Brand Health Check: Land of Leather

Land of Leather
Land of Leather

LONDON - The sofa company's sales are down, and it has been getting bad press.

Land of Leather ads are as much a Christmas staple as sprouts, family arguments and indigestion. So it is appropriate that the sofa seller has become a bit of a turkey.

Last week, the company announced a pre-tax loss of £360,000 in the 53 weeks to 3 August, compared with a £16m profit in the previous year. Like-for-like sales fell by 29%, 200 jobs were axed and store openings suspended.

Land of Leather is citing ‘challenging market conditions', in particular the fall in the number of people moving house, as the root cause of its problems, but there are clearly other factors.

About a quarter of the firm's annual sales usually occur between Boxing Day and the end of January, but there was a sharp drop in transactions last time round, causing its share value to halve. This does not bode well, given the even more challenging conditions predicted for the coming Christmas period.

In May, Land of Leather was fined for allowing inadequately trained staff to sell payment protection insurance, and was accused of selling ‘toxic sofas' after concealed ‘anti-mould' sachets caused an unsightly skin reaction in some customers.

It was reported that 1000 people with itchy skin that looked like it had been ‘scalded with hot water' planned to sue Land of Leather. The company withdrew the sofas in question, but claimed it had received few complaints.

So, where now? We asked Smith & Milton founding partner Howard Milton, who has worked on major retail brands, and Tom Hudson, creative director at John Lewis' agency, Lowe.

 Howard Milton founding partner, Smith & Milton

With less-than-vertical sales figures, BBC Watchdog investigations into fungicide-related toxic rashes and ethical concerns about its Chinese manufacture, Land of Leather's skin is looking decidedly pallid. Its TV ads regularly make it into Marketing's Adwatch listing, so punters obviously recall them. Trouble is, they're not acting on them like they used to.

Problems surrounding its credit deals may well have diluted the appeal of ‘massive savings' offers. But also, in today's climate, there is something fundamentally wrong with the brand.

First, the price; big purchases are not on people's shopping lists for the foreseeable future, and Land of Leather's product is big in every sense.

This size factor is relevant. The sofas look gloriously comfortable in-store and on TV, but who wants to sacrifice 80% of floor space in the average living room? Dwindling sales suggest that those prepared for that sacrifice have already made the purchase.

Most significantly, while the rest of the UK is inching toward an understanding that being a lard-arsed couch potato is not the way of the future, the product looks designed for one thing only - stretching prostrate and feeding yourself with anything that doesn't require a knife and fork.

 Remedy

  • Stop behaving like 80s ‘loadsamoney'.
  • Broaden the product offer. Think Carphone Warehouse - it does a lot more than carphones.
  • Stand for something that is relevant today or, more importantly, sustain-able tomorrow. Leather is natural. It's hardwearing. It's defensible.
  • Kick the bloated branding into touch.
  • It never was a badge for style, just comfort. That's not enough today.

 

Tom Hudson creative director, Lowe

OK, we all know how bad it is, and non-essential, big-ticket retail is right up there with banking in the eye of the storm. The only difference is that the leaders of the free world won't be meeting any time soon to put together a gazillion-dollar rescue package for Land of Leather.

But even when you've got a faux leather corner suite the size of the Hindenburg to sit on, it's no good sitting around blaming the economy. Mistakes have been made here.

Land of Leather is focused on one product in one category. Not good. Consumer forums are full of complaints from disappointed customers. Not good. It has the only website in the category that does not guarantee delivery in time for Christmas. Not good.

But perhaps the biggest mistake at Land of Leather is that in hard times, it is still obsessed with the hard sell. None of the £23m that it spent on marketing last year went toward making people want to buy.

 Remedy

  • Be innovative. Think like a fashion brand and introduce a small range
  • of exciting products at a landmark price point; the ‘must have' sofas for 2009 that every lifestyle editor wants to feature.
  • Be interesting. Photograph the product so that it looks fantastic, in fantastic settings. Make me want it.
  • Be prepared. If you missed Christmas, don't miss the January sales.
  • Hire extra staff to engage with every customer and look after them until they have exactly what they want.
  • Run a trade-in promotion. Sometimes the biggest obstacle to a new sofa is getting rid of the old one.

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