FBI plans retail growth
Targets 400-plus stores, $1.75B in sales by 2006
By Clint Engel -- Furniture Today, November 4, 2002
St. Louis — Manufacturer Furniture Brands International is getting more aggressive with its dedicated-store expansion plans, now predicting it will have over 400 stores under its various brands doing about $1.75 billion in annual sales in three to three-and-a-half years.
"We're serious about gaining greater control of the distribution channel at the high end of the market," said Chairman Mickey Holliman. "We're on our way to doing that, and we're not going to deviate from that plan."
While its Thomasville Home Furnishings network has been the most active by far in the rollout of new stores, Furniture Brands is ramping up expansion plans for the reinvented Drexel Heritage. FBI also has entered the store fray with Henredon and is about to open its first three stores under the Lane Home Furnishings banner.
FBI's $1.75 billion retail sales target by 2006 or earlier compares with estimated U.S. sales last year of $598 million from Thomasville and Drexel Heritage stores, according to Furniture/Today figures. The nation's largest home furnishings retailer, Rooms To Go, had estimated sales last year of $1.26 billion.
The biggest push will come at Drexel, which currently has about 35 independently owned Drexel Heritage Home Inspirations stores. Holliman said that should hit 40 by the end of the year, with sales in the $150 million to $160 million range.
With new management in place and a new three-tiered product strategy, Holliman sees "awesome potential" with Drexel and is targeting 150 stores by sometime in 2006, up from the 100-store target announced earlier this year.
Response to the revived store program has been strong, said Lenwood Rich, Drexel executive vice president. At the October furniture market, Drexel received commitments for six new Home Inspirations stores, opening next year and representing 89,000 square feet of selling space. Three others — two in Phoenix and a second store in Atlanta — were secured just prior to market.
In addition, Rich said the company is launching a renewed in-store gallery effort for markets that may not support full-fledged Drexel stores. It recently has received 18 gallery commitments representing 105,000 square feet.
Holliman said he is pleased with expansion at Thomasville despite "an unbelievable number of delays" in getting stores open, in part because of the weak economy.
By the end of this year, Thomasville expects to have about 165 stores, said Lynn Chipperfield, Furniture Brands senior vice president. That would be up a net 18 from 147 stores last year.
The previously announced target of 250 Thomasville stores hasn't changed, but may take until some time in 2006 to accomplish rather than 2005. The Thomasville network then would account for about $1 billion of the $1.75 billion retail sales target and would include a few company-owned stores, such as the three opened in the San Francisco Bay area this year and up to three more next year in that market.
Holliman said he's also been talking to management at Henredon about dedicated stores.
In March, Louis Shanks of Texas opened the first 12,000-square-foot Henredon Gallery store, attached to one of its three main Houston stores. A second Henredon store is planned soon in South Florida, and Holliman said he envisions about 20 Henredon stores eventually.
Chipperfield noted that distribution issues at the very high end with Henredon are different, and that the brand doesn't lend itself to quite the same number of stores as with Thomasville and Drexel, although 20 stores is still considered aggressive.
With Thomasville, Drexel and Henredon stores, Furniture Brands is aiming to better control distribution at the high end. With Lane, and possibly Broyhill, stores, it primarily wants to fill voids in the marketplace where Holliman said the brands don't have sufficient penetration.
Furniture Brands plans to soft open the first Lane Home Furnishings store in Vancouver, British Columbia, this month, then a store in Tupelo, Miss., in February or March and one in Calgary, Alberta, in March, said Randy Spak, executive vice president of sales and marketing for Lane. The stores will average about 12,000 square feet.
Industry analyst Jerry Epperson isn't surprised by the aggressive stance Furniture Brands is taking on dedicated stores.
"It's working for La-Z-Boy. It's working for Ethan Allen. It's increasingly working for Bassett. It's no longer the exception; it's the rule," said Epperson, a managing director of Richmond, Va.-based Mann, Armistead & Epperson.
| Store numbers at year end; 2002 and 2006 are company projections. | |||
|---|---|---|---|
| FBI's retail growth | |||
| 2001 | 2002 | 2006 | |
|
Projected sales in 2006: $1.75 billion
Source: Furniture Brands International |
|||
| Thomasville Home Furnishings | 147 | 165 | 250 |
| Drexel Heritage Home Inspirations | 32 | 40 | 150 |
| Henredon | 0 | 1 | 20 |
| Lane Home Furnishings | 0 | 1 | 3+ |
