Ameriwood eyes new distribution
By Furniture Today Staff -- Furniture Today, January 27, 2003
Wright City, Mo. — Ameriwood Inds., the ready-to-assemble furniture division of Montreal-based Dorel, is readying stepup merchandise as it looks to jump-start sales and regain momentum.
The company emerged last year as the No. 2 player among RTA producers, but has faced some difficulties recently, with accounts such as Ames closing and others not generating expected sales, said Jeff Sternklar, director of marketing.
"We're working feverishly on new designs, and we are looking at new channels of distribution," he said.
At the October market, Ameriwood stepped up with more product at the $199 retail price point, vs. its traditional promotional high of $149. Sternklar said April introductions will move even farther up the price ladder.
As for new categories, he said Ameriwood likely will try a closet-organization system, which wouldn't represent a difficult transition.
"We consider ourselves board surgeons," Sternklar said. "What we cut doesn't matter. We can cut anything as long as it's made out of particleboard. There's a whole realm of things that we're looking at."
Ameriwood is not alone in its effort to buttress sales with new product categories, price points and other wrinkles. Storage seems one of the first things companies want to try, as several recently have introduced systems for the closet, kitchen, garage and elsewhere.
Driving these changes is the double whammy of slow retail sell-through and a dwindling accounts base. And with Kmart planning to close another 326 stores in 44 states, the business climate doesn't appear to be getting any better for flat-pack furniture makers.
Some of those difficulties were reflected in Dorel/Ameriwood's RTA sales in its third quarter ended Sept. 30, 2002, which were down 10% to $62 million. For the first nine months, sales were down less than 1% to $196 million. Dorel projects that its RTA sales for the full year will be in the $260 million to $270 million range, which would represent an increase from last year's $244.1 million.
