New owner reopens 29 Krause's stores
By Clint Engel -- Furniture Today, February 10, 2002
Brea, Calif. — The new owner of Krause's Furniture has reopened 29 stores in the past two months and is beginning to stock them with a more permanent assortment of goods.
Krause's had been selling special-purchase merchandise from Lane, Stanley and other resources, along with goods it was clearing out of its own factory here. The idea was to generate income and keep the stores open while the custom upholstery manufacturer-retailer shifted to a new merchandising program, said President Martin Ploy.
"The plan was to try to have the new Krause's roll out around April 1, but we can't wait that long," he said.
Salespeople at the stores have been hampered by the inability to sell custom orders during this period, and the liquidation sales send a negative message to consumers, Ploy said.
So Krause's is removing references to liquidation from its advertising even as it winds up the clearance effort. It's also beginning to flow goods into its Krause's and Castro Convertibles stores that will remain as permanent samples on the floors.
Ploy said the company has worked out an alliance with Lane, which will supply motion upholstery, recliners and some leather to supplement Krause's upholstery lines. The program will enable Krause's to "cross-pollinate covers" between the Lane and Krause's products, he said.
The new Lane samples will be in showrooms by the end of the month.
"When we get the stores filled and displayed the way we want or when we get close to it, we're going to start running a series of teaser ads … relative to the new Krause's," Ploy said.
While the company will remain weighted heavily toward upholstery, it also will be working case goods onto the floors — probably with an emphasis on dining room over bedroom — to help the consumer experience more of an in-home atmosphere, he said.
Krause's, filed for Chapter 11 bankruptcy protection last summer, first liquidating 32 of it 89 stores, then giving up the reorganization effort and liquidating the rest late in the year.
The Hakakian Group, led by Alex Hakakian, now Krause's chief executive officer, stepped up in October, buying up certain Krause's assets in an effort to revive the chain.
The company since has reopened 16 stores in California, four in Arizona, two in Washington and the seven Castro Convertibles stores in New York. Ploy said it's looking to open another six to seven stores in Southern California over the next 45 days, topping out at about 35 or 36 stores for now.
It's also looking at the possibility of relocating its 350,000-square-foot Brea factory and offices to a smaller facility better geared to the scaled-down operation.
Earlier, the company estimated it would return as a 40-store operation with annual sale of about $85 million. Ploy said he conservatively estimates sales will be about $50 million this year.
"It's been challenging, difficult and exhilarating, and now it's starting to take some shape," Ploy said. "We're excited about where we're going."
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