ASHLEY FURNITURE UPDATE DELAWARE, NEW JERSEY & PENNSYLVANIA

FOR

Volume 2, Issue 5 APRIL 2010

Featured Products
B520 - Ridgley The "Ridgley" bedroom collection uses a rich finish and stylish details to create furniture that is sure to enhance any bedroom decor with an exciting contemporary design. The dark brown finish is complimented with satin nickel hardware and flows smoothly over the deeply profiled details creating a stylish flair to this relaxed contemporary design that fit flawlessly into any home.

DELAWARE, NEW JERSEY & PENNSYLVANIA

Ashley Update

67001 Collin - Spa The "Collin-Spa" upholstery collection features a refreshing contemporary style that is matched only in the plush comfort it adds to your living room. Surrounded by the light toned upholstery fabric, the plush supportive seating and back cushions are bookended by the subtle curved arms create a comfortable contemporary design that is sure to fit flawlessly into any home decor. With the rich finished tapered block feet finishing out this contemporary design, the collection is a shining addition to any home. 31501 Pressley - Cocoa The two-toned contemporary design along with the plush comfort of this upholstery collection creates a versatile and stylish collection that is the perfect choice for any living room decor. The plush pillow top arms and thick bustle back design work with the "scoop" chaise seating cushions to cradle you in the comfort you deserve. With the light earth-toned fabric perfectly combined with the rich faux leather upholstery, this furniture creates a stylish two-toned contemporary collection that fits flawlessly into any home.

Change your Order?
Ashley’s new Change My Order will allow you to make changes to your order without requiring a call into Customer Service. The Change My Order option on your home page should be coming in 30 to 60 days. This new functionality will allow you to do business with Ashley when it is convenient for you as it will be available 24/7. We are very excited to offer you this new option in the very near future! We appreciate your business and continual support in the market place, thank you.

High Point Market
April 17 – 22
Building: IHFC / Space H900

Remember to check out our website

@
www.tristatefurn.imagineretailer.com

Trends to watch for:  Distressed finishes  White, in case goods and upholstery  Lots of vivid colors such as purples, reds, and turquoise

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A S H L E Y U P D AT E

Customer Incentives

Promotional Event Ideas
Looking for another promotion to keep things fresh? Consider adding the following to your calendar:

Gift Card Denominations from $10 - $100

Spring Cleaning /Clearance Tax Return Season May Day - Saturday, May 1st Cinco de Mayo - May 5, Mexico’s Independence Day

Just $6.75

Mother’s Day - Sunday, May 9 Graduation Season - Furniture for the dorm or for a first time home June - Perfect Wedding/Wedding Gift Flag Day - Monday, June 14

Summer Grilling Package—all for only $85
2 age $9 e Pack t Tailga Rookie

Father’s Day - Sunday, June 20, I’m sure Dad could use a new Ashley Recliner!

ot yM pp Ha Day??

’s her

Harry & David Collection Touch of Mink

CRYSTAL GLASS 6 PC...10 OZ DRINK SET

Wenzel Going Just Camping Package - $67.00

Contact your Marketing Specialist today for more information and ideas!

