Stateroom Furniture

Craftsman built for dining in style

J F Williams Co Ltd, trading as Stateroom Furniture, is a private limited company manufacturing dining room furniture in its Newport
factory. Originating in Josiah Sleath’s cabinet making business (est 1778), the modern company dates to 1922. In 1972 there was a
management buy-out led by then MD, Charles Blackwell. The Blackwells and other members of the buy-out families still own 51%. The
balance is owned by the Welsh-based Ddraig Goch venture capital group which injected much needed capital to expand and invest in
new machinery and facilities in the boom years of the 1980s.
Whilst the link with the original Josiah Sleath is rather tenuous, the company still trades upon the connection, mentioning him in publicity
material and stressing the traditional craft nature of the business. This is reflected in the company’s manufacturing processes where,
although machinery is used to form major components, create joints, plane wood etc, final assembly and finishing is still done by hand.
Stateroom’s product range focuses on high quality reproduction dining room furniture (tables, chairs, sideboards, dressers etc- a leaflet
for the top selling Regency range is attached). Some items, such as the plainer more rustic dressers, tables and chairs can also be used
in the kitchen and have proven popular with those without a separate dining room. Items are made from premium hardwoods to a wide
variety of designs (the pattern book lists over 1200) in five ranges (Regency, Victorian, USA Colonial, Art Nouveau and modern
Scandinavian). Bespoke items can be built to order; something which has proven very popular with those renovating or refurnishing older
style houses in a period style (eg china cabinets can be constructed to a customer’s specification to fit a recess).
Stateroom occupies a position at the top-end of the market which is far removed from the MDF, plastic veneers and ‘knock-down’ (KD),
self assembly furniture of the mass market. This is reflected in both Stateroom’s prices and distribution channels, with prices starting at
c£200 for a single chair and going over £1000 for the larger tables and display cabinets. Items are available separately but c50% of sales
are of complete dining sets (table and 4-8 chairs) retailing at £1500- £2500. Sales are made via a number of channels, most notably
national, up-market department stores (including Harrods, Selfridges and John Lewis) and 73 specialist furniture retailers, mostly
independent and largely based in the more prosperous cities, county towns and the wealthy ‘stockbroker/footballer-belts’ of the South-
East and major conurbations. Of these, four operate as franchised showrooms, only selling Stateroom dining furniture (although they do
sell associated goods from other approved manufacturers) and in return enjoy prominence in advertising. By agreement with its retailers,
Stateroom will not sell dining room furniture direct to the public except via its existing showrooms. Additional sales are made through SR’s
own showrooms in London and Cardiff (London outsells Cardiff by three to one). A small number of contract sales go to restaurants,
hotels etc and a few items are exported to specialist stores, mainly in the USA (New York, Boston and Washington etc).
Promotions have focused on colour adverts in up-market lifestyle and interior design magazines (Country Life, Lady, Home and Garden,
World of Interiors, Homes and Antiques etc), the main trade magazine (The Cabinet Maker) and small display adverts in the Sunday
supplements. Retailers share costs with local advertisements and promotions. Advertising can be expensive (a ½ page is c£5000, a ¼
£3000; a 1/8 page in the Sunday Times supplement is £2000-3000), so SR’s advertising has been sporadic and limited by its funds
(cashflow is also a problem). SR has also exhibited several county fairs, the London Furniture Show and the Birmingham Interiors design
exhibition. A website acts as an online catalogue, directs customers to their local outlet and takes requests for the printed catalogue.
There is a basic name and address database of over 2500 individuals who requested catalogues over the last few years (it is unknown
whether they purchased). As SR mainly sells via retailers it holds very little data on its consumer/end users.
Last year the company appointed a new MD, Roger Mortimer, who has an MBA and extensive experience in the furniture manufacturing
and retail industry. The Board is Chaired by Fiona Blackwell and other board members include four other buy-out family shareholders, the
Ddraig Goch representative James Stewart and the Finance and Operations Directors. Beneath them are managers for Production,
Accounts, Distribution and Sales. The Sales Manager looks after the larger national accounts and South Wales/South West England with
a sales representative handling the smaller independent store accounts in the rest of the UK. He also manages a promotions executive
and two sales/customer services assistants, one of whom looks after the enquiries database.
Last year James Stewart expressed Ddraig Goch’s concern at SR’s poor sales and financial performance and that the factory is now
operating at 55% capacity. As a result a consultancy team was commissioned to identify opportunities to develop into new markets with
the sole caveat that they should broadly fit within SRs existing furniture or a related sector and market positioning. Capital reserves are
available to fund viable developments and James has said that extra venture capital may also be available for a strong business case
(but this would entail Ddraig Goch becoming the majority shareholder- something the others want to avoid). One of the consultants’
recommendations was that SR enter the kitchen furniture market, perhaps with a focus on free standing and/or premium quality fitted
units. These could be offered to both the consumer and contract/business markets (eg for installation in prestige new houses/apartments,
quality rented flats/holiday lets etc). Despite resistance from some board members (notably Fiona), it was agreed that a consultant should
be asked to write a report on how SR should go about approaching these opportunities (see separate briefing and attached market data).
Roger has also asked that the consultant should make recommendations on how PRIMARY research could answer several questions:
a) Retailers’ views, advice and level of interest in stocking a SR kitchen furniture range (both existing and potential stockists)
b) An accurate indication of whether SR’s existing target audience AND potential contract/business users would be interested in
buying SR kitchen furniture with an indication of the likely sales/penetration and the items/styles most in demand.
c) Customers’ (consumer and contract) reactions and views on the style and design of items (drawings & prototypes are available)
d) The development of a clear profile of the target customer segment and its characteristics (demographic/psychographic etc).
e) What brand name/logo should be used; ie retain/modify the SR one or create a new one (various options have been prepared)
f) Are kitchen furniture fashions/trends likely to remain the same over the next few years... what is likely to come in/out of fashion?
You should suggest and justify ONE DIFFERENT method for EACH OF THREE of the above, with a brief outline of how you would use it.
Stateroom Kitchen Furniture Case Study ©N Wellman 9/10
 Stateroom Furniture
Craftsman built for dining in style

