La-Z-Boy Incorporated (NYSE:LZB) is considering teaming up with Amazon.com, Inc. (NASDAQ:AMZN) as it looks to win more millennials and Generation X customers. Chief Executive, Kurt Durrow, made the remarks after the furniture maker reported earnings and sales that fell short of Wall Street expectations.
The company reported earnings of $11.7 million or 24 cents a share, compared to earnings of $13.8 million reported last year first quarter. Analysts were expecting earnings of 29 cents a share. Sales rose 5% to 357.1 million but still fell short of analysts’ expectations of $358 million. Shares of the company were down by 20% in response to weak quarterly earnings.
Concerned by the first quarter earnings, the chief executive officer says they have opened discussions with Amazon Marketplace about the possibility of exploring ‘potential opportunities’. While the talks are still in preliminary stages La-Z, hopes to ink a deal that will supplement and complement its existing distribution network.
Pursuing sales opportunities on Amazon Marketplace is part of a strategy that seeks to diversify the company’s current customer base. La-Z Boy believes that a deal with the e-commerce giant will allow it to reach out to more young customers who do most of their shopping online.
“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,” said Mr. Durrow.
La-Z Boy hopes to provide a best-in-class online omnipresence with the latest online push. The online drive has already resulted in a change in the way the company’s furniture gets displayed in furniture retailer Wayfair. The company has also upgraded its website, in addition to supplying some of its products to third party e-commerce retailers as it looks to diversify its revenue stream.
The company’s primary goal is to capture customers online before they enter stores as one of the ways of improving upsell opportunity.