American builds a city
Expansion brings urban scene inside
By Brian Carroll -- Furniture Today, March 28, 2004
ENGLEWOOD, Colo. — ENGLEWOOD, Colo. — American Furniture Warehouse christened an 84,000-square-foot expansion to its retail showroom and warehouse center here this month, pushing total retail space at the location to nearly 200,000 square feet.
A new second floor features a faux city park, replete with 23-foot-wide reflecting pool and fountain, downtown Denver loft-style brick walls, acid-washed floors, a full-service espresso bar and extensive product assortments in bedding, microfiber upholstery, rattan, outdoor furniture, pool tables and tabletop, among other home furnishings categories.
"It's an important location for us," said Jake Jabs, chief executive officer of the nine-store chain. "We did searches and surveys by helicopter and this was the only 40-acre parcel left (in greater Denver) with good highway access and visibility."
Because of the Englewood location's proximity to a new outer loop around Denver, I-470, as well as to the main Denver-Colorado Springs-Pueblo connector, I-25, the $30 million, 684,000-square-foot facility serves as a distribution hub for nearby Aurora, as well as American's stores in Colorado Springs and Pueblo south of Denver.
Fueling growth
The retail expansion is expected to add approximately $1 million in monthly sales to Englewood's $5 million per month total. American's flagship Thornton store leads the chain with $7 million in monthly sales. American Furniture Warehouse generated a total of $305 million in sales in 2003, or 2% over 2002's $299 million, according to Jabs. So far this year, sales are running about 10% ahead of 2003.
The expansion project cost approximately $1 million, including $100,000 for the contemporary waterfall fountain and $30,000 for landscaping. Jabs cites the figures with a blend of pride and consternation, not unlike a father calculating the cost of a daughter's wedding.
"I don't know what I was thinking," he said.
The goal for the expansion was to create an urban, downtown Denver feel, but in a space that is flexible.
"There are no walls," said Judy LaMontagne, American's accessory buyer and the designer of the new second floor here. "If Jake wants it all to be different in six months, we can switch it all out. Any of the pods can change whenever we need."
The expansion also features a clearance center, something Jabs previously had been reluctant to include.
"It's a home run," Jabs said. "I don't understand it, but people love it."
Self-service kiosks
Prominent in the new space is a bedding assortment supported by the first of what will soon become common in American stores — self-service kiosks. The database-driven kiosk guides consumers through three price levels of bedding, including the Sealy, Summit and Therapedic brands, and provides thermal printer readouts of selections and specifications.
"We started with mattresses because we felt it was the hardest (category) to sell," said Andrew Zuppa, assistant general manager.
"We picked the top and will move down from there. RTA should be completely self-service in the next few months."
Zuppa said American wants to increasingly migrate information and transactions online and onto kiosks to provide customers with a more consistently good experience.
"If my Mom comes in and she gets one of our 50 best salespeople and yours comes in and gets our 330th, our worst, have they even visited the same store?" Zuppa said.
"How different are those two experiences? The kiosks can take out some of that variability."
Leasing opportunities
The expansion also features spaces leased to third parties, including a Corian countertop center, a hot tub and spa area, espresso bar and carpet exchange. At $25 per square foot per month and a total lease space of 20,000 square feet, or a fourth of the floor, rents will contribute more than $500,000 per month to American's top line.
Easy access to Interstate 470 and I-25 helps the Englewood location make an average of 800 deliveries per day, Jabs said. In addition, five or six trucks deliver to Colorado Springs every day.
"We start loading at 5 a.m. every day," Jabs said. "We've got our own mechanics, our own truck parts, our own fueling station."
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