DUBUQUE, Iowa — Flexsteel Inds. is ready for 2023’s challenges with a broad spectrum of new introductions and a focus on logistics and product delivery for retail customers.
Furniture Today spoke with David Crimmins, Flexsteel’s vice president, sales, about the company’s plans for 2023 and what these will translate to for retailers.
What can retailers expect from you in 2023?
A continued focus on offering exceptional service levels. We are sustaining four-week lead times on domestic made-to-order product and 90%-plus in-stock on sourced goods. We’re taking many actions to combat inflation and target lower retail price points and our customers will see this in new product introductions and more efficient logistics models.
Do you anticipate any supply chain issues and if so, how are you addressing these?
Rising domestic freight costs are absolutely on our radar. We continue to take steps to optimize our logistics network by leveraging our dedicated fleet, enabling customer pick-up from our regional distribution centers and incentivizing our retailers to increase average cubes per stop.
How are your lead times for the upcoming year?
We are operating at four-week lead times at all domestic made-to-order facilities. We’ve been operating at these lead times for several months and are confident that we will maintain these levels going forward. These network-wide lead times are the best lead times Flexsteel has sustained in decades.
Are you working on any enhanced digital/logistics capabilities?
On the domestic side, we invested in a new Transportation Management System (TMS) around two years ago. We continue to monitor and update our business rules to offer improved customer experience (focus on reduced dwell times, lower damage) and also pursue lower cost fulfillment.
For sourced goods, we’ve invested in a couple of partnerships to offer seamless port-to-door delivery for our dealer-direct business with increased consistency and visibility while also leveraging best available ocean rates.
We are supplementing both domestic and ocean freight initiatives with enhanced services and visibility in our popular Backroom portal.
What, if anything, is keeping you up at night regarding the upcoming year?
Our biggest concern is the overall macroeconomic demand environment. We believe we are positioned well to compete in any environment and are aligned with strong retail partners in the majority of our markets. The unknown of how long and how low the current economic downturn runs remains a key topic in our strategic discussions.
What category(ies) will be big in 2023?
We expect leather motion to return to strong levels based on significantly reduced ocean freight rates. We are introducing new products with enhanced functionality and lower price points to fully capitalize on this opportunity.
We also see our forward-thinking retailer partners continue to focus on diversifying their supply chain. This demand for locally produced products, coupled with our expansions of our South Haven collection are leading to strong growth in domestic upholstery. We expect North American produced goods to continue to perform well in 2023.
How is your business performing now and what expectations do you have for 2023?
Our business is performing well. We certainly feel the effects a challenging demand environment, but we believe we’re competing well. We expect to continue to expand our placements and successfully introduce our new Charisma brand in 2023.
What’s your biggest development coming up in 2023, if any?
The biggest development we have heading into 2023 is the introduction of our new brand, Charisma. We launched Charisma brand at both the Las Vegas and High Point markets in recent months, with initial product focus on large scale, domestic upholstery targeting $999 to $1,199 retails. We will follow these successful launches in April with a second wave of product introductions and continue to expand this brand in the years to come.
We’re manufacturing this product in our Flexsteel South Haven production facilities, offering a great mixed fulfillment model for our retailers, which is also driving logistical efficiencies for our customer on the Flexsteel volume.
Are there any extensions to your brand for the upcoming year?
We have two very exciting expansions to our Flexsteel brand in process, both will be driving incremental sales for us and our retailers in early 2023. First, we introduced Flex, a modular upholstered seating solution with small-parcel, drop-ship fulfillment capabilities. This product and fulfillment model will further enhance our efforts to enable true ecommerce within our existing retail channel.
Secondly, we introduced Zecliner, a true sleep solution for the more than 20 million Americans that aren’t able to sleet in a bed at night for various reasons. We are focused on optimizing content and ensuring a true integrated retail experience for both of these extensions.
Do you have specific operational strategies you’ll be employing in the upcoming year?
Driving domestic freight/logistics cost reductions and passing these savings through to retailers is a key priority for us. We believe that together, with partnership from our retailers, that we can improve service levels and reduce non-value-added logistics costs at the same time.
We’re rethinking production scheduling, incentivizing larger orders, launching new brands to increase mixability, and building new tools on our Backroom portal to better partner with our retailers to reduce logistics costs.