Department stores revert to cash cow
By Carole Sloan -- Furniture Today, August 26, 2002
One of the more interesting things that emerges from Furniture/Today's survey of retailing giants in this issue is the transformation that is taking place in the department store channel.
This segment has lost a number of players over the years, most recently Stern's, a Federated division that closed last year. Some of its stores shut forever, others were converted to either Bloomingdale's or Macy's East, both Federated siblings.
The big change has come in the number and types of stores the department store segment is using to sell furniture.
And although many are writing off this channel as increasingly insignificant, we see that all the May units in 2001 were ahead of 2000 in furniture and bedding sales, with one exception, which was flat.
At JCPenney and Federated in particular, the number of stores carrying furniture has declined, in some instances dramatically. In Penney's case, the number of stores carrying furniture dropped to 195 last year from 210 in 2000. Despite that 7.1% decline, furniture sales slipped just 5%.
At Federated, the comparison between store numbers and sales is even more striking.
Each of the Federated divisions is moving more and more to free-standing gallery formats to sell furniture, where a store of, say, 40,000 square feet serves a wider area than an in-store department could, and with more merchandise and significantly more intense presentation.
And these days, bedding is being reintroduced into many of the department stores that abandoned furniture departments. For those in furnitureland who don't understand this move, think cash cow. Bedding and sheet-and-towel departments are among the highest traffic and revenue generators in department stores.
It's something furniture stores might want to think about and digest.
