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Retailernow September 2018


Making Waves

Sept2018 ProdFocus-web

September 2018—

A Leading Casual Specialty Retailer Creates a One-Stop Resource for Other Retailers

While there have been plenty of stories about retailers developing their own private-label lines over the years across all consumer categories, it’s more of a rarity to hear of a merchant in the home furnishings business taking the next step, actually selling the product they develop to other home furnishings retailers.

Leaders Maui

Leader’s Maui dining and seating collection, crafted with its trademarked PoliSoul timber that will stand up to the elements, breaks down the ”iron curtain” aka French doors bridging the chasm between indoor and outdoor.

But that’s just what Leader’s Casual Furniture, a highly successful, 19-store, family-owned chain with 47 years of experience in the Florida marketplace has done with Watermark Living, a casual furniture resource created by retailers for retailers. “We don’t want to expand our retail chain beyond Florida,” relates Tim Newton, managing director of Leader’s Holding Co. “Within Florida we have our network, and we have a lot of infrastructure and our goal is to have a great place to work with great product and a great experience for the people who buy from us. We have no need to take over the world.”

The Leader’s chain, which counts among its honors industry awards with titles like “Best Casual Furniture Retailer in North America,” was long known by consumers in the West Florida market as a specialist in rattan and wicker furniture, and by industry insiders as a retailer well ahead of the game in its early adoption and application of technology.

“That probably started with my father, Jerry Newton, who didn’t mean to get into furniture,” Tim Newton says. “He came from the banking industry at a time when computers were just becoming a part of the norm. We’re talking about punch cards and huge machines that were bigger than anyone can fathom now, that didn’t do 1/100th of what our smart phones can handle. But he was always involved in the technology side and I think saw how it impacted the banking industry in a positive way. So, he applied that to Leader’s when he came on board, and then moved into more of a management role, and then ownership. I think the first computer they bought to do the accounting was one of the first available to consumers from IBM.”

Tim and Ashley Newton

Tim and Ashley Newton run Leader’s Casual Furniture, a 19-store chain his parents took over in the 70s. Today Leader’s is known throughout the industry as an award-winning retailer.

From the beginning, Jerry Newton sought to run the business on what he referred to as full trucks. “That’s a little different in the casual specialty business where stores tend to try to run on higher margins and lower volume,” the executive says. “We were always structured to have a lean supply chain, all the way back to our original owner who was a very innovative guy.”

Tim Newton joined the operation in 2001. “I was on my fifth year of a double major in engineering and business management and I wanted to take a little time off,” he remembers. “I asked the Leader’s sales manager at the time if he had anything for me. I just wanted to see what it was about. It turned out I really enjoyed it and made good money working in our retail showrooms helping people create spaces.”

Of course, as the owners of most independent furniture retailers running family businesses will surmise, Tim Newton never did finish the double major—choosing the life of a merchant and the family business instead. Eventually, he married Ashley, who was originally hired to work with his Mom on the purchasing and buying side of the business. That’s where the story really begins to get good.

The Import of Import

Back in the early 80s, Leader’s Casual specialized in importing rattan furniture. “We could not get the quality that our customers expected from us and that’s when the founders of Leader’s decided to open their own plant in the Philippines. That’s actually what gave my Mom and Dad the opportunity to get into ownership,” the executive says. “The founders ended up staying in the Philippines and selling off the American side.”

“What’s important to point out here is that as retailers we got into importing and developing our own products, not because we thought we were the most amazing designers, or because we thought we could do it better than anybody else, but because we were really searching for things that we could not find in our domestic supply chain,” reports Ashley Newton, who today directs marketing for the retail chain. “And we were doing it for ourselves, as we sought to offer an option-rich, but simplified environment for our customers, with products that were easy to explain, easy to understand, easy to own and great looking, often for a price point that was missing in the marketplace. As retailers, we found you could get an import program from someone that had lower-grade materials and a really great price point, or full custom domestic manufacturing. There really was nothing in the middle.”

Funny thing about Florida: More often than not, it’s where big industry conferences are held and there was always some kind of retail store tour associated with the events. “Over the years, long before the onset of the internet, other retailers would come to Florida for conferences and they would come to Leader’s,” she recounts. “They would say, ‘What’s this? Where did you get this from? I want to sell something for this price. I want this quality.’ And we said ‘no’ for a long time, but eventually we started selling to friends in the industry.” A wholesale business was born.