This show only part of our Regency suite: see our catalogue for the full range
Dining suites: four or more chairs plus a table attract a 10% discount per chair

Our Range Stateroom Furniture

Victoria- solid and ornate classics London---Cardiff—Bath—Chester--Edinburgh--Brighton

Maryland- American colonial simplicity

About Stateroom: the company was founded in 1778 by
Nouveau- organic curves and plant motifs Josiah Sleath and since then has kept up his traditions. We
pride ourselves in making best quality hand crafted furniture
scandia- clean and simple lightwoods in premium grade hardwoods in classic traditional designs.

Stateroom Kitchen Furniture Case Study ©N Wellman 9/10

APPENDIX A: Stateroom: Sales of Dining Room Furniture 2004-2009 (latest available)
Index of Trade/Export UK DINING UK Din Rm UK Din Rm
SALES SR
SALES SR Sales Sales Direct Sales RSP ROOM INDEX OF @ 2009
£m (at RSP) Turnover RSP RSP
TURNOVER Profit on
SALES SALES PRICES
(Inv sales) Sales £k
(RSP) (Inv) (Mintel) (Mintel) (Mintel)
9.5
2004 10.3 106 0.83 7.10 357 550 104 113
(6.27)
9.7
2005 10.5 108 0.82 7.22 315 537 101 109
(6.40)
9.1
2006 9.8 101 0.71 6.72 272 550 104 110
(6.01)
9.3
2007 9.9 102 0.61 6.75 264 553 105 109
(6.14)
8.9
2008 9.6 99 0.72 6.59 187 545 103 103
(5.87)
9.0 530 100
2009 9.7 100 0.71 6.65 178 100
(5..94) (est) (est)
SALES: Sales at RSP of all items in each range, including full dining sets, separate tables/chairs, sideboards/dressers and other.
TRADE: Sales to furniture retailers/contract users and export at RSP (invoiced trade price is in brackets- av trade discount is 66% off RSP)
DIRECT: Sales made direct vis Stateroom’s own two showrooms(all sales made at RSP thus giving a c75% contribution)
Turn’r/Profit: Turnover, ie actual invoiced sales in £m; Profit, ie net profit before tax in £k

