During a conference call this week to discuss quarterly earnings results, Chief Executive Kurt Darrow said the company is holding talks with Amazon about potential opportunities “that would complement and support our existing distribution.” The discussions, focused on Amazon’s Marketplace, are in the early stages and nothing definitive has been reached.
“While the La-Z boy brand is extremely powerful, it has a core demographic and we recognize the brand does not effectively reach all consumers, particularly millennials and Gen X consumers, who are looking for non-traditional brands and experiences,” he said during the call. La-Z-Boy already has an arrangement with online home furnishing retailer Wayfair Inc.
With online customers tending to be younger, Darrow also said the company is and will continue to make investments in startups in the space but wouldn't name names. He said the strategy is already paying off with one investment adding to results. “We do believe these investments are an effective use of our capital, and when coupled with our supply chain strengths and advantages, the combination will make these brands successful and provide a strong return for our shareholders,” the CEO told analysts. The move on the part of La-Z-Boy to potentially start selling its furniture on Amazon comes at a time when the e-commerce giant is pushing further into that area of retail.
In May, The Wall Street Journal reported it was building four or more huge warehouses to store bulky items such as furniture as it sets its sights on Wayfair and Williams-Sonoma Inc. WSM
La-Z-Boy’s news came amid a steep decline in shares after the company posted fiscal first-quarter results that missed Wall Street projections. Earnings came in at $0.24 a share, which was below the $0.28 analysts were looking for, while revenue of $357.1 million missed the $358 million consensus.
Published on Thursday, August 24, 2017