Rowe will consolidate its two retail businesses
By Clint Engel -- Furniture Today, January 27, 2002
MCLEAN, Va. — The Rowe Cos. said last week it will consolidate its Home Elements and Storehouse retail chains into one Storehouse division this year, merging the best of both concepts while significantly cutting operating costs.
The 61-store group will be based in Atlanta and led by Caroline Hipple, current Storehouse president. Lorri Kelley, president of 20-store Home Elements, will move to another senior position at Rowe, said Gerald Birnbach, chairman and chief executive officer of the upholstery producer and retailer.
"This provides an exciting opportunity to leverage the strength of both brands to create and even more powerful retail concept," Birnbach said.
He said the move will maximize profitability by eliminating duplicate expenses in areas such as distribution, marketing and merchandising. Rowe estimates annual savings of more than $2.5 million.
The company expects to eliminate about 35 positions, mainly in management and distribution. No store closings are planned for now.
At least one warehouse in the Washington market will close, as will a Home Elements warehouse in Florida, where the stores will be served through Storehouse's Atlanta warehouse.
The combined company will use the Storis retail management system, now used by Storehouse, and drop the GERS system used by Home Elements.
Birnbach said he doesn't expect any major changes in the stores' suppliers. Rowe is the primary supplier to both stores.
Since the Home Elements stores are smaller — averaging about 6,000 square feet to Storehouse's 10,000 to 11,000 square feet — they will likely carry a "best of" mix and the Storehouse name with something more to further define it, he said.
He said the consolidation has begun and should be completed this fall.
Storehouse and Home Elements had combined sales last year of about $115 million, Birnbach said, down slightly from and estimated $119.7 million the year before.
| Birnbach |
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