From waterbeds to full-line powerhouse
By David Perry -- Furniture Today, March 3, 2002
Two lonely waterbeds in the vast bedding assortment at the newest City Furniture store in Fort Lauderdale, Fla., tell a fascinating story.
Waterbeds launched the intertwined retail careers of Kevin and Keith Koenig, brothers who built their fledgling Waterbed City retail chain into a South Florida powerhouse in the 1970s and 1980s.
But when the waterbed boom lost its water, the Koenigs moved into a different stream … the mainstream. That meant embracing products that used to be anathema to waterbed guys: dead beds, in waterbed parlance.
In 1990 the Koenigs introduced innerspring bedding in their stores and applied the same marketing savvy to that category that they had previously lavished only on waterbeds.
The results, not surprisingly, have been spectacular.
A visit to the massive new showroom/warehouse/headquarters facility here tells the story in dramatic fashion. The bedding department stretches along a long wall that has been transformed into a colorful mural of Florida scenes. Upbeat music greets bedding shoppers.
And almost 30 beds are arranged in rows, virtually all of them in queen and king sizes. Only two are waterbeds.
The Koenigs weren't afraid to jump into the innerspring category in a big way. They put together a strong lineup, bringing in the biggest innerspring brands: Sealy, Serta and Simmons. King Koil rounds out the assortment.
At the company's newest store, the Sealy lineup starts at $399 in queen, and then hits price points up to $1,299. Serta starts at $299, and then targets four other price points up to $1,299. Simmons bedding targets six price points from $399 to $1,499. The King Koil models retail at prices ranging from $299 to $799.
The soft-sided waterbeds, by Halcyon, retail at $599 and $799 in queen.
The pricing strategy is, obviously, aggressive.
"We are focusing on having great values," said Keith Koenig. "We want to sell a lot of what we have." And they do just that.
The value story keeps the company promoting at sharp and popular price points. Only a couple of beds, for example, break the $1,000 barrier. That's by design.
"If we have 30 bedding slots, and if too many of them are above where most people want to buy, there is a risk that we won't communicate what they want to buy," Keith Koenig said.
The bedding at City Furniture is neatly arranged. Some of the beds are shown with headboards; some are not. The beds are grouped by vendor and are largely positioned by price. That makes it easy for salespeople to introduce the various lines and to quickly move from one vendor's line to another, seeking to match a consumer's interests with the beds offered.
Like a number of bedding-savvy retailers, City Furniture focuses on the larger sizes of bedding. Displaying queen and king sizes helps sell more king and queen sizes.
And the retailer houses its bedding department near the front of its newest store, so consumers will quickly encounter it as they pass through the store.
The transformation of Waterbed City to City Furniture marked the Koenigs as unique talents, ranking them among a handful of retailers who have been able to successfully make a change of that magnitude.
Their vendors hail them as among the very best merchants in the country. The Koenigs were honored as Furniture/Today's Retailers of the Year in 2001, shortly after Kevin Koenig's unexpected death.
In accepting the award, Keith recalled his brother's "vision and leadership" and said he "left a fine team" in place.
That team of talented, enthusiastic City Furniture employees is charging ahead in bedding, the category that helped launch the company on its remarkable journey 30 years ago.
| At the newest City Furniture store in Fort Lauderdale, bedding is arranged in long rows. Virtually all of the bedding is displayed in queen and king sizes. |
| Keith Koenig sits on a high-end Sealy Posturepedic model in the City Furniture bedding department. |
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