Klaussnerhome finding customers
By Clint Engel -- Furniture Today, February 2, 2009
ASHEBORO, N.C. — While the tough economic climate has slowed the rollout of the new Klaussnerhome Furnishings store format, the operators of the initial stores say they are pleased with early results.
Manufacturer Klaussner launched its dedicated store strategy in late 2007 as part of a larger re-branding move that included everything from a new e-commerce initiative and a new logo to new transportation and logistics programs, enabling quick shipment of less-than-truckload orders.
The first Klaussnerhome was opened September 2007 in greater Philadelphia by Barney Daley, who went on to open two more in the area. Another was opened in Ashburn, Va., in the Washington, D.C., area by Bill Dixon, who also operates Kincaid gallery stores.
And this past July, Jeff Davis, former senior vice president of marketing and business development for Klaussner, opened his first Klaussner store in Greensboro, N.C., in a former Sofa Express location. Klaussner had owned the Sofa Express chain, which filed for bankruptcy in late 2007 and subsequently closed.
The five Klaussnerhome stores open to date range from 18,000 to 24,000 square feet.
Davis said that “even in this environment,” his Greensboro store managed to exceed sales projections in its first quarter, which ended in October. He said that by the first week into the second quarter, written business had passed the million-dollar mark.
He wouldn't project full-year sales because the business climate has been changing so dramatically, he said. “We're just taking it a month and quarter at a time,” Davis said, but added that if the store does $1 million a quarter, “I'd be thrilled.”
One positive surprise, he said, has been the strength of non-upholstery categories — especially bedroom and dining room furniture — which has accounted for about 30% of sales. And the average ticket, at more than $1,500, has been greater than expected, helped in part by the strong showing in case goods, he said.
He also said the average gross margin percentage for the Greensboro store has been in the high 40s, which is better than expected.
Davis added that his expansion plans haven't changed, noting that he still intends to open about eight Klaussnerhomes in North Carolina. The second was expected to open in the first quarter of this calendar year and that still could happen, he said.
“I believe there are some real opportunities to come in the near future for commercial real estate,” he said. “I'm sitting back, waiting patiently for those opportunities to arrive.”
Shortly after Klaussner announced the dedicated store rollout in 2007, it said it planned to have 15 to 20 stores open by the end of 2008 and as many as 100 opened within five years.
It now says the current business climate has slowed those plans, although its existing stores are seeing success with many customers who shop around but ultimately make Klaussnerhome their choice.
“The impact on our stores has been minimal compared to the rest of the industry,” said Klaussner Home President and CEO J.B. Davis. “Thankfully, we are still experiencing a positive reaction to our retail model, even in today's difficult climate.”
All of its existing and potential licensees are seeking expansion opportunities, the company said, although it wouldn't confirm specific markets or timing.
In a news release, store owner Bill Dixon cited the “combination of customization and solid value” as a point of differentiation for the Klaussnershome brand that is drawing consumer attention.
“Klaussnerhome is a value-driven brand and today more than ever that's what shoppers are looking for,” he said.
J.B. Davis said the stores allow the company to capitalize on its core competencies — its ability to produce a wide selection of custom upholstery and to provide reasonable pricing, a one-stop shopping experience and guaranteed quick delivery. The company said it averages less-than-truckload deliveries on in-line stock in seven days and custom orders within 30 days.
Klaussner also is pursuing a Klaussner Home gallery program with three levels of participation ranging from 2,000 to 10,000 square feet. The program offers point-of-purchase materials, signage and discounts on circulars.
Marketing materials featuring celebrity spokesperson Genevieve Gorder are available to operators of the larger store galleries.
As of late last year, there were about 80 Klaussner Home galleries. And since the October High Point Market, the company said it has been averaging two to three gallery openings per week.
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