the Summer Classics retail store level. If we had included our Contract division, most of that comes from designers and would have skewed the design portion of the volume up substantially. For the purposes of this discussion I did not include our Contract division in this answer.”

How many specialty dealers do you have in the U.S.?

White: “We have about 365, not including Gabby (interior furnishings), Parker James (Private Label) or Contract.”

How is your Canadian business doing?

White: “Our Canadian business has been very strong; we had substantial growth in that area. Since the U.S. dollar became equal to the Canadian dollar in value, it has made a huge difference in our ability to sell there.”

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St. Charles Chair.

Like many others, OW Lee found that strong growth has, perhaps, as much to do with internal efficiencies as with external factors. The company is up a striking 25 percent.

Hearth & Home: How do your sales this year compare year-to-date with last year’s?

Terri Lee Rogers: “We are actually ahead 25 percent. That’s quite a large amount for us.”

To what do you attribute such an increase? What has changed?

Rogers: “I’ve thought about that and I think the main thing is that we had a better handle on our inventory, we were shipping more consistently and we didn’t have back-orders. I think that has a lot to do with it.”

So it’s more internal than external?

Rogers: “It’s a combination of both. Externally, the sales are up and we hear that people are selling-through the product. But I do think that people had more confidence in us as a reliable supplier. We were shipping when we said we were going to ship. Which sometimes gets hard if you get more orders than you can handle; it’s hard to stay on top of it.”

Those pesky dealers somehow don’t order early enough, do they? (Laughs). Am I correct that fire tables are probably still your number one product?

Rogers: “Yes, and that’s been the case for at least five years.”

Now, almost all your competitors have fire pits. Not that many have fire tables. You had the market all to yourself for a number of years, didn’t you?

Rogers: “Yes, we did. I guess we were lucky enough to be the pioneers and figured out what works and what doesn’t work. It seems like the business continues to increase, even though there is all the competition out there.”

I remember that Bob Gaylord got into fire pits real early, probably a little over 10 years ago. And he always said, even back then, “This will never take off until a lot of other people get into it.” It takes many people to get the word out and then all of a sudden friends and relatives see it and the thing starts to snowball.

Rogers: “Yes. It’s still doing very well for us, and represents about 22 percent of our total sales.”

Which regions of the country were your strongest for, not only fire tables, but your entire line? Were there some that really stood out?

Rogers: “Well, Texas and Oklahoma. Those are the two superstar states for us.”

How well or poorly did you do with early-buys for 2014?

Rogers: “We were 22 percent ahead of last year’s early-buys. We really worked hard. We put on some second shifts and had some additional help in the customer service department to just try to stay on top of it and be responsive.”

What percent of your business do early-buys represent?

Rogers: “Probably 35 percent.”

That’s a very healthy number. That’s great.

Rogers: “Yes, because we do have a very strong special order side of our business as well.”

What percent of your business are special orders?

Rogers: “About 60 percent and then probably five percent in there is contract. Contract is where we need to grow our business.”

How many specialty dealers do you have?

Rogers: “We have 371 in the U.S. and Canada.”

What happened in Canada this year?

Rogers: “Business was a little flat for us. We had some good growth in Canada a few years back, and since then it’s just been a little flat. We continue to do business with the people we do business with, but I haven’t seen growth by leaps and bounds in Canada over the past couple of years.”

Do you have any idea how many dealers you have up there?

Rogers: “Probably 30.”

Do you sell any catalog companies?

Rogers: “Yes, we do catalogs. We work with Frontgate and we’ve worked in the past with some other catalogs. We had a couple come in at Premarket that are pretty interested.”

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Jefferson Chair.

Bob Gaylord, president of Agio International, has a broad view of the patio furniture industry; his company sells through multiple channels, from specialty to mass. His take on the season is always of interest.   

Hearth & Home: Let me begin as I usually do, which is to ask how this year compares to last year and if you could break that down by channel.

