The sky is crying - The Downfall Of Furniture Brands

International

If you’re a blues nut, like I am, you’ll know this iconic song, originally written by Elmore James, played by Eric Clapton, but made famous by Stevie Ray Vaughn. The recording was released, by his brother, Jimmie Vaughn, after Stevie Ray’s tragic death in a small plane crash So why am I referencing this song? Simple, on Monday, September 9th at 2:30PM I got an email update that Furniture Brands International (FBI) filed for Chapter 11 bankruptcy. A few hours later I received another update that FBI planned to sell or liquidate their once prized jewel: Lane Furniture. And another one that Lane will lay off 1,450 employees:

“The sky is crying

Can't you see the tears roll down the street

I've got a real real real real bad feelin”

It was a very very sad day in the furniture world. No one wants to witness the demise of any American Brand, especially iconic brands that are, or were, in the FBI stable. I have seen and experienced the demise of many iconic brands in my lifetime: Levitz, Oldsmobile, Montgomery Wards, Circuit City, Borders and so many more. We all know what happened here, it’s always the same, nothing new here to report. They failed because of three reasons: Poor Planning: By failing to plan, you are planning to fail, and when you get

comfortable you WILL get ambushed, it’s just a matter of when, not how!

When I joined this industry in 2000, FBI was the “king of the hill”. They were over $2.1bn in sales and had many of the iconic furniture brands in the industry. They thought they were invincible and stayed “that” course with a degree of unmitigated arrogance. They didn’t plan based off what was happening in technology, they didn’t plan to figure out how to implement a distribution strategy, they didn't plan based on the changes in consumer demographics and behaviors and they didn’t plan by bringing in people and processes that would have led to innovation and long term market penetration. They were late to the dance in virtually everything, especially when it came to manufacturing overseas and it cost them dearly in lost market share and extraordinary costs/charge offs to implement this process. By the time they figured it out, many companies were already making new and innovative strides and FBI was always playing “catch up with a vanilla strategy to win”. I know that feeling and I know what a "Vanilla Strategy is and always playing Catch-UP" is... believe me, I’m a Minnesota Vikings Fan.

Poor Execution: You can’t think yourself into acting; you must ACT yourself into thinking: Back when I was first old enough to drink beer, there was a brewing company called G Heileman Brewing Company of Lacrosse Wisconsin. They were the 3rd largest brewery behind Budweiser and Miller. They had a huge stable of beers: Black Label, Stroh’s, Old Style, Olympia, Grain Belt, Rainier and many more. Why did they fail? Simple; they had too many brands under one roof. Why is that bad you ask? When you have all these Brands, they eventually become independent entities competing against each other for “retail floor space”, marketing dollars and personnel. That leads to a “silo mentality” of what the brand is, how it is communicated and who gets credit for anything. This will eventually create intentional/unintentional sabotage to insure the survival of the fittest brand and the employees working for job security on

that specific brand. It also inhibits long term planning, because the brand managers must report/validate their existence quarterly, instead of developing the resources for a long term plan. To justify their existence, corners are cut, processes ignored and problems begin to spiral out of control. FBI has/had many brands, some iconic, some not. But using the above analogy, let’s take a look at this scenario. Each brand had its own President, its own marketing department, its own sales force and mostly separate manufacturing facilities. Each was a silo onto itself loaded with furniture people that wanted it done their way...the way it has always been done... and none were focused on a common integrated vision and mission. It was a holding company of names, without innovation, purpose or passion. Maybe you think I’m just some marketing guy that doesn’t understand the “big picture” as to how an organization should be structured and held accountable. I'm confident my record and experience in this industry speaks for itself. The first order for me when I work for, or with, any company revolves around logistics; the ability to “deliver” on any and all promises. Anybody can be cute and have a great brand message, BUT see how long that works for you when you don’t deliver….even once! Consumers have too many choices at the touch of a finger...in seconds you've been replaced. It's called the World Wide Web!

Poor Personnel &Leadership:

Leadership is "organizing a group of people to achieve a common goal". In my world, that goal is making money. Yep, keeping score by how much money you have in your

checking account.

Well in January of this year, I wrote an article called “The 3 Percenters….Salesperson Meet Bus” on my blog Social4retail.com under Retail "RANTS" & Blogs.

Read The 3% Article Here

I wrote that article specifically because of MY experience with FBI. I didn’t mention them at the time in the article out of respect, hoping they might turn this convoluted business model around. I was also hoping it may inspire them and other companies in similar positions to wake up and pay attention to the new retail rules that consumers have now defined. I met with, FBI - specifically Broyhill at the Vegas Market to discuss implementing an online business platform for one of our clients. We had a senior level Pow Wow… everyone was there.....all the way to the top. We met with all their Key Executives, even the Chairman. We outlined our vision and how we wanted the stable of FBI Brands in our business model. Everything was awesome. Promises and commitments were made. We left the meeting feeling empowered and excited about this new found partnership. That was the last time we felt that way. After the meeting we tried to implement the business model with them as we discussed it. The first problem came when we tried to access their database(s) for product pictures, descriptions, pricing, inventory and more to populate our website and business model. They DID NOT have this process available, at least not for Broyhill. If they did, it was a "secret" and no one told us about it. They did have it in various places, but not in a simple exportable/importable file that is “standard” today with getting products on the web. To access one (1) product and the content necessary for that SKU, it took me 20 minutes…..YIKES, a lifetime in today’s wired world! (Think if they had 500 SKU's X 20 minutes, it would have taken me 166 hours. I called, I emailed, I thought about sending cookies or cupcakes and all I got was……“crickets”.

I was shocked! How could a commissioned salesperson, or better than that, Senior Executives NOT respond….especially when your business model has lost 50% of their market share in 10 years? You’d think they’d be grateful for new business, right? You’d think they’d have a common sense of urgency, right? Wasn’t anyone reading the news about the constant losses at FBI, the stock delisting threats, and more? Wasn’t anyone SCARED enough to act to keep their job or career? Apparently NOT! Maybe they didn't like us or decided not to do business with us, but I didn't get the benefit of hearing that or anything else, so we gave up. I never ever received a phone call; email…nada…crickets again, but I saved on the shipping of cupcakes. In business ignoring people; employees, customers, supplier - (et al) is arrogant and unprofessional. Not the good definition of arrogance where confidence and conviction rule, that other definition. So as I wrote in this magazine in August of 2012, we have now witnessed the Death

Of A Brand As We Know It...Sure someone may hopefully revive these brands and I hope someone does, for we need solid Brands in this business to insure innovation in quality and style. My fear, however, is that these once household names, revered by people who wanted to decorate their LifeStyle, for their LifeStage may be out of luck. This once stable of iconic brands will be sold, liquidated or whatever…. and it didn’t

need to happen!

The sky is crying

Can't you see the tears roll down the street

I've got a real real real real bad feelin

You know the sky, the sky's been cryin

Can you see the tears roll down my nose

How sad, how very sad, for these tears did not need to be shed!

Enjoy Stevie Ray's Version HERE