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Drexel reclassifies stores

By Clint Engel -- Furniture Today, March 31, 2002

Drexel, N.C. — Drexel Heritage has pared back its dedicated store count by two-thirds, reclassifying dealers to reflect their true participation in an upgraded store program.

Drexel recognizes 33 dedicated stores today, down from 91 previously. The change doesn't shrink Drexel's distribution, but it does reclassify as large galleries many dealers that had been considered Drexel Heritage Home Inspirations stores.

While the move has been almost two years in the making, it coincides with a need to be consistent with new parent company Furniture Brands International's definition of a dedicated store, said Dan Grow, Drexel Heritage president.

Grow

Grow said Drexel also has upgraded its store program with new exterior and interior features, introduced in September at Mathis Bros.' new Home Inspirations store in Oklahoma City. That unit represents Drexel's top-level store, and all future growth — including plans for at least nine new units this year — will be on par with it, he said.

On last year's Furniture/Today survey of Top 100 U.S. Furniture Stores, Drexel Heritage Home Inspirations was ranked No. 20 with 91 stores generating an estimated $316 million in furniture, bedding and accessory sales in 2000.

Last year, the newly classified 30-store network had sales of about $123 million, Grow estimated. That is down from about $127 million in sales for the same- sized network in 2000, he said. Drexel has opened three stores in 2002, one in Atlanta last week.

This year, Drexel is looking for same-store sales growth of about 7% and, with the new stores, he sees total sales of $133.5 million.

Late last year, Furniture Brands International acquired Drexel Heritage, Henredon and Maitland-Smith from LifeStyle Furnishings International in a deal valued at $303 million. Furniture Brands owns Thomasville, which went through a reclassification in 1996, raising the standards of what it considered a Thomasville Home Furnishings Store. But Thomasville didn't revise its store count as much as Drexel.

"When Furniture Brands purchased Drexel Heritage, the continuity between the Thomasville dedicated program and the Drexel program was very important," Grow said. One reason is that FBI is publicly held and needs consistency for reporting purposes.

But the tougher standards at Drexel have been coming for some time and would have shown up on the Top 100 this year regardless of the purchase, he said.

Two years ago, Drexel introduced its Privilege Partnership program, establishing 10 key ingredients needed to be a top-level store.

That included 100% brand dedication, proper exterior and interior designs and 100% staff dedication. The more criteria a dealer met, the higher its privilege designation, which went from basic to silver to gold to platinum. Benefits such as discounts and marketing help improve with each privilege level.

"What had taken place over quite a few years is that (some retail locations) were classified as stores and really should have been classified as big galleries," Grow said.

Drexel officials spent months meeting with dealers, giving them time to make the changes necessary to remain stores. Of the 60 that didn't make it, Grow believes 10 or so will convert eventually.

"Some of them just can't," he said. "They don't have the facilities or the stores are too big" to operate strictly as Home Inspirations stores.

Drexel Heritage plans to open about 10 stores a year and some may be conversions, he said.

All nine identified for this year are new stores. Three have opened in Rochester, Minn.; Plano, Texas; and Atlanta. Others are coming in Portland, Maine; Denver; Akron, Ohio; San Diego; Pleasanton, Calif.; and Las Vegas. One or two more, including a possible conversion, may be announced this year.

While Drexel is counting silver and platinum level dealers among its stores, only platinum level units, which meet all 10 Privilege criteria, will be rolled out from now on.

Their features will include an updated storefront with awnings and moldings around the perimeter that accentuate the exterior. New interior elements include a central location for a large-swatch fabric wall and design center, and lifestyle-themed areas at the corners.

Grow believes FBI's commitment to retail branding will help Drexel expand its store program.

"There's a lot of interest at the retail level for these specialty stores, and I think that can only help us," he said.

The Mathis Bros. 16,500-square-foot Drexel Heritage Home Inspirations store, which opened in September, is a prototype for all new dedicated Drexel stores under the manufacturer's upgraded standards.

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