VOLUME 2, ISSUE 5

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U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships
By Kyunghee Park and Wendy Leung March 29, 2010 (Bloomberg) South Korea’s biggest port, overwhelmed with empty containers a year ago, is now dealing with shipping lines that have more cargo than they can carry. Surging shipments of furniture, electronics and clothes to the U.S. and Europe, coupled with capacity cuts by shipping lines, has caused as much as 15 percent of containers to be delayed in Busan this year, often by more than a week, according to Park Jong Ho, assistant general manager at Busan International Container Terminal Co. “With the economy recovering, we have been seeing a lot of containers that didn’t make it out on time because there wasn’t enough space on ships,” he said. A capacity crunch on transpacific routes has disrupted deliveries of Asian and U.S. exports, prompting a probe by U.S. regulators. Container lines have cut trips and imposed higher rates on customers, or shippers, after slumping trade and an excess supply of vessels caused industrywide losses of about $20 billion last year, according to Drewry Shipping Consultants Ltd. “There is seething anger in the shipper community over the way rates have been raised,” said Bjorn Van Jensen, who manages more than 100,000 container shipments a year as logistics head at appliance-maker Electrolux AB. “Carriers see a tight supply situation and they are looking to get rates back up.” Container shipments at Busan, the world’s fifth-busiest port, rose 21 percent in the first two months, rebounding from the slump last year that forced Park to lease extra space to help store more than 31,000 empty boxes. In the U.S., retail container traffic will likely rise 13 percent this month and by 17 percent in the first half as shops restock, according to the Washington-based National Retail Federation. That’s caused rates for ad hoc shipments on Asia-U.S. routes to jump about 50 percent this year to around $2,100 per forty-foot box, according to Johnson Leung, a Hong Kong-based analyst at Tufton Oceanic Ltd., the world’s largest shipDaryl Peveto/LUCEO for The Wall Street Journal ping hedge-fund group. “The volume is surprisingly high,” he said. “Still, rates were at low levels at the beginning of this year, and shipping lines have to increase them to break even.” U.S. customers have also contributed to the disruptions and higher rates by cutting inventories to two-year lows and placing more rush orders on concerns about holding stock. “The trend now is that orders are always made from Europe and the U.S. very rapidly and at the very last minute,” said Ken Lee, a general manager in the sea-freight unit at Hong Kong- based Vinflair Shipping Ltd. The U.S. Federal Maritime Commission earlier this month began a “fact-finding investigation” into shipping capacity because of U.S. importers and exporters’ struggles to find space. Temporary Trend? Lines haven’t added more vessels on transpacific routes, citing concerns about the sustainability of demand. The jobless rate in the U.S. remains near 10 percent. Building permits, a sign of future construction, also fell 1.6 percent last month after a 4.7 percent drop in January. “We have seen no reason to add extra ships as the trend is temporary,” said A.P. Moeller-Maersk A/S Chief Executive Officer Nils Smedegaard Andersen. “With the problems this industry has had, I think we’re all be very cautious before sending new ships into service.” Maersk expects a “modest” 2010 profit following its first loss in six decades last year. Industrywide, container lines may pare loses to about $7 billion this year, according to Drewry. Annual Contracts The surge in shipments coincides with annual contract negotiations between lines and customers. Maersk and Mediterranean Shipping Co., the world’s two largest container lines, and 13 others are seeking an extra $800 per cargo box on Asia-U.S. west coast routes. That’s about a 50 percent increase, according to Leung. “If we can get an agreement for that kind of rate increase, then a lot of the shipping companies will become profitable,” said Kim Young Min, chief executive officer of Hanjin Shipping Co. and chairman of the Transpacific Stabilization Agreement, or TSA, whose 15 members carry almost 90 percent of Asia-U.S. boxes. Lines in the group, which has limited U.S. antitrust protection, are already imposing a $400 per container “emergency revenue charge” to pare losses on contracts agreed last year during the worst of the trade slump. Rates fell by as much as half in those deals, according to the TSA. The charge will be discontinued when the new contracts start around May. Hardened Gamblers Customers have to accept additional levies or lines won’t carry their cargo, Stockholm-based Electrolux’s Jensen said. That’s causing “enormous uncertainty” as shippers don’t know whether additional levies will follow, he said. “I don’t know anybody who thrives on this kind of volatility except hardened gamblers,” he said. Even so, “shippers understand that rates have to come back up” as the lines’ losses are unsustainable, he said. New ship deliveries may disrupt lines’ efforts to raise rates this year as shipyards hand over vessels ordered before the trade slump began. Shipbuilders hold container-vessel orders with a combined capacity equal to about 33 percent of the existing global fleet, according to data compiled by Bloomberg. “New capacity entering service this year could weigh on rates,” said Jay Ryu, a Hong Kong-based analyst at Mirae Asset Securities Co. “This isn’t really a recovery because lines have reduced capacity and manipulated the market.” Amid last year’s slump, lines mothballed more than 500 ships worldwide to pare capacity. They also began operating vessels at slower speeds, which cuts fuel usage and reduces the total amount of cargo each ship can haul per month. Such steps are likely to continue because of the oversupply of ships, said Tung Chee Chen, chairman of Orient Overseas (International) Ltd., Hong Kong’s biggest container line. “We learnt a very bitter lesson last year,” he said about the industry. “We will all be more careful and disciplined in managing our tonnage this year.”

