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Price, purpose spur casual-furniture sales | Charlotte Observer

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Price, purpose spur casual-furniture sales

By Maria Halkias - Dallas Morning News

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July 17, 2008 12:00 AM

Wal-Mart's new Canopy and J.C. Penney's new Linden Street home furnishings brands don't have the name recognition of an Ikea or a Pottery Barn, but they're going after the same customers.

Last month, Wal-Mart Stores Inc. mailed shoppers a 33-page Canopy catalog and launched www.canopyliving.com.

Online, the find-a-store function leads shoppers to Wal-Mart locations.

The catalog notes that items delivered to Wal-Mart stores have free shipping.

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But the Wal-Mart name scarcely appears, by design. The company says it's trying to create a brand identity for Canopy, a line of ready-to-assemble furniture, bedding, rugs, lighting and dinnerware.

Penney created Linden Street because it noticed customers were gravitating to its simpler furniture, window coverings and bedding.

They were buying comfortable everyday furniture. The emphasis was on function and less ornate pieces.

Analysts say the two retailers are launching modestly priced furniture lines this summer to satisfy a shift that's been coming for some time.

Even before the housing downturn, Americans were migrating to a more casual style and lower prices for furniture.

Penney's and Wal-Mart's moves signal a recognition that the furniture industry has to “find ways to attract a new generation,” said Jerry Epperson, a longtime furniture analyst for investment banking firm Mann, Armistead & Epperson.

“They aren't going to do it selling $5,000 to $10,000 dining room and bedroom suites,” he said. “Younger people are buying items, not suites, and they want them to be practical and functional.”

Smaller living spaces, younger households and the desire for everything to be both functional and fashionable have led consumers to ready-to-assemble furniture and modestly priced pieces that will move from first apartment to family room.

Ikea, now in 33 U.S. markets, gets credit for showing the way. Others say it goes deeper than that. If we're comfortable buying clothes at Target and wedding dresses at J. Crew, why not buy a sleigh bed from Wal-Mart or a candlelight chandelier from J.C. Penney?

Shifting tastes

There's “a very real shift” to less expensive furniture, said Nick McCoy, furniture analyst at TNS Retail Forward.

Even before the economic headwinds, Retail Forward's shopper surveys found a mindset toward changing furniture more often, rather than buying and sticking with heirlooms.

Crate & Barrel recognized the shift a few years ago and created CB2 to compete with Target and Ikea.

While Wal-Mart's and Penney's timing may seem awful, Epperson said it's excellent. Whatever product is on the floor when the economy turns will get the attention of shoppers, he said.

Every city has had independent furniture stores that have gone out of business.

Major specialty furniture chains from Pottery Barn to Restoration Hardware are hurting in this downturn, but they have loyal customers.

Whether their shoppers gravitate to a Penney or a Wal-Mart remains to be seen, McCoy said.

“Still, everyone should be paying attention to cross-shopping. People may at least try it out with a piece or two,” he said.

Price and function are the hooks.

“Ikea is one of the most successful in recent years, and they are a lower-price retailer,” McCoy said. “Linden Street and Canopy are lower-priced, too, but these days everything is competing with gas pumps and grocery stores.”

Jeff Allison, Penney's executive vice president for home, said that although the furniture business is tough, “we're in it and we're going to continue to be in it.”

Linden Street is in 30 home categories, and he expects that window coverings and items that people can replace easily will initially do best.

“We'll be cautious with the furniture part of it,” he said.

To get Linden Street's larger pieces into stores that don't have furniture departments, Penney will use the merchandise instead of store fixtures.

It will set up beds, nightstands, rugs and lamps in the bedding department to display sheets and comforters.

Signs will let shoppers know the furniture is for sale, too.

Linden Street

Penney's in-house design team created Linden Street.

The theme is simple, with two wood finishes pine and cherry and three colors for slipcover sofas. Lots of function is built in, such as an electrical outlet hidden in a nightstand.

Steve Castella, vice president in product development for soft home goods, said the creative team looked at what was missing from Penney's furniture offerings when it formulated a new lifestyle brand.

Those items matched with individual pieces that online customers were buying.

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