Branded stores picking up steam
By Kay Anderson -- Furniture Today, November 10, 2003
High Point — While producers' branded store programs have been around for a while, there's been a renewed interest in the format lately as producers try to lock in more retail space for their wares.
In addition to a plethora of in-store gallery programs — sometimes called boutiques or stores-within-a-store, several manufacturers are undertaking or redoubling their efforts with free-standing stores dedicated to their merchandise.
The granddaddy of them all, Ethan Allen, still leads the pack in terms of number of stores and dollars generated. Neck-and-neck with Ethan Allen with nearly the same number of stores is La-Z-Boy Furniture Galleries. Bassett, which inaugurated its free-standing gallery store program in 1994 with a Bassett Direct Plus in Port Charlotte, Fla., has honed its concept and now has more than 100 stores operating under the banner.
Some newcomers are nipping at the heels of the old standbys. For example, Ashley is aggressively opening new stores — with substantial square footage — at a fast clip.
Julius Feinblum, whose real estate firm has been helping manufacturers and retailers find suitable locations for branded stores for many years, said he has seen a big increase in interest in the concept lately. One reason, he said, is that a "free-standing branded store does 50% to 100% more volume per square foot than a comparable in-store gallery."
Proof that the consumer is responding favorably to the branded-store concept, said Feinblum, can be found in the types of locations that are being chosen for new stores. Rather than being forced to go with a low-rent location that's off the beaten path because of low sales volumes, today's branded stores generate sales volumes that justify the higher rents of high-traffic locations. That, in turn, generates more volume.
He also sees a trend to a larger footprint for the branded stores.
Furniture/Today's latest gallery or manufacturer-branded store survey spotlights the programs of 14 manufacturers.
The Furniture Brands companies — Thomasville, Drexel Heritage, Lane, Henredon and Broyhill — are all embracing galleries, both in-store and free-standing, in varying degrees. Overall, FBI plans to have 400 stores dedicated exclusively to its brands by 2008.
Norwalk also plans to increase its gallery presence with its Norwalk — The Furniture Idea Store, aiming for a total of 100 units in the next few years.
New kids on the block are:
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Palliser, with stores dedicated to its EQ3 concept — 45 units are slated to be open by the end of next year.
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Kingsdown, with two stores open in areas where it has low market penetration.
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AP Inds., which hopes to open a free-standing Generations store with a partner once its just-started in-store gallery program is firmly underway.
| Acknowledgements | ||
| Research specialist Judi Fulbright also contributed to this report. | ||
Ashley Home Stores
Arcadia, Wisc.
With 102 stores at the end of 2002, Ashley has one of the fastest-growing branded-store networks. Has opened at least 13 new stores in 2003, stretching from Honolulu to Rock Hill, S.C. Some units are as large as 70,000 square feet, but the average is about 38,000. The Milwaukee Journal Sentinel has reported that the company's goal is to have 400 to 500 licensed stores around the country in the next five years.
Bassett Furniture Direct
Bassett, Va.
Michael Satterfield, Vice President of Retail and Marketing
Will have 101 BFD stores at the end of the year. Stores range from approximately 9,263 square feet to 35,000 square feet. The average is 19,151 square feet, with an average gross margin of 47% to 48%. Stores carry case goods, upholstery and decorative accessories, all ordered directly from Bassett. Approximately 52% of Bassett's total shipments go to its branded stores. Expects to add 20 to 25 new Bassett direct stores in 2004.
Broyhill Home Collection
Lenoir, N.C.
Will open its first company-owned free-standing gallery store in North Carolina in the first quarter of 2004.
Drexel Heritage
High Point, N.C.
Blain Wrench, Vice President of Store Development
Drexel Heritage, which has been extensively revamping its dedicated store program, will have 38 dedicated stores by the end of 2003 and will open 15 new stores during 2004. Stores range from about 10,000 square feet to the new prototype size of 17,500 square feet. Drexel Heritage offers three exterior store designs, each with a different regional flavor (the North, the South and the West), designed by Seaton Wilson Architects.
Ethan Allen
Danbury, Conn.
