Unity Marketing Comments On FBI Chapter 11 Filing

Furniture World News Desk on 9/15/2013

Editor's note: Commentary by Pam Danziger was written before last the recent Chapter 11 filing announcement.

This week's Wall Street Journal reports that Furniture Brands International, which markets under brands including Drexel Hill, Thomasville and Broyhill, is working with advisers to evaluate ways to off load debt, including Chapter 11 bankruptcy. The article reports that in 2012 the company had sales of about $1 billion, which is roughly half of what the company made a decade ago. The company is also reported to have lost $91 million in the last two fiscal years and it isn't expecting anything different for 2013. All told, it hasn't generated a profit since 2006.

Without a doubt, Furniture Brands, like almost every other company, has faced tremendous difficulties brought on by the recession. But the company kept doing business in the same old way, while everything else around them changed, most especially the furniture customer's diminished taste for traditional styles sold in traditional furniture stores at list prices. The company got deeply into debt borrowing against the false assumption that once the recession eased, their old customers would come back to their brands. But that was a bad bet, since more aggressive, customer-attuned and innovative home furnishings companies changed with the times. Competitors like Restoration Hardware, which Furniture Brands didn't even have to think about five years ago, has now emerged as a powerhouse since the recession.

To me it is sad to see a once great company with great brands go down the tubes mainly because they failed to respond to customer changes happening right under their noses, but that they failed to recognize. The company's brands primarily target the affluent customer base, those who still have discretionary money to spend on new furnishings but are keen not to spend any more than they have to for quality that may be lacking, especially for furniture no longer manufactured in the USA.

About Pam Danziger and Unity Marketing: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer. She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar. Luxury Daily named Pam to its list of "Women to Watch in 2013." 

Pam gives luxury marketers "All Access" to the mind of the luxury consumer. She uses qualitative and quantitative market research to learn about their brand preferences, shopping habits, and attitudes about their luxury lifestyles, then turns these insights into actionable strategies for marketers to use to reach these high spending consumers. Unity Marketing is the voice of the luxury consumer for such clients as PPR, Diageo, Starwood, Google, Constellation Wines, Luxottica, Orient-Express Hotels, Italian Trade Commission, Marie Claire magazine, The World Gold Council, and The Conference Board.

Pam's latest book is Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury (Paramount Market Publishing, 2011). Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006; Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes,(Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

Comments can be Emailed to pam at pam@unitymarketingonline.com or call (717) 336-1600.