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Home Depot test-markets RTA for possible chainwide rollout

By Tom Edmonds -- Furniture Today, December 16, 2001

ATLANTA — Ready-to-assemble furniture producers are waiting eagerly to see if Home Depot's furniture test will result in a chainwide rollout.The home-improvement warehouse chain, with over 1,400 stores generating some $53 billion in sales, is testing flat-pack furniture in several regions. Participating suppliers include Sauder Woodworking, O'Sullivan Furniture and others.

The slots and size of Home Depot's furniture test displays vary from region to region and from store to store. In the Midtown Atlanta warehouse, supplied exclusively by Sauder, the department was set up in a back corner on an aisle that led to the employee break room.

Four Sauder collections are on display, including one bedroom collection and several for home entertainment and home office. Prices range from $39 for a one-drawer file to $199 for a corner entertainment center or a desk-hutch combination.

Home Depot is seeking new revenue as it aims for annual sales gains of at least 15% from 2002 through 2004, with a goal of $100 billion in sales by 2005.

Although Home Depot wouldn't comment on the furniture test, the company apparently has noticed the success of its leading competitor, Lowe's, which has done well recently with its new furniture department. Lowe's offers a combination of solid wood, finished and unfinished, and traditional laminate-over-board construction, all available for purchase in boxes.

Itself a home-improvement heavyweight with more than 730 stores in 42 states and 2000 annual sales exceeding $18 billion, Lowe's is projecting annual sales growth of 18% to 20% through 2003. The company is in the midst of a $2 billion expansion, opening more than two stores every week.

Lowe's success with RTA furniture this year represents a bright spot for RTA producers, which have been wrestling with retrenchment, failure and poor performance in several retail channels.

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