Ottawa — A strong group of six national and regional Canadian furniture retailers are poised to challenge the Top 10 for the hearts and dollars of the consumer.
Leading the group is Furniture Plus, the primary banner of the Cantrex Group, whose 44 stores generated C$163 million in furniture and bedding sales last year. Its largest member is 10-store, Winnipeg, Manitoba-based Dufresne Furniture & Appliances, which doesn't use the Furniture Plus name but floors the banner's core lineup.
This year, Furniture Plus plans to add five stores to the network.
The banner's growth was hampered to some degree by the uncertainty at Cantrex. After firing the buying group's senior managers early last year, parent Transamerica Commercial Finance (Canada), which acquired Cantrex in 1998, became an acquisition target itself. Now that GE Commercial Distribution Finance is Cantrex's owner, senior management intends to forge new growth plans.
The Bay's furniture and bedding volume is a small part of parent Hudson's Bay Co.'s overall business. But a new merchandising strategy, called HBC Home, calls for sales increases in big-ticket categories to C$430 million by 2008, one of the most ambitious growth targets in the industry.
The plan will see furniture, bedding, appliances and electronics sold in every The Bay department store across the country, and HBC Home also will be introduced in Zellers discount stores in non-competing markets. A key element is a new focus on brands such as Gluckstein Home and on a new offering created by Lynda Reeves, publisher of Canadian House & Home magazine.
Pier 1 Imports has been building a following in Canada for the past several years as a mall-based merchandiser of midrange imported home furnishings and related items, and is poised to become one of the few truly national furniture retailers. New stores will be opened this year in Quebec, Newfoundland, New Brunswick, Manitoba and Alberta. Last year, Pier 1 boosted furniture sales 18.2% to C$104 million.
With a 55.4% surge in sales to C$101 million in 2003, La-Z-Boy Furniture Galleries is the growth leader among large Canadian furniture retailers. Growth is being driven by advances in same-store sales, which will continue as the underlying strategy since only two stores are expected to come on line this year.
As with its American cousin, La-Z-Boy enjoys huge top-of-mind brand awareness with Canadian consumers. In addition to its dedicated store network, La-Z-Boy has a growing network of in-store galleries, and does substantial business through such Top 10 powerhouses as The Brick and Leon's.
Specialty retailer The Bombay Company was another growth leader in 2003. It's C$97 million in furniture sales was 19.8% higher than the previous year's C$81 million. It opened four stores in 2003, boosting its network to 56 across the country.
Like Pier 1, Bombay's Canadian stores are not markedly different from their U.S. counterparts in either product or market positioning. Furniture accounts for 45% of revenue.
Bombay, like HBC, sells on its Web site and via catalogs, channels that have yet to be widely tapped by most of the contenders. And the company has debuted its BombayKIDS banner north of the border.
Countrywide Stores, the primary furniture, bedding, appliance and electronics brand of Mega Group in English Canada, has converted itself from a traditional buying group banner to a disciplined franchise. The move cost them members but with seven new stores slated to join the network this year, it should be back on a growth track.
Several other Canadian retailers are worth watching. Among them are:
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The already-mentioned Dufresne Furniture & Appliances. The family-owned and operated chain is becoming a strong player in western Canada. In addition to its Dufresne stores, it operates the Winnipeg La-Z-Boy Furniture Galleries. A couple of years ago, Dufresne signed a service agreement with North West Co., becoming their furniture retailing partner and giving Dufresne a client base that ranges throughout the Arctic.
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Mobilia. This specialist in upper midrange to high-end contemporary furniture has been growing in the Montreal-Toronto-Ottawa triangle for several years. In addition to its Mobilia stores, it operates at least five Thomasville stores. This year it will add an 11th Mobilia store in Burlington, Ontario.
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Tepperman's Furniture. With five stores, Tepperman's dominates the southwestern Ontario market.
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Finesse Furnishings. This Edmonton, Alberta, retailer has just opened what may be one of the largest furniture showrooms in Canada, and has ambitious plans to expand into other markets, notably Montreal.