A few key things happened along the way. First, the rattan business changed…a lot. “Rattan has experienced a neat journey over the years,” Tim says. “In the late 70s, you could export the raw material from the countries where it grew and manufacture the product in the U.S. Then those countries changed their laws so they could increase their GDP and they no longer exported raw materials, choosing instead to make the products overseas. In those days, rattan was a low-cost alternative to a promotionally priced sofa, which retailed then for $399 (and still does in some cases). As the raw material got more expensive, it became less popular, really losing favor as consumers’ tastes began to lean toward more modern, clean-lined styles of furniture. But rattan is coming back as a trend, as a design element at the better end with accents like a $700, $800 or $900 club chair that marries with an upholstered sofa.”

Leader’s still offers rattan all these years later, but these days, most of the raw material comes from plantation-grown resources focused on longer life-cycle wood products like teak. Newton says that with less demand, the quality of the raw material has improved. There’s also more of a green story attached to what are today largely handcrafted products made by artisans.

High Watermark

As any student of the game is aware, the casual furniture business has experienced seismic changes over the years and Leader’s grew organically along with the industry, eventually moving into a 120,000-square-foot state-of-the-art distribution center in Largo, Fla. that feeds its stores (and others). “People buy inferior products because they want it now,” Tim Newton posits. “So, we have structured our entire organization to be able to quickly offer special-order and quality products that last while enabling customers to get what they really want.”

On the manufacturing side, the company eventually launched its own domestic cushion operation, and delivers special-order cushions in under 21 days. In-stock items ship in as little as 48 hours. Over time, the wholesale operation grew to encompass far more than rattan furniture too. Designed to be a one-stop resource for retailers, the company offers dealers maximum choice in a minimum footprint with upholstered looks that encompass both traditional and deep-seating options, as well as dining, lighting and decorative accessories. Light years from those early days in rattan, the most popular material now is called PoliSoul™, a poly lumber with the texture and heft of solid wood.

All the materials are extensively tested before ever being presented inside the company’s Main Street showroom during High Point Market. Developed with a retail mindset, there are no containers to buy, low freight rates and easy-to-use programs that eliminate the need for retailers of all stripes to stock a lot of inventory.

“What I like about them is once I place an order I can forget about it and go on to something else,” submits retailer Norton Johnson at Myrtle Beach-based A Summer Home, which specializes in furnishing coastal vacation properties and oceanfront homes. “The shipments are fast and always on time. It’s worry-free.”

Ryan Elwell

Ryan Elwell, manager of Royal Furniture and Design in Key West, Fla., and a Leader’s customer, appreciates buying extensively tested product with a retailer’s perspective.

Ryan Elwell, manager of full-line Royal Furniture & Design based in Key West, appreciates the company’s extensively tested products. “Salt water destroys everything here; it’s a very harsh environment,” he says. “Their products are very beneficial for our area.”

“As retailers ourselves, we know that it has to sell, and it has to last,” Tim Newton acknowledges. “For that reason, we independently test all of our own wicker before we’ll sell it, no matter who it comes from. We make sure that nothing is ferrous, meaning it won’t rust. We’re our own best customer and we put all that knowledge, all that time and effort into our quality to make our products right, because we know as a retailer, you’re going to hear back from the consumer, even if it’s 5 to 10 years from now. So we only sell things we know are going to last. And we believe that shows through in Leader’s online reputation too, which is a 4.8 out of five with probably 4,000 reviews.”

Adrienne Kent, president of Kent Furniture in Belleview, Fla. has been buying from the company for some 20 years. “They get to be a bit more fashion-forward (they came out with a new gray finish recently which of course is very hot right now) because they get direct feedback from consumers,” she says.

“They also are a great supplier for us because of their custom capabilities, which allows our customers to pick their fabrics and finishes and get what they want very quickly. And, they are a family-owned business like we are. When we go to the markets we actually get to sit face-to-face with the owners. They listen, and they take feedback, and that’s really important to an independent retailer.”

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