Ashley builds RTA program with 250 new pieces
AT THE MARKET — Ashley Furniture is adding to its successful RTA program during this week’s High Point Market with 250 new pieces of wood product and upholstery, a new category being added to the mix.
The number of SKUs is roughly the same as the initial launch at the summer Las Vegas market and includes bedroom, dining room, home office, home entertainment and gaming stations.
There are also 14 new collections of upholstery featuring sofa, loveseat and chair combinations scaled for small space living and available via express delivery. Produced at Ashley’s domestic and Vietnam plants, it includes sofas that retail from $299 to $499.
Four-piece bedrooms that include a complete bed, dresser, nightstand and either a three- or five-drawer chest are targeted to retail from $499 to $799. The nine new bedrooms featured are in addition to six current sets, noted Todd Wanek, Ashley president and CEO.
“We are really expanding our assortment significantly,” Wanek said. “We are taking our best materials, finishes, details and hardware and are applying that to an RTA concept. All the details that typically go into a bedroom set, we applied them to an RTA product.”
The wood product will be made primarily at Homestar North America’s factory in Statesville, N.C., which Ashley recently acquired to expand its RTA production. Some product, including components, will be made in Ashley’s Arcadia, Wis., and Advance, N.C., plants as Homestar ramps up its own production in the segment.
According to Ashley Vice President Steve Miller, the 310,000-square-foot Statesville facility is adding new equipment such as edge banders, panel saws and drills and is upgrading other existing equipment in order to boost production.
“We will be spending a significant amount of money on refurbishing the machines we already have and getting them to full capacity,” Miller said, adding that the refurbishment also involves investing in preventative maintenance and new parts to help increase productivity.
Today, the facility produces between 3,000 and 4,000 units of bedroom per week. This is expected to jump to 15,000 units per week over the next 12 months.
“There is a lot of investment going back into the current equipment to get the business ramped up,” Wanek noted. “We also are investing millions in new equipment that is being purchased and delivered over the next four months or prior. … Our goal is to double their business and double their production within the next six to 12 months. In bedroom furniture, it is going to be a five times increase in production levels.”
Wanek said the RTA expansion in High Point is partly in response to the success of the initial launch in Las Vegas. He estimated that 80% of the initial 250 bedroom, dining room, entertainment, office, occasional and gaming furniture SKUs are going into production.
“This time around we expect it to be around the same success rate or higher,” Wanek noted. “We have done a lot of market research on this, and we gained a lot of knowledge of where the business is and the styles and designs we need to do.”
A main difference for the High Point Market is the addition of upholstery. And unlike Las Vegas, where the product was segmented by category, the product in High Point will be segmented into different lifestyle settings.
“It will be very trendy and lifestyle based, and it will be very eclectic,” Wanek said. “There will be different finishes and different lifestyles. We were probably a little narrower at the Las Vegas Market on all the lifestyles we were showing. … Now we built them out so it is very logical and all makes sense.”
Wanek said a key goal in the new presentation is to show rooms full of furniture at an exceptional value.
“What we are trying to do is assort it in a way where you can buy the room, including a living room full of furniture with the upholstery, the occasional tables and the entertainment centers all at an unbelievable price,” he said. “Our goal is to have outstanding prices on each one of these collections of rooms.”
The company is also developing the product in an easy-to-assemble format, where an entire bedroom, for example, can be assembled in roughly an hour.
Available from each of Ashley’s regional distribution centers, the full RTA launch will be shipping in February and March 2020. Wanek also estimated that the line will be available for next day delivery for 65% of the U.S. population.
Based on where the market is headed, he believes the expansion of RTA is timely for Ashley and its customers.
“I think the customer is changing a lot,” he said. “We are seeing a higher propensity of people that want to rent. The square footage of rental properties is becoming more important, and the ability to move product up and down stairs has become more important as well.
“We feel that the marketplace is changing substantially, and we have to adjust to those changes, whether it is style or whether it is size and we are adjusting as quickly as we can. And we want to have a product offering that supports those customers’ decisions.”
The line can be seen at Ashley’s showroom in space H-900 of the International Home Furnishings Center.