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EQ3. Furniture maker Palliser launched this independently owned and operated network focused on affordable contemporary furniture and furnishings about three years ago. In addition to about 150 in-store galleries, EQ3 now has 15 freestanding stores in Canada and the United States, with several slated to come online this year, including units in Ottawa and Peterborough, Ontario.
| Canadian retailers to watch | |||||
|---|---|---|---|---|---|
| Estimated Canadian furniture and bedding sales Sales in C$ millions | Percent change | Number of units selling furniture and bedding | |||
| Company, home base, Web address, notes | 2003 | 2002 | 2002 to 2003 | 2003 | 2002 |
| All sales information, except for that supplied by publicly held companies that break out furniture and bedding sales, are Furniture/Today market research estimates. All data for calendar 2003 and 2002 unless otherwise noted. All dollar figures are in millions of current Canadian dollars. All figures are rounded. Source: Furniture/Today market research |
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| Furniture Plus | C$163 | C$161 | 0.9% | 44 | 45 |
| Mississauga, Ontario | Total revenues: $204 | ||||
| Cantrex Group's largest banner for independently owned and operated full-line furniture stores in the tertiary markets of Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia. Plans to add five stores this year. Its largest member is Dufresne Furniture & Appliances of Winnipeg, Manitoba, a 10-unit, family-owned chain that carries much of the core merchandise but doesn't use the Furniture Plus name. Another multi-store member is Lounsbury & Co. of Moncton, New Brunswick. | |||||
| The Bay | $160 | $170 | -5.9% | 100 | 100 |
| Toronto, www.hbc.com | Total revenues: $7,200 | ||||
| The department store brand of Hudson's Bay Co., which also owns the 300-store discounter Zellers and the 40-unit bed, bath and décor specialist Home Outfitters. Launching HBC Home, a vehicle for furniture, appliances, bedding and electronics sales with store-within-a-store installations in all Bay department stores and selected Zellers stores in non-competing markets. Big-ticket items will be made available through every channel of distribution. Also moving to a new everyday-low-price strategy called Every Day Bay Value. Will launch furniture brands from Toronto-based designer Brian Gluckstein and TV personality/magazine publisher Lynda Reeves of Canadian House & Home. Will realign bedding and furniture assortments across HBC by the end of the year, and plans to increase offerings of offshore goods by direct sourcing. Forecasting incremental sales growth in big-ticket categories of C$60 million in 2004. | |||||
| Pier 1 Imports | $104 | $88 | 18.2% | 68 | 60 |
| Fort Worth, Texas, www.pier1.com | Total revenues: $140 | ||||
| Canadian subsidiary of the Top 100, publicly held specialist in imported midpriced home furnishings and related merchandise. By October 2004, plans to open 13 stores, seven in Ontario, two in Quebec and one each in Newfoundland, New Brunswick, Manitoba and Alberta. Will relocate three stores this year: the unit in the Beaches district of Toronto and stores in Kitchener and London, Ontario. Merchandising initiatives for 2004 include the introduction of back-to-college promotions to replace clearance events. | |||||
| La-Z-Boy Canada | $101 | $65 | 55.4% | 22 | 20 |
| Waterloo, Ontario, www.la-z-boy.com | |||||
| The figures are for La-Z-Boy Furniture Galleries stores only, the Canadian arm of U.S.-based La-Z-Boy Residential's network of independently owned and operated stores featuring La-Z-Boy upholstery, Hammary occasional tables and Kincaid case goods in the midrange to lower-high-end price points. In 2003, opened stores in Nanaimo, British Columbia, and Barrie, Ontario, both in the New Generation format. Winnipeg licensee expanded and converted to the new format in 2003. In 2004, stores in Calgary and Edmonton, Alberta, and Mississauga and Brampton, Ontario, will be converted, with two new stores to open, in Windsor, Ontario, and Red Deer, Alberta. Five of the stores also operate Kincaid galleries. La-Z-Boy does substantial addition volume through in-store galleries and major accounts at such Top 10 retailers as The Brick and Leon's. | |||||
| The Bombay Company | $97 | $81 | 19.8% | 56 | 52 |
| Fort Worth, Texas, www.bombay.ca | |||||
| Fiscal years ended Jan. 31 and Feb. 1. The Canadian subsidiary of the Top 100 U.S. retailer, with stores in nine provinces. Furniture, primarily ready-to-assemble occasional, and larger bedroom, living room, dining room and home office pieces, accounts for 45% of sales. Also sells through Canadian versions of its catalog and Web site. Market position and merchandise lineup much like its U.S. operation. | |||||
| Countrywide Stores | $79 | $74 | 6.8% | 45 | 40 |
| Saskatoon, Saskatchewan, www.countrywidestores.com | Total revenues: $1,120 | ||||
| The primary banner for Mega Group in English Canada has completed its transformation from a traditional banner to a franchise system. The move saw a drop in total store numbers. At one time the banner had 64 stores. Seven new stores are slated to join the network this year. Located mainly in secondary and tertiary markets, each store is independently owned and operated, and sells midpriced appliances and electronics in addtion to furniture and bedding. | |||||