The Twenty-Four Hour WOW
American Idol judge Simon Cowell often comments that even though a contestant's performance was good, and sometimes even quite good, nobody will remember it in twenty-four hours. It wasn't a wow. This is exactly the difference between good service and an extraordinary experience. I've recently spoken with any number of retailers who tell me how good their service is. Even if that's the case (and sometimes it's not) most customers aren't going to remember it a day later. It's not a twenty-four hour WOW. Some people might say it's okay to have service that's only "good" as long as the customer makes a purchase. And that's fine if you're in a transactional business, but most specialty stores need more than that. Specialty retailers need to deliver something the customer remembers beyond the next day to drive them back into the store again. Just as important is getting the customer to tell family and friends about the store. The experiences that WOW the customer and stay with them are exactly what customers tell people about when they're advocating for a business.

What makes an experience stay with the customer longer than one day?

First and foremost, something occurs that is different from what the customer will experience at any other store or business that day. That's why I believe offering the customer a drink and/or something to eat works. It simply doesn't happen that often. Think about it. Does a person tell her friends, "They're the store that gives people space to shop?" (Something I've heard three times this week.) Or is someone more likely to say, "They're the nice store that offered us a drink and some cheese and crackers." It's a great differentiator. I don't buy the argument that "too many stores are doing it." Very few are doing it, and many of those that say they do don't do it regularly. Miss one customer and you miss a twenty-four-hour-plus WOW. If you choose not to serve food and drinks I encourage you think of another differentiator that will allow your store to stand out from the rest of the pack. It takes more than just good service. Another way to make a long-term impression is do something personal for your customer. It can be something as simple as helping them with their child or calling a competitor's store to see if they have something in stock. I know some people don't do that. I say be so positive about the experience you deliver that you're fine sending your customer to the competition for an item. There's always a way to do something special and personal for a customer. I can't tell you exactly what it is, but you'll know it when you see it. The key is to be looking for the opportunity, and then act on it.

What makes an experience stay with the customer longer than one day?

Here's today's challenge. As each customer leaves ask yourself, "Will that person remember this experience twenty-four hours from now?" If the answer is "no," attempt to create a twenty-four hour wow with the next customer.
If the answer is yes, chances are you just created one or more sales in your future, and I bet that customer might also be walking out with a purchase. Y o u r A s h le y R e p r e s e n t a t i v e s Case Goods: Bill Nagle - (608) 304-1746 billnagle@ashleyfurniture.com Bob Nagle - (608)304-1745 rnagleoffice@ashleyfurniture.com Jay Ferber - (267) 265-5597 jayferber@ashleyfurniture.com John Nagle - (215) 704-1174 jnagle@ashleyfurniture.com Motion: Sean Orlando - (215) 669-1242 sorlando1@ashleyfurniture.com Paul Morris - (267) 249-1010 pmorris@ashleyfurniture.com Brian Berger - (570) 877-9100 bberger@ashleyfurniture.com Stationary: Tom Moore - (973) 897-9122 tmoore@ashleyfurniture.com Anthony Forrest - (215) 880-5122 aforrest@ashleyfurniture.com Todd Csencsits - (610) 909-3031 tcsencsits@ ashleyfurniture.com Scott Deibler - (717)689-0142 sdeibler@ashleyfurniture.com

Impending Price Increase
Ashley recently announced a small price increase for many of their items product line due to industry-wide changes in the costs-of-goods.  The container companies lost more than $2 billion dollars. As a result container freight rates are all up 25-40%     Leather costs have increased by 139% Steel prices also have increased 50% since last April. This impacts the cost of springs, fasteners, hard ware and mechanisms Fiber and foam costs doubled since last April OSB and plywood are up 25-35% since last April

Although this has a significant impact on product costs, Ashley is doing everything they can to minimize the costs to our dealers. In addition to pressing the factories to increase productivity, the company is working to reduce operational costs in every manner possible without risking quality or our level of service to you. In addition, to ease the impact, the new prices will not impact orders until later this month. The increase will take effect on orders placed on April 18 or later and on any orders shipped after May 15. Prices will not change for the GO's from Las Vegas. Having to take a price increase is painful for us all, but it needs to be done in order to continue serve our customers. There have been lots of horror stories about dealers having to cover warranties from factories that are no longer in business. That is not going to happen to you with Ashley. Please contact your marketing specialist for more details. He can provide you with a more detailed analysis of the cost impacts and also help you place orders prior to the new pricing.