Destination: Luxury

Destination: Luxury

By John Filippelli

In fact, LuxeHome has created such buzz in the two months since it opened its doors that many industry insiders believe the concept will change the way the kitchen and bath industry does business.

Billed as a resource center for interior designers, architects, custom builders and affluent consumers, LuxeHome features a collection of 23 upscale manufacturer, distributor and dealership boutiques comprised of "products that do not exist anywhere else," according to Katherine M. Flaherty, v.p./building products and special projects for Merchandise Mart Properties, Inc. (MMPI).

Offering a "consumer friendly, home-shopping experience," the collection of boutiques features a full range of working displays and vignettes from a host of high-end kitchen and bath manufacturers, including Clive Christian of Chicago, Poggenpohl U.S., Inc. and Neff Design Centre, Inc.

Flaherty believes a good part of LuxeHome's appeal is the way it ties in to high-end consumers' growing interest in buying a "name" as well as a product. "[Affluent consumers] are impressed by the brand, the experience and the dealer they are interacting with [when they come into a boutique]. They are very interested in having something made for them, but they are also very interested in brands. Therefore, the strength of the boutiques is their established brand names," says Flaherty.

Flaherty notes that the LuxeHome brand is being actively marketed with a no-holds-barred publicity campaign that has resulted in unprecedented attendance numbers. She cites as an example the grand opening event, which drew more than 8,000 consumers and trade professionals from all over the country, including both design industry luminaries and celebrities from all walks of life.

In fact, many believe the grand opening was a watershed moment in the kitchen and bath industry. As Mick De Giulio, president of de Giulio Kitchen Design, Inc. noted, "It was eye opening to understand the true interest and excitement for what we are bringing to people. We reached a new pinnacle," he adds, noting that there was an estimated seven-to-one ratio of consumers to professionals in attendance that night.

James W. Livingston, CKD, president of Smartrooms, Inc., concurs with that estimation: "From early in the evening, there were wall-to-wall people. There were people we specifically invited back the next day because we couldn't get to everybody [that night]."

But, while LuxeHome's grand opening drew plenty of notice with the public at large, the focus of LuxeHome has been on building successful, win-win partnerships that will benefit the design community at large, while redefining the luxury market and making it more accessible.

As Flaherty notes: "This is a place for CKDs and CBDs to formulate partnerships or expand upon existing partnerships with these available resources who are more than happy to work with each of them. There has never been another place for an independent CKD or CBD to come to show their clients the products that are available at LuxeHome."

At its core, LuxeHome is about marketing to a sophisticated lifestyle and supporting interaction between vendors, design professionals and their clients, according to Christopher G. Kennedy, president of MMPI.

"At a time when building and remodeling projects are top of mind with homeowners, the street-level, consumer-oriented boutiques of LuxeHome will be an ideal resource for consumers and trade professionals," he offers. "It really will define the high-end marketplace and become a touchstone for every decision [professionals and consumers] make related to their kitchen and bath business."

And, although this is the first time these resources have been available under one roof for the high-end market, this may just be the beginning, Kennedy notes.

"We believe the concept has legs and we [expect to] roll it out to different cities within 18 months to two years," he says.
New York-based Leslie Hart, executive v.p. for Newport Beach, CA-based Fry Communications, who attended the grand opening event and gave it glowing reviews, believes that LuxeHome's focus on lifestyle and its recognition of the consumer as an educated partner in the design process will lead people to its door.

"[LuxeHome enables affluent consumers] to finally see fashionable, exciting, upscale products that speak to their hearts, set off by inventive merchandising in attractive boutiques," she says.

Therefore, Flaherty notes, it's no surprise that in the heartland of America now beats the heart of the kitchen and bath industry.

"We believe LuxeHome is the haute couture of the kitchen and bath industry, much as Milan and Paris are to the world of fashion," she states.

Beneficial idea
Conceived 15 months ago and officially opened this past September, the 90,000-sq.-ft. LuxeHome offers a variety of benefits and services for designers and consumers, notes De Giulio.

"Unlike home centers, it's an environment where there is a consolidation of product that is more entrepreneurial in spirit. Therefore, instead of having products at a home center where you have one person understand each product, there is more specialized assistance," he says.

Hart agrees, noting that LuxeHome has the potential to change the way professionals and consumers interact during the design process.

