Palliser rolls out its stores
By Michael J. Knell -- Furniture Today, November 4, 2001
WINNIPEG, Manitoba — Palliser has rolled out its long-awaited retail concepts, cutting the ribbon on its flagship Palliser Rooms and EQ3 franchise stores in the heart of this city's furniture shopping district.
"Our established position in the marketplace and the brand recognition of the Palliser name here in Canada have provided a strong base for this initiative," said Art DeFehr, president of Canada's largest producer of assembled household furniture.
Leading both initiatives will be Michael McMullen, recently named to the new position of vice president of retail operations.
"The potential for both franchises is huge," McMullen said. "Palliser is targeting two groups of consumers who are largely ignored by other furniture retailers. There's the need for high value, sophisticated styling and affordability that Palliser Rooms fills and the need for furnishings for the 18- to 35-year-old market that EQ3 addresses."
For both EQ3 and Palliser Rooms, this Winnipeg store will be a testing ground for new product and merchandising concepts.
Palliser says EQ3 is its foray into democratic design — furniture for a customer that loves high design but usually can't afford it. The collection is presented in its own 5,300-square-foot boutique attached to the Palliser Rooms store.
While it's new to consumers, Palliser has been aggressively promoting EQ3 to retailers at both of this year's High Point markets.
"The response has been very positive," said Peter Tielmann, vice president of marketing and sales. "Within the next year, EQ3 galleries will be appearing in select furniture stores in Canada, the United States and even in Central and South America."
Palliser has created an EQ3 division with a management team blending seasoned retailers with Palliser's experience as a manufacturer. Ikea veteran Christina Petersson has been named EQ3 product manager.
"Function and style are important in EQ3," Petersson said. "A single piece of furniture is designed so that it can be used in more than one way. For instance, the basic B2C shelf unit stands vertically as a bookcase or horizontally as a sideboard. The look is clean and uncluttered."
The flagship EQ3 store's unusual architectural features include a 150-foot-long catwalk.
"It's one of the most original retail environments I've seen in a long time," McMullen said, describing the motif as urban industrial. "It has a lot of external architectural elements that really highlight the product. And is also a very interactive environment."
While some freestanding EQ3 stores are planned, the concept was primarily designed as an in-store gallery. "This store is about the twice the size of our largest (in-store) EQ3 boutique," McMullen said.
Currently, McMullen is managing the EQ3 store and Palliser employees are staffing it. Eventually, they'll either return to the manufacturing side or become part of the team that will develop other stores and train their personnel.
The Palliser Rooms store, which opened in June, has generated sales at twice the original forecast, the company said.
Palliser Rooms targets the 30- to 50-year-old consumer who wants well-designed, fashionable furnishings at affordable prices. They also want contemporary looks and aren't likely to shop Palliser's existing dealers, who tend to focus on more traditional offerings.
"This store allows the customer to see a lifestyle that's on the taste edge, that is less traditional," McMullen said.
The 20,000-square-foot store showcases Palliser product in accessorized room groups including upholstery, master bedroom, casual dining, home entertainment, home office and juvenile furniture.
While pleased with the store's performance, McMullen said that about 50% of its product mix has been overhauled in the past four weeks. In addition to expanding the network of stores, the next critical task is product development. Soon, between 25% and 40% of the product sold at Palliser Rooms stores will be exclusive to the chain.
"That will be absolutely fundamental to our success," he said.
Dufresne Furniture and Appliances is Palliser's first franchise partner.
"This retail format has allowed us access to a whole new customer that we previously did not appeal to," said Mark Dufresne, chief executive officer.
Tielmann said Palliser intends to roll out five more Palliser Rooms stores next year with 10 to follow in 2003. The target is 50 in the next five years.
Dufresne is expected to open a second Palliser Rooms store in Calgary, Alberta. The first in Ontario will open next year in the Stoney Creek Design Centre, owned by Dennis Novosel, president of Stoney Creek Furniture.
Meanwhile, several EQ3 galleries will open in the coming months, including ones at Eatons in Toronto and Vancouver and Sears Canada in Victoria, British Columbia.
Art Van is expected to open a 5,000-square-foot freestanding EQ3 store in the Detroit area, and galleries are set for Jordan's in the Boston area, Nebraska Furniture Mart in Omaha, and four at El Dorado stores in south Florida.
| Art DeFehr, left, of Palliser, Tara DeFehr-Tielmann and Shaun Dufresne of Dufresne Furniture & Appliances cut the ribbon to officially open the first Palliser Rooms and EQ3 stores. |
| Palliser Rooms makes a more contemporary style statement than most traditional Canadian furniture stores. |
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