Hobby Lobby owner eyes big home furnishings chain
By Clint Engel -- Furniture Today, March 2, 2003
Oklahoma City — The founder of Hobby Lobby, a 312-store, $1.2 billion crafts retailer, has opened three upscale Hemispheres home furnishings stores and plans to develop the chain into another billion-dollar nationwide business.
David Green, president, owner and chief executive officer of Oklahoma City-based Hobby Lobby, opened the first Hemispheres here in September 2001, followed in October 2002 by units in the Dallas suburb of Plano and the St. Louis suburb of Kirkwood, Mo.
This year, two more Hemispheres are expected to open — in Lewisville, Texas, north of Dallas in May and at a yet-to-be-disclosed location by September.
The stores to date have been about 60,000 square feet and offer a wide variety of upper-middle to lower-high-end furniture. The mix is heavy on imported, upscale case goods and includes a vast assortment of home accents, including lamps, wall art, mirrors and area rugs shown in both room vignettes and large mass displays.
The new stores will be about 80,000 square feet, said Mike Holcomb, who buys case goods and all imported product for Hemispheres.
Green wouldn't disclose current sales for Hemispheres, but said he expects each store eventually will generate $10 million a year, and that the first three could be profitable this year. The first store's sales are running 25% ahead of its first full year in business, he said.
"We don't want to call them furniture stores. We're calling (them) fine furnishings," said Green. Hemispheres aims to become a one-stop store for all home furnishings, he said.
"We hope to create a billion-dollar company (with Hemispheres)," he said. "Obviously it will take a few years, but we've been there, done that (with Hobby Lobby). We think we can do it again.... We have the financial ability to do what it takes to get where we need to go."
Holcomb has worked with Green for 18 years and has traveled the world for Hobby Lobby's more than 60,000 SKUs of arts and crafts supplies, fabrics, furniture and other items. With Hemispheres, the company is looking to step up the price points and quality of the home furnishing offering, Holcomb said.
Hobby Lobby sells mostly promotional and accent pieces such as bakers racks, plant stands and tables. Hemispheres sells sofas starting at about $1,000, nine-piece dining rooms at about $3,500 or more, bedspreads for as much as $5,000 and decorative pillows from $50 to $400.
More than half of Hemispheres' assortment is furniture, compared to less than 5% at Hobby Lobby. Furniture is arranged in accessorized room vignettes in the center of the stores. Around the perimeter are mass displays arranged by departments, including long racks of lighting, wall art, furniture and mirrors.
The emphasis is on wide selection and traditional and transitional styles, or what one vendor describes as "global traditional," with influences ranging from European to Eastern. The mix includes 800 SKUs of wall decor and 480 SKUs of lighting. As Holcomb put it, "We've got stuff."
Green said the company also is doing strong business in outdoor furniture, fountains and other garden merchandise.
Key furniture suppliers include AICO, Lane, Schnadig, Old Hickory Tannery, Key City, Councill Craftsmen and Legacy Leather International. While most case goods are imported, upholstery primarily comes from the United States and Canada, Holcomb said.
The stores stock nearly all merchandise or sell off the floor for immediate pickup or delivery within a few days. Stores have warehouse space and are backed up by Hobby Lobby's 1.7 million-square-foot distribution center and home office complex, part of which is set aside for a deep inventory of imported case goods.
Hemisphere's advertising is concentrated in local newspapers, with some TV. The focus is on legitimate percentage-off sales on rotating categories, said Jason Cooper, upholstery buyer for the company.
Green said the company's overseas sourcing and buying power, extended from Hobby Lobby, has enabled it to offer strong home furnishings values.
"We feel we can pretty much go national," Holcomb said. "With all the Kmarts (that are closing) and all these people going out of business right now, there are a lot of large boxes we can take advantage of." The Kirkwood store is a former Kmart.
Green said Hemispheres likely will roll out two to three more stores next year. Hobby Lobby, meanwhile, is opening about 25 new stores a year. As Hemispheres grows, the rollout speed likely will increase. "We'll have more experience under our belts and a better feel for what works and what doesn't work," he said.
Martin Ploy, vice president of sales and marketing for AICO, thinks Hemispheres has a pretty good grasp on what works already. "They have a keen sense of commitment to a niche market," he said. "They're great to work with, they're fair, and they're very dynamic in their presentation. I think they're going to be a very, very quick-growing retailer."
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