Buying groups remain major industry influence
By Furniture Today Staff -- Furniture Today, June 2, 2002
Ottawa — Buying and marketing groups remain potent forces in Canada's furniture retailing industry, but imports and competition from the majors has caused a shift in their priorities.
Five buying groups currently dominate the retail scene in this country, but only two — Mega Group of Saskatoon, Saskatchewan, and the Allied Home Furnishings Network, based in Vancouver, British Columbia — responded to this year's survey.
The other three — Cantrex Group of Montreal; Les Marchands P.A.S., also of Montreal; and Home Furniture Stores of Elmira, Ontario — declined to participate, citing the need to protect proprietary information.
For Mega Group, although membership declined slightly, the co-operatively owned group reported respectable increases in its retail sales of furniture, bedding and accessories.
In 2001, Mega's 327 members, operating 370 stores, garnered FBA sales of C$370 million out of total revenues of C$960 million. In 2000, 339 members operating 380 stores with FBA sales of C$340 million and total revenues of C$955.
By hiring Michael Graydon as president and chief executive officer last year, Mega moved toward a more disciplined approach to furniture retailing. Graydon is a veteran of Sobey's, the national alliance of independently owned grocery stores. Sobey's operations are highly disciplined, with every member using the same product mix and merchandising strategy.
This is the approach Mega is implementing with its Countrywide banner, No. 10 on this year's Top 10. The 64 member stores are currently implementing a common P.O.S. system, converting to a common store design and introducing an expanded core merchandise and advertising program coupled with a common sales training system.
Also high on Mega's priority list is expanding its Concept Décor renovation projects among its affiliated members.
The second key buying group to respond to the survey, Allied comprises 10 of this country's largest independent retailers. This independent buying group operated 68 stores last year, generating C$133 million in retail sales of FBA out of total revenues of C$186 million, showing an increase in total number of stores and sales.
Among Allied's members are Today's Colonial Furniture, a three-unit chain based in Ottawa; Cohen's, the largest furniture retailer in Newfoundland; and Gallery One in Halifax, Nova Scotia.
Historically, Cantrex Group has been ranked as Canada's largest furniture buying and marketing group. Its Furniture Plus banner currently holds the No. 8 spot on the Top 10. Until three years ago it was a publicly held company but has since been acquired by Transamerica Commercial Finance (Canada), which has since taken the company private.
In recent years, Cantrex's most visible success story has been the acquisition and expansion of Corbeil Electromenagers, a Quebec chain of appliance stores. Building on that success, Cantrex has launched Appliance Expert, which will roll out nationwide as galleries and as free-standing units.
In Quebec, Cantrex's priorities include the redevelopment and expansion of Le Meubleur, similar to Furniture Plus in most respects. The group is also developing Mattress World, a bedding specialist. Last year, this Cantrex banner had eight members operating 12 stores, mostly in Ontario, with retail sales of C$13.4 million.
Les Marchands P.A.S. is the only buying group that doesn't offer central billing and other inventory financing services to its members. With the exception of two or three stores in Eastern Ontario, its membership is Quebec-based and includes some of the area's best-known independent retailers. This co-operatively owned group recently hired Pierre Royal as its executive director.
The smallest of the furniture buying groups is Home Furniture. It currently has 54 members, down from 78 in the mid-1990s. It's a division of Home Hardware, the largest co-operatively owned chain of hardware stores in Canada.
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