Labor Day sales strong
Retailers hope weekend bodes well for rest of year
By Clint Engel and Tom Edmonds -- Furniture Today, September 8, 2003
High Point — Strong Labor Day weekend sales put a nice cap on improved August business for many furniture retailers, leading some to predict that a sustained turnaround finally may have arrived.
Retailers said Labor Day weekend sales were strong to spectacular, although some had to buy part of that business with discounting and financing promotions.
And while some remain skeptical, several said the holiday weekend reflected what they think is in store for the rest of the year as well as their own efforts to improve business.
"I think the marketplace is heating up a little bit," said Keith Koenig, president of Tamarac, Fla.-based City Furniture. "I think (business) is going to get better overall and we're very aggressive with our fourth-quarter expectations."
City's business during the four-day holiday period was up 20% over last year. While the South Florida retailer beefed up its newspaper advertising, promoting its everyday low prices and an aggressive financing offer, it didn't run an actual Labor Day promotion.
Indeed, for the 13-store City, business has been good all year and picked up steam this summer, when it began marketing same-day delivery, seven days a week.
"But I think the fourth quarter is going to be stronger," Koenig said.
Whether all retailers will be in a position to enjoy the pickup is another question. Koenig said he believes some have cut back on ordering imported product, "and if you haven't bought for the fourth-quarter long before now you're not going to get it."
Outside Cleveland, Dan Geller, president of Fish Furniture, is encouraged about what's ahead, even if his store missed an opportunity on Labor Day. The two midpriced Fish stores always close on holidays to give staff time with family.
"In our marketplace, it drizzled all day Monday. It was the most ideal retail conditions you could have, and it was the first time in 10 years I regretted closing," Geller said. Nonetheless, he said, "Saturday and Sunday were excellent, and we're confident that business will continue to be strong for the rest of the year. Overall, we're just slightly down from last year's record, but not by much."
Business in August was up from last year, he added. "With the rebound in the stock market, we're seeing not only increased traffic but larger tickets, too."
In Denver and other Colorado markets, Labor Day was the single biggest single day ever for American Furniture Warehouse, which did $3.2 million at its nine stores, said Andrew Zuppa, assistant general manager.
And the retailer did it without discount or credit promotions. Instead, as usual, it tied its marketing to a Muscular Dystrophy Assn. fundraiser, pledging a percentage of gross sales during the holiday period to MDA.
For the three-day weekend event, the Englewood, Colo.-based American did $7.4 million, up about 14% from the year before, bringing a nice close to a solid August, which followed an up-and-down July.
"Colorado's economy tends to lag behind the nation's," Zuppa said, adding that the state has been hard hit in recent years by the loss of high-paying tech and communications jobs.
"But in general we feel that thing are pretty good as far as ... improving market conditions," he said. "It feels like a turnaround, and I think it's going to be a good holiday season for us."
Labor Day for R.C. Willey Home Furnishings "was absolutely excellent," said Bill Child, chairman of Salt Lake City-based chain. "We didn't exceed our numbers in Utah, but we sure did in Boise (Idaho) and Las Vegas."
R.C. Willey did a little short of $12 million on Labor Day and more than $20 million for Friday, Saturday and Monday (it's closed on Sundays) — up double digits over last year. The retailer lured consumers with specials in all departments and door-buster items.
Child said August was a turnaround month and that he thinks the holiday weekend could be a sign of what's to come. R.C. Willey's business in Las Vegas — where it recently opened a second store — and Boise have been strong all year, but its Utah stores "have been a little draggy, and I think things are looking up," he said.
In Birmingham, Ala., Stuart Shevin, president of the 15-store Standard Furniture chain, said it appears that his credit-oriented company is emerging from "three years of not-so-stellar performance." Over Labor Day, Standard ran a 50% bonus-merchandise promotion that "did very well. We were happy," Shevin said. "We're looking for an excellent fourth quarter."
Up the road and a few rungs up the price ladder, Tim Harris, president of Knoxville Wholesale Furniture in Knoxville, Tenn., said the Labor Day weekend represented the middle of a three-week promotion.
"We started this storewide event 10 days before Labor Day, and it looks like we're going to have our biggest three weeks back-to-back-to-back," Harris said.
He added that consumers are still shopping as hard as ever before making a decision.
"The feedback we're getting from the salespeople is that value is king," he said. "The consumer is more informed than ever. Name brands are still important, but not always as much as they once were. Name alone is not going to carry you if you don't have the value."
Atlanta-based Havertys reported record sales in August, and "the important Labor Day weekend generated excellent traffic and store activity," said President and CEO Clarence Smith. "The pulse of our business has taken a positive turn in the last few months."
Los Angles-based McMahan's, meanwhile, saw a strong 20% increase in holiday weekend business "but we had to discount heavily to get it," said Taylor Ganz, vice president.
"On the whole, business in August was considerably stronger than July," Ganz said, but he doesn't want to read too much into it because there's still a lot of uncertainty in McMahan's markets — particularly in California, with the recall election only weeks away, and in Oregon, where unemployment remains high.
With strong traffic and sales, the promotional Furniture Express chain in Michigan enjoyed a 50% increase in same-store sales compared with Labor Day weekend 2002. That might reflect how "rough" 2002 was as much as how strong this holiday turned out, said Jim Klein, vice president of the 10-store room-package specialist. He was pleased with Labor Day, but not yet ready to announce a turnaround.
"Give us two to three weeks and then we can tell you about the third and fourth quarters," he said. "One weekend doesn't tell you anything, especially because there's been no rhyme or reason."