% SALES BY DISTRIBUTION CHANNEL (2009 sales by value @ RSP)

SR Showrooms Contract Dept Stores Furn Retailers Export TOTAL
% £ Sales: 7.5% 5.3% 44.5% 39.6% 3.1% 100%

APPENDIX B: Extracts from Market Research Report (October 2009)

624 respondents evenly distributed by class (A/B/C1), age and familiarity with SR, were asked how much they agreed with
the statements on a scale of 0-5 as: strongly disagree 0--- ---1--- ---2--------3-------4-------5 strongly agree

A/B/C1 householders’ views on SR furniture: Age: 20-34 35-49 50-64 65+ MEAN (av/5)
I find these style and designs attractive* 2.2 3.1 4.2 3.8 3.33
This style of furniture would fit well into my house* 1.8 2.7 3.8 4.1 3.12
Given the choice I would buy this style of furniture* 1.2 3.8 4.5 4.0 3.38
This style of furniture is too old fashioned for me* 3.1 2.1 1.8 1.2 2.03
This style of furniture isn’t right for modern houses* 3.8 4.1 3.7 3.9 3.89
I’d be interested in similar furniture for the bedroom 2.1 2.9 4.5 3.7 3.35
I’d be interested in similar furniture for the kitchen 3.2 4.1 4.7 3.6 3.87
I believe SR furniture is of exceptional quality** 4.4 3.7 3.8 4.2 4.00***
I believe SR furniture is good value for money** 3.6 2.8 2.7 2.9 2.87***
*respondents were shown photographs of SR furniture without knowing the brand.
** respondents were told that the brand was SR; only the 312 familiar with the brand were asked these questions.
*** lower numbers of 20- 34 year olds were familiar with SR: hence the mean is weighted towards older ages

Three focus groups of SR stockists were asked to comment (+ or -) on SR furniture: typical comments included:
 It’s well made and lovely wood... it may be replica but it’s a good option for those who can’t afford the real thing (ie antiques)
 Its good stuff, old-fashioned quality but nowadays with small rooms and self assembly IKEA stuff not many want (or can afford) it.
 We’d like a SR dining set but like many these days it’s our kitchen serves as our cooking, eating and even just hanging out area.
 Young people don’t fancy SR dining stuff... yet they buy old fashioned stuff for the kitchen; dressers, butchers blocks and the like.
 We’re specialists in a well-off, some would say posh, city (Bath)... we can sell things (like SR) that a store, say up north, can’t.
 We often get asked whether SR do other furniture... people like it and fancy doing the whole house in it (particularly their kitchens)
 We get lots of people coming in and looking- they love it but when the price is mentioned it frightens them off.
 I think SR has potential; it’s a small exclusive market but those who can afford it would probably buy other items as well.
 Well, it’s a bit old fashioned; today’s older couples grew up with Habitat and now it’s all IKEA- SR is more for the dinner party set.
 We have a traditional and well off clientele; our (dept) store sells to them... they’re the ones who want this sort of furniture.
 We have people asking for SR items that would go well in a kitchen- free standing tables, chairs, cupboards, dressers that sort of thing
 Wood is in right now... people worry about sustainability but they’ve fallen out of love with plastic and want wood’s feel and warmth.
 Things are tight at the moment... with the recession even those who could afford SR prices a year or two ago are putting off purchasing.
 Price is an issue... though the same people who wouldn’t pay £1-2000 for a SR suite would happily spend £7000+ refitting the kitchen.
Stateroom Kitchen Furniture Case Study © N Wellman 9/10
MARKET RESEARCH REPORTS: these are in Stateroom’s LRC and are available via its Electronic Library
Mintel: Kitchen Furniture - UK - August 2007
Mintel: Market Re-forecasts - Household - UK - March 2009
KeyNote: Business Ratio Report: Kitchen and bathroom furniture and fittings Industry 2009
KeyNote: Household Furniture 2008

Sample data are shown below: other data and reports are also be available from the above and other organisations

Top 10 Bathroom and Kitchen Companies: KeyNote

KeyNote
Stateroom Kitchen Furniture Case Study ©N Wellman 9/10