by Planned divestiture of non-core businesses allows company to focus on marketing its own brand, which includes expanding its store footprint
MONROE, Mich. — Industry observers paying close attention to La-Z-Boy’s earnings statements, conference calls and investor presentations in recent years likely recall a continued emphasis on its Century Vision strategy. At the core of this concept first launched in 2021 is growth of its retail store footprint and a continued focus on its La-Z-Boy brand.
The company has followed through on both commitments, both in the marketing of its brand — one example being “Long Live the Lazy” marketing campaign — and the growth of its retail store network.
Just this past summer, for example, it announced its planned acquisition of a 15-store La-Z-Boy store network from Atlanta Furniture Galleries LLC. Projected to add some $80 million in annual sales, this recently completed acquisition brings the number of company-owned stores to 60% of the total 370 La-Z-Boy store network, up from 45% of the estimated 350-store network in 2020.
By fiscal year 2027, the company plans to have 400 La-Z-Boy stores, including 245 company-owned locations and the balance being independently owned stores.
During its recent earnings call, company Chair, President and CEO Melinda Whittington also noted that the company opened its 15th Joybird retail store in Columbus, Ohio, and is planning to open three to four new Joybird locations this fiscal year, which ends in April 2026.
The company’s messaging about retail expansion and focus has been consistent over the past couple of years: It sees the increasing store footprint as a key to its growth, which is also supported by its core La-Z-Boy-branded products ranging from recliners, lift chairs and stationary and swivel chairs to a wide selection of stationary and motion sofas and sectionals to ottomans and sleepers.
Obviously the company has a lot invested in this branded strategy, a potentially risky venture for some furniture companies as many consumers don’t know industry brands or simply gravitate toward other well-known retailers in their marketplace. Yet as one of the most well-known brands in the industry, the company is well positioned to compete alongside other well-known brands such as Ashley and retailers Rooms To Go and Havertys, for example.
This brings us to the company’s planned exit of what it has described as its non-core businesses, including case goods divisions American Drew and Kincaid and Kincaid Upholstery. If the initial reaction in the industry was surprise that these companies are still around, just imagine what those brands mean to the consumer.
Each company has an excellent presentation on their respective websites that offers compelling product photography, detailed specs and even information about care and cleaning.
But any successful link between the company and the consumer often has as much to do about delivery of information to consumer and trade press as it is about attractive product photography on a website. That said, these brands have not been aggressive about promoting their product lines, marketing initiatives or strategic moves in the marketplace in recent years. Perhaps that was part of the strategy: Stay under the radar and don’t let anyone — particularly your competition — know what you’re doing.
However, it’s a strategy that the late, great Steve Kincaid would have never agreed to. Always the gentleman, he also was always accessible to many of us in the trade press and always eager to tell the company’s story.
Hopefully these companies will transition to new ownership soon. But a key part of that success moving forward will be to tell their stories and not hide in the shadows. We welcome that opportunity to tell those stories as we believe these businesses are still important brands in the marketplace.
La-Z-Boy is certainly taking that part of its job — telling its story — seriously. And it’s a big reason for its continued success and why it will likely reach that 400 stores sooner rather than later. Unlike the other aforementioned brands, it wants its name out there in both the consumer and the trade press.
Of course, this also is part of its responsibility as a public company. Investors expect results, and a good way to get results is through marketing and advertising.
While the exit of its non-core businesses will reduce its revenues by about $30 million, Whittington made clear in its earnings call that it will continue to offer case goods as part of its retail mix. She also noted that the company has realigned its executive commercial leadership and corporate staffing to focus on its core business and to enhance operating efficiency.
“As our industry continues to evolve, it’s important we remain agile and evolve our business to position us for continued profitable growth into the future,” Whittington said. “Collectively, these initiatives sharpen our focus on growing our core business, where we have a leadership position and a right to win with the consumer. They also align with our Century Vision goals of growing double the market and delivering double-digit operating margins over the long term. The furniture industry has experienced tremendous change and challenge in recent years. Despite this, our mission remains the same: to empower our people to transform rooms, homes and communities. Our iconic brand, well-positioned manufacturing base, strong balance sheet and talented team provide the foundation for sustained sales growth and margin expansion.”
