There's an old joke about motor scooters: They're fun until your friends see you on one. The same can be said about reclining chairs. Who wouldn't want to kick back in a La-Z-Boy Power Rocker with ten-speed heated massage, remote control, and a battery backup in case of a power outage? Then again, would you want your friends to see you in one?
That dilemma creates a big problem for La-Z-Boy Inc. (LZB). The company has one of the most recognizable brand names in the nation, one practically synonymous with relaxation. And yet the 76-year-old Monroe (Mich.)-based company just isn't cool. That's why La-Z-Boy turned to someone who is: former fashion designer Todd Oldham, 42, who created a new line of furniture and accessories for the easy-chair king. "I got lots of laughs," Oldham admits, when he first told his fashionista friends he was designing for La-Z-Boy. "Then they started asking questions."
Oldham may end up with the final chuckle. His Todd Oldham by La-Z-Boy collection was the surprise hit of the International Home Furnishings Market show last fall in High Point, N.C. And the collection, rolling out this spring in 323 La-Z-Boy stores, as well as other furniture outlets, is generating plenty of buzz. "The sharpest collection ever to hit the mainstream furniture market," declared a recent issue of Metropolitan Home. "Talk about shaking things up," gushed the Chicago Tribune's Home & Garden section, which featured an Oldham sofa on its cover.
La-Z-Boy could use a lift. It's the nation's second-largest furniture maker after Furniture Brands International Inc. (FBN). But revenues have been flat at around $2.1 billion for the past three years, thanks to a sharp September 11-related drop-off in sales to the hotel industry and competition from Chinese imports. Meanwhile, profits fell about 40% last year to $36 million, due to special charges. La-Z-Boy is counting on an uptick in its core upholstered furniture.
THE NEXT GENERATION. La-Z-Boy started moving beyond recliners in the early 1980s, but it hasn't done a great job of getting that message out. Only half the company's sales are under the La-Z-Boy brand, and recliners make about half of that. But its stodgy armchair image could become even more of a problem as the company's core 40-to-60-year-old customers exit their furniture-buying years and a new wave of style-conscious twentysomethings rolls in. Enter Oldham, who first worked with La-Z-Boy two years ago when the company asked him to create a chair for a charity event. La-Z-Boy liked Oldham's approach and hired him to design the new line, which includes furniture, lamps, picture frames, vases, and candles. The goal: to make younger buyers forget their reservations about the brand. Borrowing from such mid-century designers as Charles Eames, Russel Wright, and Eero Saarinen, Oldham put together a collection of stylish, retro furniture with simple lines.
If the style doesn't wow younger shoppers, the prices might. At around $700 for an armchair and $1,000 for a sofa, the line is priced slightly below La-Z-Boy's regular lineup. And the size of the furniture has been scaled down to fit apartments or starter homes. The arms, legs, and backs on Oldham's Snap sofa even come off so that it can become a daybed, or just squeezed up a narrow staircase. "I've had too many sofas stuck in doorways that had to be returned," Oldham says.
La-Z-Boy is tweaking its marketing, too. The company is shifting some of its overall advertising budget, estimated at $63 million a year by market research firm TNS Media Intelligence/CMR. Instead of media outlets aimed at the middle-aged, such as Reader's Digest and the USA Network (V), La-Z-Boy is targeting hipper channels such as InStyle magazine and MTV (VIA), with ads featuring the boyish-looking Oldham. "We're trying to get at people when they're thinking not just about homes but about style," says J. Douglas Collier, vice-president of marketing at La-Z-Boy. Of course, the company's stores will still carry large selections of its traditional offerings, for those so inclined.
Despite the early praise, success is anything but assured for Oldham. His career as an upscale clothing designer fizzled in the late 1990s when he failed to build a following for his high-contrast colors and patterns. A line of brightly colored dorm-room furnishings for Target Corp. (TGT) quietly ended in 2003 after two years. But La-Z-Boy dealers love him. "Before this, if we had a customer who wanted something clean and contemporary, we had maybe three models to show them," says Adam Simcoe, manager of an independent La-Z-Boy store in Los Angeles, where he is creating an industrial-chic metal and brick Todd Oldham gallery. If that excitement turns into the hoped-for sales increases, La-Z-Boy and Oldham both will be able to put their feet up for a while. By Christopher Palmeri in Los Angeles