Furniture Outlets USA buys former Target store
Now using it as liquidation center
Clint Engel -- Furniture Today, February 27, 2009
ELK RIVER, Minn. — Furniture Outlets USA has opened a furniture liquidation center here in a former Target store, which the company eventually will convert to a full-line showroom.
The Top 100 company paid $3.4 million for the nearly 90,000-square-foot building in a shopping center that includes Cub Foods and other non-furniture retailers, said Gordy Wallenstein, president of Sioux Falls, S.D.-based Furniture Outlets USA, which now has 28 stores in the Dakotas, Minnesota and Iowa.
Wallenstein said the company will run the store for now as a liquidation center for special purchases, discontinued items, one-of-a-kind pieces and slightly damaged goods. That will help the retailer clean up distribution center inventory. The new location also is likely to be used for further clearance of showroom furniture "that may be getting a little aged or shopworn," he said.
Wallenstein said he expects that later this year, the company will begin a staged conversion of the former Target to a Furniture Outlets USA store. He roughly estimates the company will invest another $700,000 for store improvements by the time the work is completed. He declined to project sales for the new store.
Furniture Outlets' nearest store to this Northwest suburb of the Twin Cities is one of its 10 Ashley Furniture HomeStores, about 20 minutes away.
There are competitors nearby, including Becker Home Center and Furniture and Things, but Wallenstein said, "With our format and pricing structure and our aggressive business model, we'll do just fine."
Key suppliers include Ashley, England, Trade Masters, Lifestyle Enterprise, Intercon, Jofran, Albany, Trendwood, Best Cos., Sealy and Restonic.
Wallenstein characterized business as "decent," though down from a few years ago. In addition to the weak economic climate, Furniture Outlets and its competitors in the area have had to contend with a brutal winter storm season that has shut several stores during important weekends. Some areas of North Dakota saw more than 30 inches of snow in January, he said.
That aside, Wallenstein said real estate opportunities right now are great, noting that the Target building previously would have sold for much more.
Wallenstein estimated business last year was down about 10% from 2007, when Furniture Outlets USA was No. 59 on Furniture/Today's Top 100 survey of U.S. furniture stores with estimated furniture, bedding and accessories sales of $118.8 million.
"It's a challenging time out there, but we'll weather the storm," he said. "Like that old saying goes - what doesn't kill you will make you stronger."
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Furniture Outlets USA sets up liquidation center
Mar 16, 2009
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