United paring down
Retailer to close as many as 28 U.S. units
By Michael J. Knell -- Furniture Today, February 3, 2003
Vancouver, British Columbia — United Furniture Warehouse will close as many as 28 of its 56 stores in the western United States over the next few weeks, victims of poor economic conditions and ill-chosen locations.
John Volken, president of the promotional retailer, said UFW will exit Utah and retrench in Idaho, Oregon and Washington.
"We're closing about half our stores in the United States," he said. "We'll end up with about 25 stores, although it could be as many as 35 if we're successful at renegotiating our leases."
UFW is the only Canada-based furniture retailer with a significant presence in the United States. The privately held company has about 100 stores in Canada, from British Columbia in the west to Ontario in the east, operating under the UFW banner.
Currently ranked as Canada's sixth-largest furniture and bedding retailer, UFW had estimated sales of C$201 million in 2001. It doesn't sell household appliances or electronics.
Volken sees the closings as a temporary setback.
"We have been very successful in the United States," he said. "It seems that every store made money initially but, frankly, Utah has turned into a disaster for us. Everyone has really suffered. So we decided to close a lot of our marginal stores."
In addition to the problems presented by a tough economy, Volken said UFW had opened stores in markets that were too small to sustain them. One problem in those locations was finding and retaining store management, he said, since the stores didn't generate the gross-margin dollars needed to pay adequate compensation.
Volken said between 80 and 100 employees will be let go, with a few transferred to stores that will remain open.
He also cited the cost of real estate, especially leased premises, as a factor in the closings. UFW owns most of its Canadian real estate and 11 of its U.S. stores, all in larger markets and which will remain open.
Volken said the company intends to stay in the United States and will be looking for growth opportunities. Meanwhile, UFW will continue adding to its Canadian store count in 2003.
"There's a lot of room to expand in Canada," Volken said. "We plan to open more stores in Ontario. We're building one in Windsor, and for the others we're still in negotiations, so in all we could open four or five stores this year."
In another strategic move, UFW is rebranding and remerchandising Wosk's, the full-line independent Canadian furniture chain it acquired in 1998. Volken said the Wosk's formula had grown old and tired, and the name has been changed to Now Furniture & Mattresses. The 16 stores in the chain average 30,000 square feet.
Now's merchandise mix hits the midrange, mass-market price points. "It starts where United ends," Volken said, "although we used many of the same suppliers and a lot of imports."
The 11 Wosk's stores in British Columbia already have changed to the Now format, and the five in Alberta will be converted in the next two or three months, Volken said.