Bob Gaylord: “I’ll start with the mass channel. They had another very mediocre year; I’ll put the home center channel in there too. There was very little, if any, growth. There was probably a lot of carry-over from the year before, so I think they did a lot of cleaning up.”

The weather in the first quarter must have had a lot to do with that.

Gaylord: “No doubt about it, but I don’t think that’s the biggest factor. I think it’s the lack of housing starts, lack of home sales, lack of lower-income people – the bottom pyramid – getting into the mix.

“Catalog.com – from all signs that I have their business increased. Their benchmark, of course, is much lower than others that have been around for a long time, but they just continue to grow because .com is getting more of the business all of the time.

“The wholesale club business seemed to come out all right, depending on what part of the country. It was an extremely rough weather season, especially for the eastern half of the United States. I think people fared better out in the Midwest regardless of what the weather was, only because I think everything has stabilized a little bit more there. The East Coast took the biggest hit, just because of the weather. How about the fact that nobody bought anything for the first 120 days?

“The next category is indoor (furniture stores). They had to put up with the same situations everybody else did. The difference is that, for the guys who are new in the business, every sale they get is an added sale they wouldn’t have had if they weren’t in the category. So they are not so quick to say, ‘Hey, this is a bad year’ or anything like that.

“One of the things I’ve been trying to emphasize to the indoor guys since the beginning of our efforts is this is investment spending. This is paying your dues. This is a five-year marathon, not a sprint. Quite frankly, you don’t deserve any business until you’ve paid your dues. For the most part, I think they keep that in perspective.

“Our most successful guys have just been in the business for a few years. Would they have liked a better year; would they like to see the economy improve, the housing market improve and obviously the weather be better? Of course, but they are big boys. They’ve been around the block and, again, it’s all added sales.

“Last on my list is the specialty stores and it’s kind of the same old thing for us. Our guys pretty much sell everything they can get their hands on. That doesn’t mean that we have the greatest stuff in the whole world. What it means is that these owners try to buy conservatively and they don’t have any problems selling out.

“Of course, we get the calls in May that say, ‘Hey, if I put in an order when can I get it?’ Our answer is, ‘Well, about the end of August; how does that sound to you?’ We do have programs where we say to these guys, ‘When you put in your orders, put in an extra order for May shipment. If you find that things aren’t moving and you want to cancel, go ahead and cancel.’ Of course, everybody came up short on fire pits; nobody can get enough fire pits.”

That’s still the hottest product around, isn’t it?

Gaylord: “Oh yeah, and growing, growing. I honestly think that fire pits by themselves, within a very short number of years, could be the number one category in our industry. I don’t count the cheap $149 sets being sold at mass as being a real part of our business.”

You recently signed up for a 22,000 sq. ft. showroom in Las Vegas. What made you want to go there? Do you think Chicago’s not quite enough, or that you’ll be reaching a different group of buyers?

Gaylord: “Well, first of all the indoor furniture retailers are obviously extremely important to us and to our industry for the future. But what put me over the top, because we’re already in High Point, was the fact that I personally have seen a lot of evidence that made me feel the Merchandise Mart possibly was not going to be our home in the future, either by their desire or by our organization’s desire.  

“Also, the people who run Vegas are making their pitch to individual members of the association (ICFA) to get them to come on out because, if it happens, Vegas believes that they have a deal nobody else can make, which is prime showroom space, all together, in a wonderful venue.

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Nova Sofa.

Lloyd Flanders is coming off its best year in the past five or six years and the company’s internal performance had much to do with it.

Hearth & Home: How well did you do year-to-date in 2014?

Dudley Flanders: “We were up double-digits and very pleased with the increase.”

Where did the growth come from in terms of your product lines?

Flanders: “We had, I believe, 12 product lines that were up. Which tells us it was across the board. It was loom; it was vinyl; it was some of the Loft product. Container products were up.

“That was one of the things we stressed to our reps, that this was not because we had one hot line. This was because people seemed to be noting the quality improvements we’ve made and the delivery improvements we’ve made and they were pushing Lloyd Flanders as a brand.

