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8 Jan 2004
US baby boomers keep "home" sector thriving


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Ultimate in comfort: "boomer-style" bed from French Heritage.

Americans born between 1946 and 1964 - the "baby boomer" generation - are credited with keeping the US economy basically on track for the past 20 years.

According to Susan Sterne of the Economic Analysis Association, the consumer spree arose because consumers between 35 and 44 spend about 20% more than average consumers, while those between 45 and 54 spend about 30% more. Between them, these two age groups represent about 40% of US households and half of its spending.

US boomers are said to be concerned (even obsessed) with healthy lifestyles, diet, exercise, comfort and products that enhance their lives and looks. If age they must, they are going to do so slowly and as gracefully as possible.

Hence, sales have peaked for bottled water, non-fat foods, diet books, food steamers, non-stick frying pans and healthy diet options. That's not to mention day spas, domestic spas, cosmetics, gyms and trainers, tooth whiteners and designer vitamins and minerals.

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Enhancement of life.
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Wilton Kitchen Island: appeal to "boomers".

Home equipment directed at the "boomers"

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Bath day glamour from Asiaphiles.

The Kitchen and Bath Industry Show in Chicago during April 2003 introduced products directed at "boomers", like jetted tubs, full-featured appliances, high-end cabinets and innovations such as Kohler's skinny sink - all designed for the bigger homes and second homes in which these twin generations are indulging.

Indeed, according to David Berson, chief economist with real estate giant Fannie Mae, "baby boomers" have not yet made their full force felt in the home market. "The 'baby boomer' market has not been fully tapped, since 'boomers' will not reach their full home buying strength until their 70s, and that won't happen for more than a decade."

Says Berson, about three million "baby boomers" have yet to become first-time home buyers, so there is plenty of room to grow.

In a special report for the International Builders Show, Al Ehrbar reckons that the second wave of "baby boomers" (those born between 1956 and 1964) have a greater appetite for homes than was at first thought.

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Apothecary portfolio.

Ehrbar says they bought later in life, mainly because sky-high interest rates froze many of them out of the market in the 1980s. "The bulk of the 'baby boom' generation will remain in the 'trade-up' market well past 2010," believes Ehrbar. "After that, they will swell demand for retirement housing."

Along with bigger and better homes, come all sorts of other opportunities. "Buyers of new homes spend nearly US$9,000 on furniture, appliances, decoration and other improvements," notes Ehrbar.

Demand for second homes has grown too, reflected by casual furnishing purchases in that market.

The High Point Home Furnishings Market, said to be the biggest in the world, certainly did not ignore the trend. Comfort, colour, detailing, custom choice and casual designs were in profusion.

Beds befitting luxury

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Kingsdown software system for the perfect bed.

The bedding category particularly took aim at "boomers". Just a few years ago, an adjustable bed was a medical unit, while today companies such as Kingsdown have a complete range of adjustable beds with a variety of mattresses. The company is at pains to say that its product emphasis is on health not age, but many customers also have older children, a second home and incomes often above US$50,000.

Tempur-Pedic, whose pressure-relieving mattresses were developed by NASA and perfected for consumer use in Sweden, took the luxury bed a peg higher with its Celebrity Bed. This mattress has an ultra-plush pillow top design and is covered in luxurious cashmere. It retails at about US$1,000 over the company's premier version. A smaller mattress is available on an adjustable bed.

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Stearns & Foster line.

Stearns & Foster has introduced a line of Personality Beds that incorporate a special system creating a stable, durable mattress. Models retail from between US$1,499 and US$4,999. "More and more consumers are selectively trading up," says Jim Ross, vice president for marketing.

Another firm, Serta, is offering FireBlocker, a proprietary open-flame resistant feature on all 2004 models of its Perfect Sleeper, Perfect Night and Masterpiece products.

Simmons has re-worked its Beauty Rest pocketed cable coil feature, while Knickerbocker has introduced a bed support system for comfort, both believing that consumers are ready to spend more for better bedding.

Among the many home furnish vendors at High Point targeting "boomers" was Ekornes, which held six focus groups to gain consumer insight into its Stressless reclining chairs. The company's typical customers, a mix of those whose children have left home, active seniors and a double income couples with no children, were between the ages of 45 and 74 and with incomes of US$75,000.

Chair options are more upmarket

Sales of Ekornes chairs have increased by 20% over the past year, with the accent on comfort rather than style. Having said that, the company is now showing chairs in a trendy range of browns and reds.

Drexel Heritage along with Lillian August have been targeting high end groups, principally females over 46 with household incomes between US$125,000 and US$150,000, and above.

Says Drexel's president and CEO, Jeff Young: "this customer's home is her showcase, a place to welcome guests, host functions, and be seen. And her tastes range from traditional to eclectic.

Thomasville has been tempting "baby boomers" to trade up with an Extreme Fabrics programme that gives customers a choice of durable, washable - yet stylish and elegant - high performance fabrics on its upholstered lines. It also speaks to the growing diversity of the company's customers.

Much of the success of the new collections are pre-determined by the ability to buy, which in turn depends on available credit. Sterne of the Economic Analysis Association expects spending demographics to deteriorate slightly in the next decade, as younger and relatively poor households grow rapidly, while aging "baby boomers" slowly lose purchasing power. But for now, at least, the good times continue to "boom".

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Drexel Heritage targets high end groups.
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Extreme Fabric from Thomasville.

from special correspondent Phyllis Sweed, New York

Contacts:

Company

Contact Person

Tel

Asiaphiles

New York: Patrice Cohen

Tel: (1) 212-686-5811
Tel: (1) 818-550-1450
(California)

Drexel Heritage

Jeff Young, president and CEO Stephen Carlson, vice president, marketing

Tel: (1) 336-803-1306

Economic Analysis Assoc.

Susan Sterne

Tel: (1) 203-869-9667

Ekornes

Joyce Bonaventura, public relations

Tel: (1) 704-376-8870

House Beautiful

Jeanne Noonan, publisher

Tel: (1) 212-903-5250

Mann, Armstead & Epperson

Jerry Epperson, managing partner

Tel: (1) 804-644-1200

Tempur-Pedic

Lee White, vice president, retail

Tel: (1) 859-514-4735

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