Farooq Kathwari, Chairman and CEO
As of June 30, the oldest and largest network of manufacturers' branded stores had 119 company-owned (excluding Ethan Allen Kids stores) and 190 dealer-owned stores. In the last five years, Ethan Allen has opened 78 new stores, including a number of relocations. Unveiled a new 35,000-square-foot prototype store at its spring dealer meeting. The new store is about twice the size of most of the 309 (excluding EA Kids) stores in the network. Specialty stores within the new prototype include the new Ethan Allen Kids, Home & Garden, Area Rugs, Soft Goods, Home Office and Leather. Also introduced a new product line of casual country case goods, upholstery and accents to strengthen the company's assortment of more relaxed product. Opened a 2,000-square-foot Ethan Allen Kids store in Westfarms Mall in Connecticut in August, the first of two planned to open this year as a test. The EA Kids store features children's bedroom furniture collections and baby collections, all with interchangeable coordinated soft goods and accessories.
Henredon
Morganton, N.C.
Steve McKee, Executive Vice President of Sales and Marketing
Opened its first 12,000-square-foot gallery in Houston in January in conjunction with high-end retailer Louis Shanks. A second store opened in Irvine, Calif., in July with at least two other stores planned for the San Diego and Los Angeles areas.
Lane Home Furnishings
Tupelo, Miss.
David Coke, Vice President of Business Development
Opened first U.S. store in Tupelo in July. There are three stores in Canada, one in Calgary and two in Vancouver. Plans call for opening eight stores per year, each averaging 12,000 square feet or more. They are expected to sell an average of about $300 per square foot. The typical presentation will have about 31 stationary groups, 10 motion groups, eight leather groups, 100 recliners, 12 cedar chests, eight bedrooms, five dining rooms, three youth groups, six entertainment centers and 31 occasional groups. Lane also developed a line of accessories to complement displays and provide add-on sales.
La-Z-Boy Furniture Galleries
Monroe, Mich.
Doug Collier, Vice President of Marketing
Will have 305 free-standing galleries at the end of the year (272 dealer-owned; 33 company-owned); projects a total of 404 stores by the end of 2007 (354 dealer-owned, 50 company-owned). Recliners account for slightly less than half of sales. Stores also offer both fabric and leather upholstery, occasional tables, entertainment centers, lamps, wall decor, area rugs and other accessories. The new-generation format introduced in 2001 offers an expanded selection of home accents as well as additional accent furniture from Hammary. Stores account for about 50% of La-Z-Boy shipments.
Natuzzi SoHo Gallery
High Point, N.C.
Steve Bailey, Vice President of Marketing and Retail Development
Opened a 3,300-square-foot "laboratory" store in New York in September. Designed to increase brand awareness, the store carries about 15 styles from the Pasquale Natuzzi Collezione. The merchandise mix is about 55% leather and 25% fabric, with occasional tables, area rugs and other accessories rounding out the presentation of both stationary and motion furniture. There are no plans for additional boutiques.
Kingsdown Sleep to Live
Mebane, N.C.
Tom McLean, Vice President of Marketing
Opened second retail unit in August in Durham, N.C. The standard layout will feature nine beds in about 1,500 square feet.
Norwalk - The Furniture Idea
Norwalk, Ohio
Bill Gerken, President
At the end of 2003 there will be 76 (69 independently-owned; 7 company-owned) Norwalk stores. Plans call for an additional 30 dealer-owned units over the next few years. Stores range from 3,200 square feet to 7,800 square feet, generating an average of $300 per square foot. All products are custom-ordered with a four-week delivery time. Just under half of Norwalk's shipments are sold through Norwalk - The Furniture Idea stores.
Palliser EQ3
Winnipeg, Manitoba
Peter Tielman, President, EQ3 Franchise Holding
By the end of the year, plans call for 15 EQ3 stores in the United States and Canada. Plans call for 45 free-standing units by the end of 2004. Over the next three years, Palliser plans 15 stores in Southern California. Stores will range between 8,000 and 12,000 square feet.
Roche-Bobois USA
New York, N.Y.
Michael Lerner, President
Franchised network of 27 stores, averaging 8,000 square feet, generating about $250 per square foot, with an average gross margin of 62% and five stock turns. Merchandise is high-end, primarily European contemporary in style, plus, in 12 units, Les Provinciales, a store-within-a store, offering classic French reproductions.
Thomasville Home Furnishings Stores
Thomasville, N.C.
Eric Easter, Senior Vice President of Sales and Marketing
Launched in 1988, the Thomasville Home Furnishings Stores program will have grown to 147 units by the end of 2003. The company plans to have a total of 250 U.S. stores by the end of 2007. Stores average about 13,000 square feet.
