American expanding flagship
By Clint Engel -- Furniture Today, May 19, 2003
Englewood, Colo. — American Furniture Warehouse is adding 75,000 square feet to its flagship store here, its first expansion in more than two years.
It's the beginning of a growth push that likely will lead the Top 100 store into Longmont, Colo., and possibly other new Colorado markets.
Nine-store American is building out the upper level of its 112,000-square-foot Englewood store and will fill it mainly with upscale departments and services, including premium bedding, area rugs and custom pillow and decorator services, said American President Jake Jabs.
The company also will expand its existing clearance center and move its leather upholstery upstairs in Englewood, enabling it to broaden some key displays on the lower level, including the hot microfiber category.
If all goes well, American will create a similar space at its Thornton, Colo., store in about two months, adding a two-level space of roughly 70,000 square feet to the back of the showroom.
The company also is looking to open a 100,000-square-foot store in Longmont, a booming area north of Denver that pulls consumers from both the Boulder and Broomfield areas, late this year or early next year. Also on the drawing board for expansion later are Grand Junction in western Colorado and Greeley, north of Denver.
"I think the timing is right for us," said Jabs, adding that Colorado is a strong market that is likely to get stronger as pent-up demand is released. He said it has been more than two year since American opened the 625,000-square-foot showroom, distribution center and headquarters in Englewood, and said the company is in good financial shape and has had strong business lately.
Last year, American's sales rose 4.5% to about $299 million. Jabs said sales in May were up 15% from a year earlier, and that it could be the company's first $27 million-plus month.
The Englewood expansion is "a departure for us, and I think it's a sign of the times," said Jabs, "We're bringing in higher-end merchandise. Were getting that higher-end buyer. I hear it all the time."
He said the upper level of the store largely will reflect the tastes of more affluent consumers, who are now shopping at American in more significant numbers than just a few years ago.
It will have a few leased departments, including an upscale Asian rug gallery operated by Denver retailer Carpet Exchange and departments for kitchen housewares and Chinese antiques, primarily armoires and other storage-oriented case goods.
A new, second bedding department will feature high-end product from Simmons starting at about $2,000 for a queen mattress and including adjustable latex foam, coil-on-coil, and air mattresses.
The custom pillow department will be moved out of the distribution center and into the showroom, which should build business. American also will be bringing in someone to do custom floral arrangements.
The Englewood location's small clearance center — one of two that sell off goods from all of American's stores — will be expanded to 15,000 square feet.
"I've always fought clearance centers, but I think the day has come where you're going to have to have a clearance center," Jabs said. Among other things, American will start receiving more samples from factories before it commits to buying deep, thus avoiding expensive buying mistakes. Jabs said the new clearance center will sell off the goods that don't make the cut.
Also in the new area will be a decorator chair gallery, with imported frames from Asia that are upholstered in North America by companies such as Najarian, Palliser, Corinthian and PeopLoungers. Jabs said the pieces will feature fabric SKUs from the store's existing upholstery lines.
Jabs projected that the expansion, which should be completed in about two months, could add more than a $1 million a month in sales to the store, which now does about $5.5 million a month. He estimated American's investment in the expansion at roughly $400,000.
