Havertys expanding
Will acquire 7 ex-HomeLife units
By Clint Engel -- Furniture Today, December 2, 2001
ATLANTA — Havertys is set to acquire seven former HomeLife Furniture stores, and will move into two new markets next year as part of its most aggressive expansion plan in years.
With the HomeLife acquisition, The 104-store, Top 100 company will enter Orlando, Fla., and the northern Virginia suburbs of Washington, with two stores in each market. In the greater Tampa market, Havertys will open its first Clearwater, Fla., store.
It will replace stores in Pensacola, Fla., and Richmond, Va., with the HomeLife units it is acquiring.
Havertys expects to reopen all seven of the HomeLife stores during the third and fourth quarter of next year, moves expected to boost sales by about $12 million next year and about $42 million in 2003, said Jay Slater, president and chief executive officer.
In addition, the company will open another metro Atlanta store — a former Roberds unit — in Fayetteville, Ga., in February and relocate one of its Dallas/Fort Worth stores to a better site in Arlington, Texas.
All told, the company plans to open a net six stores in 2002, increasing selling space by about 204,000 square feet, or 5.8%.
"In a really tough year for the industry, we've had a pretty good year," Slater said, noting Havertys expects to finish with its third-best year in history. "We wanted to be opportunistic. If we could pick up anything that made sense to us and it was below market price, we wanted to do it."
The HomeLife properties fit that bill, he said. Havertys, which plans to buy four of the HomeLife stores for $11 million and lease three, had been looking at entering Orlando for several years, but it was expensive. HomeLife's bankruptcy and liquidation offered a solution.
Slater, who has visited both of the HomeLife stores in Orlando, said they are well located and, with a little upfitting, will look like standard Havertys stores.
"We're very profitable (in Florida)," he said. "We have the capability to handle more volume, so we're very excited. This is our foot into the Orlando market."
Havertys is equally excited about pushing into northern Virginia, a market which Slater said has demographics that fit Havertys' upscale consumer profile better than any market in which it currently operates.
The replacement store in Pensacola also is coming at a good time, he said, noting that Havertys currently is located in a shopping center where the primary anchor, Wal-Mart, is vacating.
In Richmond, Havertys will be replacing a store that Slater's father opened in 1959. The neighborhood has changed since then, but the new store will put the retailer "right where we want to be."
Some HomeLife stores the company is acquiring are smaller than the 35,000-square-foot or larger footprint it typically looks for. However, Slater said some well-received new display techniques will enable the retailer to display in roughly 22,000 square feet what it typically features in a 35,000-square-foot store.
Havertys, which should post sales in excess of $665 million this year, reported that November sales have been encouraging, running about 4% head of forecasts. Total sales for the month are now expected to increase about 5%, with same-store sales slightly down.
The retailer plans about $35 million in capital expenditures next year for, among other things, improvements to the leased HomeLife stores, the two new non-HomeLife stores, and new distribution infrastructure work. The latter includes consolidation of the Atlanta and Charlotte, N.C., regional warehouses into a new distribution center in Braselton, Ga.
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