Oregon chain off to strong start with new, larger store
By Clint Engel -- Furniture Today, February 6, 2005
Hubbard, Ore. — Furniture Outlet's newest furniture store here got off to a strong start and helped turn a typically slow December into the family-owned retailer's best month of the year.
"Business has been phenomenal," said Trudy Palo, co-owner of the midpriced, four-store business with her husband, Rick Palo. "We've set records."
The new store, with a 20,000-square-foot showroom and a 10,000-square-foot warehouse, replaced a smaller store the Palos opened in 1996, one block away on the same Pacific Highway 99.
Located in a small community surrounded by farmland and wine country, the store draws from 12 to 15 small towns as well as Salem, Ore., and a bit from Portland.
The Palos project the store will do about $3.2 million in sales this year, up from $2.6 million last year, mostly at the previous location. All told, they predict the four stores should do about $11 million this year, up from $9.7 million in 2004.
The new Hubbard store represents a $1.5 million initial investment for the land and building, and because the Palos own rather that rent as they did at the former store, the monthly operating costs for the new unit are lower even though it's nearly twice the size, Trudy Palo said.
Among the new features are lower ceilings for a more residential feel, and more track lighting, targeted to highlight the product.
"What a great feeling you get when you go into the new store vs. the old warehouse of a store we had," Rick Palo said.
The retailer has been narrowing its vendor base. Key suppliers at the new store include Emerald Home Furnishings, Ashley, Broyhill, Stanton International, Lane, Mastercraft, Intercon and Martin.
In Hubbard and its other stores, Furniture Outlet has partnered with Serta and its America's Mattress sleep shop division to be a Serta-only dealer. Rick Palo said Serta's service has been "exceptionally good," and added that after making the move to one bedding line last year, sales jumped 30% over the previous year.
"Our larger vendors are supporting us very well, making it very easy for us to take care of customers," he said. "It seems to me it has been smarter for us to scale back and use fewer suppliers and be more important to them."
With additional space in Hubbard — now about the same size at its Tigard, Ore., store — Furniture Outlet was able to broaden its assortment, using the same vendors but adding step-up goods that the Palos say have been well received.
Where the former Hubbard store was topping out at about $1,999 for master bedroom, the new store reaches to $4,499. Leather sofas peaked at about $999 previously, but now Rick Palo cites success with $1,699 and $1,799 frames as well.
With the early success here, Furniture Outlet is considering building another store. It would be a replacement unit, but the Palos declined to identify the market.
In addition to Hubbard and Tigard, the company operates smaller stores in Newberg and McMinnville, Ore.
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