“It was that and our performance this year was very good. That makes a huge difference for both of us. Retailers can’t sell what they can’t get, and we don’t make any money on stuff we don’t ship.”

You mentioned the Loft collection, which was an interesting and well-done effort to create products that would appeal to the younger generations. What happened with that collection?

Flanders: “I think the concept was never quite understood, but some of the products, if they were displayed properly, retailed fairly well. So this year we eliminated the Loft concept. We’re not supposed to use that name anymore. It’s just part of our product line. The retailers who understand how to display more contemporary, hip product do well with it.

“Our new loom collection, Nova, certainly has a contemporary look. I think that’s why we’re eliminating the Loft idea. We want to just say, ‘Hey, we’re covering a broad spectrum of design. We’re not just your grandmother’s wicker anymore.’ We go from your grandmother’s wicker to cutting-edge contemporary.”

How did your container program, Lifestyles, fare?

Flanders: “That was up substantially as well. There again I think we performed; we’re learning how to do that business better than when we first started. We strongly encouraged the dealers to get with that program early so we could make sure we’re able to get their first product out before Chinese New Year.

“I think the retailers are learning a little more about how to ensure the success of that type of program – by ordering early, I mean.”

Which regions of the country did you find to be the strongest this season?

Flanders: “Here again, more than half of our territories exceeded their quotas and that went from California to New England to Florida to the Southeast. It wasn’t regionally specific.”

It sounds as if this has been one of the best years you’ve had in perhaps five or six.

Flanders: “Oh, I think that’s easily said. But also I think it was one of our best performance years in five or six. We made substantial improvements in our tailoring and our soft goods, and we were seeing the effect of that at retail. If it looks better and sits better they are more likely to buy it.”

And the salesperson is more likely to push it.

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Calais Lux Club Chair.

Like many others, Ebel is learning that running an efficient cut-and-sew operation is not a simple task – particularly if you’re posting increases of 30 or 40 percent.

Hearth & Home: How do your U.S. sales compare year-to-date with last year?

Mark Bottemiller: “I’m up about 30 percent, and part of the reason we’re not higher is that our lead time slid out a bit on us; that had an impact.”

Which regions of the country did you find the strongest or weakest?

Bottemiller: “We’ve had some pretty significant increases all along the eastern seaboard from Florida all the way up to New England, as well as some pretty good increases in the south central portion of the United States, the heartland area of Texas, Oklahoma and Colorado. The weakest point is probably the central and upper Midwest. California is still struggling a bit for us.”

How did you do with your early-buys for 2014?

Bottemiller: “They were commensurate to our annual increase as a percentage. Early-buys are still a smaller percentage of our business than perhaps what’s normal in the industry, but they are indicative of the growth in terms of percentages, which is 30.”

What percent of your business do custom orders represent, and how much of that is really from professional designers?

Bottemiller: “It’s close to 50 percent, and most of that business does come from specialty retail, not from the design community. But we have seen a very nice increase in our designer business in the last 24 months.”

Last year you said you had about 250 specialty dealers in the U.S. Has that changed?

Bottemiller: “Yes, we added about 25 more retailers.”

How is your Canadian business doing?

Bottemiller: “It’s very, very strong. One of the best increases that we saw this season came out of Canada; our neighbors to the north contributed above-average increases.”

Our understanding is that the Outdoor Room trend, which people two or three years ago said would never hit Canada, certainly has, and they are spending far more money than they did four or five years ago on outdoor living.

Bottemiller: “Absolutely. No question. It’s a different design aesthetic, which is kind of fun because the best sellers in the United States are not always the best sellers in Canada, which has given us the ability to look at some things from a design perspective a little differently perhaps.”

What percent of North American specialty dealers would you say are not credit-worthy right now?

Bottemiller: “It’s getting better. Realistically, it’s in the 15 percent range.”