"Consumers aren't buying the 'designers only' idea anymore. They want a more egalitarian approach with access to the best products," she says.

"A buyer can come in from anywhere and find world-class product here. It is centralized, which makes it very accessible," says De Giulio.

Barry Wachtel, president and owner of Abitare, Inc., a custom furniture manufacturer that creates custom interiors, notes that clients have even flown in on private jets to visit LuxeHome. "The overwhelming variety of resources in one house is the main benefit," he offers.

He adds: "Being a manufacturer and having the client buy directly from the shop [is also an advantage], because it offers a price break for the client. "

And De Giulio notes that comparable pricing structures among vendors at LuxeHome help to answer price objections, explaining that, in the end, LuxeHome clients will be more likely to make choices based on "taste, style and perceived ability to deliver."

Above all, Flaherty points out, LuxeHome facilitates a full-sensory, interactive experience as each boutique encourages the public, as well as interior designers, architects and custom builders to work with the boutiques' on-staff designers during any phase of a design project.

To better meet that need, Flaherty notes that LuxeHome also offers the 8,000-sq.-ft. "Design Resource Center," which features separate displays and vignettes of industry products. Attended to by a concierge charged with facilitating product selection, the design center was created to enable trade professionals and consumers to find and purchase new products and gain additional direction in their plans and needs.

Also of note, LuxeHome will offer regularly programmed special events such as in-boutique cooking demonstrations, while the Merchandise Mart is coordinating a series of Saturday events that will include book signings and design lectures by industry notables, Flaherty adds.

Good luxe
According to Kennedy, since LuxeHome's target clientele is affluent and educated, it only stands to reason that LuxeHome offers a comparable environment. To accomplish this, a strong marketing strategy was implemented to not only create the LuxeHome brand, but also to capitalize on the pre-existing and recognizable brands offered by each boutique.

Once a plan was established, Flaherty ensured that her boutique choices reflected LuxeHome's marketing message. She says, "We were very particular about the product mix and representation in LuxeHome. I contacted the appropriate manufacturers, distributors and dealers that would be best served at LuxeHome."

Kennedy adds, "We edited and sifted through prospective candidates and brought together a collection of individuals [the sum total of whom] represent [something] greater as a whole than individuals."

He continues, "The power of association is so important to branding. Therefore, we have conglomerated these companies so that there is a 'halo effect,' with each illuminating each other's brand."

Many of the boutiques had originally been located on the 13th floor of the Merchandise Mart, yet according to Jaime Rosen, president of Birger Juell, Ltd., "[A lot of] people didn't think the 13th floor was open to the public." Thus, the move to the first floor created greater visibility.

Summarizing his short-term goals for LuxeHome, Kennedy notes: "We want every architect and designer involved in residential products to have seen our ads, heard our message or visited our location, and we want every wealthy consumer to demand that they get a chance to come here."

Flaherty points to an estimated 400 percent increase in traffic and the response to the grand opening event as two indicators that Kennedy's goals are attainable. "The time is definitely right for a resource like this," she states.

Mix and match
With 23 boutiques established and four more planned, LuxeHome is designed to offer a wide range of upscale products, including cabinetry, countertops, flooring, kitchen systems, hardware, appliances, bath accessories, doors, marble, stone, granite and tile.

"The products are really luxury kitchen, bath and building products used in home-building and renovation projects and the services that are aligned with these types of products, including initial consultation, design, project management and installation," Flaherty describes. "In each boutique, there are completely designed and fully appointed room settings so that clients can see every aspect of the kitchen and the bath."

De Giulio adds: "The boutiques are entrepreneurial, therefore, [clients can] be handled better than they would in a big environment."

For Livingston whose boutique features antique stone, water elements and a bistro part of LuxeHome's appeal is that it affords the boutique owners creative latitude with their space. "When you walk through LuxeHome, you see that there is a lot of European style and design in some of the showrooms, but then there are traditional showrooms, as well," he notes.

Peter Sallick, president and CEO of Waterworks, suggests that opening up his flagship showroom at LuxeHome offers great opportunities for his company. "The Mart is the perfect location as it combines convenience for clients in the design community and an amazing retail location," he notes.

