Homestead in play
Jabs' American in talks for 3 Colo. stores
By Clint Engel -- Furniture Today, April 24, 2005
Englewood, Colo. — American Furniture Warehouse here may be buying the three Homestead House stores in Colorado.
Christine Herbert, director of communications for nine-store American, confirmed that "we're in discussions with" Homestead House for the Colorado stores.
But she said the companies haven't reached a deal and she had no additional comment.
American President Jake Jabs declined to comment last week. Homestead House CEO David Smith couldn't be reached for comment.
Sources have told Furniture/Today that buyers for the midpriced American chain were at the High Point market this month uncharacteristically visiting with high-end resources, in preparation for a possible Homestead House deal and liquidation sale.
Eight-store Homestead House has two Denver metro area showrooms, in Westminster and the Littleton area, and a Touchstone Design Studio & Furniture showroom in Fort Collins, Colo.
American has showrooms near all three of the Homestead House locations.
Homestead House also operates five other stores in California and Texas.
Last year, American's furniture, bedding and accessories sales grew to about $311 million, up from an estimated $304 million in 2003.
Last summer, Jabs announced a $45 million plan to build two 500,000-square-foot mega-centers in Colorado Springs and Firestone, Colo.
He estimated that the expansion eventually would add about $120 million in annual sales.
Homestead House, which has been scaling back its operations in the tough high-end market, had an estimated $80 million in furniture, bedding and accessories sales in 2003 — down more than 18% from the year before. An estimate for 2004 was not available.
In recent years, the company has made numerous changes in its operations, including centralizing management and in 2002, opening the Touchstone store in Fort Collins to further emphasize the brand name it has been developing through exclusive goods and its Touchstone manufacturing operations. Touchstone also wholesales to other retailers.
Jay Smith, David Smith's son and head of Touchstone wholesale, said that business has been run as a separate entity for nearly two years and will continue to operate separately. The division has 17 retail accounts and more commitments from retailers, and is looking for showroom space both in High Point and Las Vegas, he said.
But Homestead House's retail business has been sliding, to $80 million at nine stores in 2003 from and estimated $128 million at 17 stores in 1999. Its Top 100 ranking slipped to 75 from 45 during the same period.
A year ago, Homestead House closed its Albuquerque, N.M., store. In January, the retailer sent a circular to Colorado residents built around the theme, "The boss is retiring," and featuring a photo of David Smith.
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American Furniture eyeing Homestead House
Apr 20, 2005
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