More than one industry executive has told me that what retailers have to do is recognize that the Internet is here to stay and they should embrace it or fail. They should try to get their slice of the pie that way and have a presence there, and if somebody from out of their territory wants to buy from them, they should be set up to get it done.

Bottemiller: “I tend to agree with that. When you look at the amount of business that Wayfair is doing, the local retailer has to figure out how to compete with that. We are going to implement for Internet sales a minimum retail price. We are actually going to say, ‘You can’t sell at less than this.’ It’s policies such as this, and other things, that are going to help our retailers compete, not only with each other, but with external non-specialty forces. We’re going to have to work together to figure it out.”

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Bainbridge Chair.

As he will tell you, Tom Murray is running a rapidly growing, complicated business. When he’s in doubt about a path to take, he refers back to the company’s mantra – style, comfort, value.

Hearth & Home: Tell me how well did you do this year? How much did you go up?

Tom Murray: “It depends on the channel. The core customer base, which would be my specialty retailers and garden centers, was up about 20 percent on average. The larger entities that we had grown the most with over the last few years, which is the indoor furniture stores, were off in many cases by about the same. So our total net growth would be in the single digits, but it looks like we’re back to a nice double-digit growth for 2015.

“In the first quarter, the larger entities panicked. The CEO’s sitting in their towers just had to cut purchase orders and reduce projections. When I went to the show it was like talking to (people in) different countries (Laughs). The good news is that this was the first show where I could see more universal success from the core customer base that had struggled the most for the last five years.”

At least single-digit growth gave you a little break. You didn’t need another 30, 40 percent growth.

Murray: “Right. We saw that it would be nice to have a year where we could fix something. We had several priorities – efficiency and productivity, better inventory management, better accounts receivable management and better customer service. Improvement in cushion manufacturing really smoothed out a lot of delivery problems. So we accomplished some heavy lifting from a service standpoint.”

In terms of your infrastructure, I assume you still have five warehouses and a couple of cushion operations, and much larger headquarters?

Murray: “Correct. We’ve expanded the manufacturing here quite a bit. Now there are plans to expand our operation in Florida at the end of this year. We have extended our lease and right around Christmas time this year we’ll be into something more significant. We’ll probably increase our operation in Florida by 50 percent going into 2015. It will be somewhere between Tampa and Ft. Myers.”

Last we spoke, you were going to concentrate on trying hard to get early-buy orders in. They had come in very late the prior year. How well did you do?

Murray: “We did better than the previous year. The volume was higher than expected for the early-buy portion, which is our core base. That’s not the big guys. Every manufacturer wants to fill their production schedule in the off-season, which we’re still in right now. So there is a big push for that, but we maxed out what we thought we would need for early-buy last year and I would expect that will happen again this year. That did help shipping a lot. It smoothed things out for a lot of deliveries.”

What percent of your business will early-buy be this year?

Murray: “Still not a huge number. Fifteen percent would be on the low end; 20 percent would be on the high end, most likely.”

What percent of your business are special orders? Last year I asked that same question and you wanted me to define it to say whether I mean frame/ cushion, either/or and I said basically either/or. Does that help?”

Murray: “That is probably one of our biggest growth areas in the middle of the year – 33 percent. That’s our niche. Now some of that might be a little bit of reaction to the market. So I’d say my goal over time would be to see that creep up to 40. That’s why we have the warehouses.”

That’s a lucrative part of your business, right?

Murray: “That’s the best part. It’s the hardest to execute so it’s the hardest for other people to compete to get into this world. But over time that’s where we are really helping our dealer base by reducing their inventory carrying costs. So they take lower inventory risks.”

How is your Canadian business doing?

Murray: “It has been expanding nicely. We’ve got a nice customer base. I saw a number of them at the Premarket. We had some products that we designed thinking of Canada and the Toronto market, the Vancouver market. Some of those tastes are similar to the Miami market and parts of our southern California market. We went a little outside our comfort zone and I noticed that pretty much all the metro area Canadian customers gravitated to it.

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