Levitz-Seaman's may add 18 HomeLifes
By Clint Engel -- Furniture Today, February 10, 2002
Woodbury, N.Y. — Levitz Home Furnishings Inc. will take over as many as 18 former HomeLife Furniture leases in an aggressive expansion of Levitz and possibly Seaman's in existing markets.
In California, the company plans to take 10 leases for Levitz stores — eight in the Los Angeles market and two in the greater San Francisco Bay area. It also plans to fill in territory for Levitz in Washington and Arizona.
In the Philadelphia area, the company will add as many as six locations, possibly for both the Seaman's and Levitz chains.
In a related move, Seaman's will exit Ohio with the sale of its eight stores there to Top 100 player Sofa Express.
"We're really excited about this opportunity," said Alan Rosenberg, president and chief executive officer of LHFI, parent of 58-store Seaman's and 58-store Levitz. The promotional to midpriced chains merged under common ownership early last year.
"It gives us the opportunity to put density in each of our markets for the advertising we're already doing," Rosenberg said. "These are (markets with) established distribution patterns with no additional expenses in advertising or distribution beyond the normal trading areas.
"They're good locations and solid, beautiful stores that require very little capital."
He said the former HomeLife stores are all eight years old or younger and all designed for furniture retailing. At 35,000 to 50,000 square feet, the showrooms fit the typical Levitz and Seaman's footprints.
HomeLife Furniture, a former Top 100 company, filed for Chapter 11 bankruptcy last year and closed its stores. LHFI was still finalizing details on about three properties, but Rosenberg said the company expects to wind up with most or all of the 18 stores. "We believe we'll start opening them as early as April," he said.
Some will replace older stores, and it's not clear yet how many units the company will end up with at year's end. In Los Angeles, for example, where Levitz operates 16 stores and will gain eight HomeLife locations, it expects to grow by a net four stores with the deal. In addition, it is opening one new store in Ontario, Calif., later this month, which should give Levitz 21 stores in the LA market.
The four other Western stores will add to the overall store count. In the Bay Area, Levitz will add a store in San Jose and one in Haywood for a total of 12 units. It will gain one each in Bellevue, Wash., and Scottsdale, Ariz., for a total of four Levitz stores in greater Seattle and six in greater Phoenix.
Rosenberg said the company is still working out details on the Philadelphia market — where Seaman's has seven stores and Levitz has five — and couldn't say how many, if any, of the six HomeLifes will be relocations nor how many will go to each chain.
"The stores they are acquiring on the West Coast will tremendously enhance their position in the marketplace. They are perfect fill-ins to existing Levitz stores," said Julius Feinblum, president of Julius M. Feinblum Real Estate, which acted as a consultant to all parties and helped broker the real estate deals.
The same goes for Philadelphia, where the company can build on its strong penetration, he said.
The LHFI deal is the second big growth plan announced for the Philadelphia market in recent weeks. Top 100 company Raymour & Flanigan of Liverpool, N.Y., said it will open a net nine stores this year, including five in greater Philadelphia.
"Raymour has grown dramatically and is probably the leader in sales (in Philadelphia)," said Rosenberg. "This gives us more leverage to be able to compete."
Rosenberg would not disclose the cost of the expansion plan.
After years of losses, Levitz emerged early last year from Chapter 11 bankruptcy protection, linked to Seaman's under the new LHFI company. LHFI is chaired by James Rubin, co-chairman of Resurgence Asset Management, the largest shareholder in LHFI.
Rosenberg wouldn't disclose sales results and projections nor whether Levitz is profitable yet. (Furniture/Today estimates that the combined Levitz and Seaman's generated sales of about $900 million last year.)
He did say that business has been trending upward for Seaman's since October and for Levitz since December.
"We're excited about the changes we see happening," he said.
Since the merger, LHFI has opened a 1 million-square-foot distribution center in Robbinsville, N.J., that serves most of the company's East Coast stores.
In the Los Angeles area, the company is looking to open a 600,000- to 800,000-square-foot central distribution center to replace five smaller facilities. Rosenberg said the company hopes to open it during the next fiscal year, which starts in April.
As for the decision to leave Ohio, Rosenberg said Sofa Express approached the company a number of months ago — at the same time that LHFI was evaluating its own growth plan.
"With our attention really tied to the coasts, it became difficult to operate or pay attention to markets that were not contiguous or dense (with stores)," he said. "This opportunity came along and we pursued it."
Seaman's will transition out of the stores — five in Cleveland, two in Akron and one in Canton — with liquidation sales over the next 45 to 60 days, he said.
| Rosenberg |
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