He continues: "This store goes beyond anything we've done in the past in our stores simply because of the square footage. It has four complete bathroom vignettes which give the customer a real sense of being in the environment. And we've added a lot of other unique and special elements to the space."

De Giulio, in contrast, took a different approach to setting up his boutique. "In terms of a message, we have taken a risk as to how we did our showroom. Unlike most, we did not center on product, but rather lifestyle settings. We did not need to put in a lot of door styles and confusing things. We designed it simply and more spare than most people on the floor have done."

Flaherty believes that technology is an important component of each boutique as well, saying: "Whether it be in a traditional or contemporary design aspect, [technology is very important] because you see a lot of lighting controls and computer technology. We have no less than 20 plasma-screen televisions hidden in the millwork. The entertainment and information components are being brought into every showroom."

Wachtel, whose boutique features technology that creates a two-way video link between his showroom and a technology dealership, continues: "Our entire showroom is operated off a very sophisticated system."

He also points out that at the center of the Abitare boutique is a home theater mock up as well as a sample area that shows the firm's offerings, including various veneers and custom doors.

But, regardless of how each boutique's wares are presented, De Giulio notes that there is one thing that will make the difference between success and failure: "We need to interact and connect with the clients and they need to feel that the designer understands them and what they want to do."

Ready, set, compete
While some might see the concept of locating multiple kitchen and bath firms in one place as a competitive threat to each, the consensus is that the benefits outweigh any potential downside.

In fact, many see the competitive environment as being a driving force for LuxeHome's success, since it encourages a higher level of creativity and excellence key ingredients to selling the high-end market. As Hart notes, "Clearly, clustering all of the boutiques in one area open to the public sparked a competitive environment that spawned creativity."

Flaherty agrees, noting, "the competitive setting has really made every designer, dealer and manufacturer rise to the occasion and strive to have the best boutique and identity for what their products and services are."

De Giulio concurs that there are benefits to having the competition located nearby, explaining, "Clients still want to be informed and they won't settle for [committing to investing large amounts] in their home without having a sense of competing product. We still need to sell them."

Others believe the focus on branding and the diversity of styles offered create a less competitive environment than one might expect. As Livingston states, "I think a product is a product and price points can move or sway that decision. But, design is not that way, and I see only a few in competition to us."

Wachtel agrees: "There are no fears about competition because [what I offer is unique]. I am the only company that is offering a full-service, turn-key scenario and I am the only custom furniture manufacturer here."

But De Giulio believes "Anybody who is selling like products in the market place should be perceived as competition. That is great. If you are afraid of that, you shouldn't be in the business."

However, perhaps a bigger concern has been the demand caused by the enormous amount of press LuxeHome has received and whether vendors will be able to meet that. For instance, De Giulio questions whether there are enough trained professionals to serve the market, not only in his firm, but all of the boutiques. He also wonders if manufacturers can deliver enough one-of-a-kind products in a timely fashion.

Says Hart: "LuxeHome proves that there will be more business for everyone. Now we have to be sure we develop the infrastructure and capacity to satisfy demand."

Flaherty notes, however, that as a response to high demand, most boutique owners as well as MMPI have implemented contingency plans, with many having already increased their staff size substantially in preparation.

Livingston agrees: "We've geared up for [high demand]. We have realigned some of our people in order to keep an eye on the traffic as it comes in. If the ultimate outcome and the net worth of the move [from the previous location] in volume is more than 25%, then we would have to refigure it."

De Giulio concurs: "Each raise of the bar causes others to raise the bar and [in the end], the strong will survive."

Future luxe
While LuxeHome has proven so far to be an enormous success, Kennedy and Flaherty believe that this is just the tip of the iceberg, with plans in place to duplicate LuxeHome in major metropolitan areas around the country.

"I think that LuxeHome is the future," she notes. "[The reason for this] is that affluent homeowners desire quality high-end products in their home and they need a place to facilitate that purchase."

She notes that MMPI is considering "a number of locations," for future LuxeHome centers, and expects to roll out the LuxeHome concept elsewhere in the next 18 months to two years.

In order for a new LuxeHome to be created, Kennedy notes, a consensus needs to be developed among potential vendors.

Summarizing, he offers: "We believe in the power of partnerships. Together we are stronger than apart. We can attract more attention by creating a larger spectacle." KBDN