Ashley leads Top 100 in growth for 3rd year
Crate and Barrel, Select Comfort also rank high on 2004 growth index
By Clint Engel -- Furniture Today, June 20, 2005
High Point — For the third year in a row, Ashley Furniture HomeStores is the fastest-growing furniture chain in Furniture/Today's Top 100.
The dedicated store network of Arcadia Wis.-based manufacturer Ashley was tops in two of five growth measures used by Furniture/Today to develop a growth index — leaving its counterparts far behind in the areas of percentage sales increase (up 52.2%) and dollar volume gain (up $313 million).
And just like last year, the 153-store chain was the only retailer to place in the Top 10 of all five measurements of sales and store growth. In the equivalent-store sales measure, Ashley's HomeStores was No. 2, edged out by another aggressive Top 100 company, Bob's Discount Furniture.
Equivalent-store sales is a variation on same-store sales calculated by subtracting the percentage change in a retailer's net store count from the percentage increase in sales. This year's report excluded seven Top 100 companies that had sales increases but net store declines last year and seven companies with declines in both categories.
Bob's equivalent-store sales were up 25.9% from the year before, compared to 25.7% for Ashley Furniture HomeStores. In 2004, the Manchester, Conn.-based Bob's store count held steady — with three new stores traded for three that closed — while its furniture sales soared 25.9% to $258.1 million.
Earlier this year, private equity firm Saunders Karp & Megrue acquired a 70% stake in Bob's, promising more store growth. Since then, Bob's has opened its 20th store in Natick, Mass., and it plans to open one to three more units before the year is out.
Ashley powers up
Ashley, meanwhile, was arguably the most well rounded of the index lot with impressive store growth to go with the big sales increase. The chain opened a net 32 HomeStores in 2004 (fifth best) for a 26.4% increase in net units. That percentage gain was the sixth-best increase among all indexed companies in that category.
Expect more growth this year, as Ashley strengthens its alliances with Top 100 retailers and smaller dealers alike — aiming to open about 40 new dedicated stores this year.
Other leaders
In addition to Ashley, four other companies — Crate & Barrel, Select Comfort, Pottery Barn and Raymour & Flanigan — are repeats in the Top 10 growth index this year.
No. 2 on the index, with a strong showing in all categories, is Northbrook, Ill.-based Crate & Barrel. The lifestyle specialty retailer had the fifth-greatest volume gain (up $88.6 million) and the eighth-greatest percentage-sales gain (up 20.3%). It just missed the Top 10 cut in the category of net unit growth, tying for the 11th-best growth rate with Thomasville Home Furnishing Stores (each up 13 stores).
Crate & Barrel also managed a respectable showing in the two remaining categories with the 17th-best percentage gain in net unit growth and the 18th-best equivalent-store sales gain — up 9.8%.
Third on the index is Select Comfort, which placed among the Top 10 in three categories, including net change in revenue, with an $86.1 million increase for the sixth-best rate. The Minneapolis-based air bed maker and retailer grew to $525.3 million in 2004, up 19.6% for the ninth-greatest percentage gain among Top 100 companies. Its net 26-store gain by year-end was the seventh best among its peers. And like Ashley, Select Comfort promises a lot more growth this year, with plans to open 30 to 40 new stores (while it closes five mall-based units).
Pottery Barn continued to outpace most of its furniture-store competitors with the third-best volume gain — up an estimated $105 million in furniture, bedding and accessories sales, thanks to the continued strength of its Pottery Barn and Pottery Barn Kids stores as well as its e-commerce and catalog businesses.
The San Francisco-based retailer also added a net 18 stores last year for the eight-best net unit growth rate.
No other index leader placed among the top 10 in more than one measurement field.
Sleepy's was No. 5 on the index, owed largely to the net 42 stores it opened last year for the second-best net unit gain behind Fort Worth, Texas-based Pier 1 Imports.
But Bethpage, N.Y.-based Sleepy's isn't a slacker in the sales categories, either. While not enough to make the Top 10 of any sales measurement category, sales for the bedding specialist grew 15.7% last year to $325 million. The $44 million net volume gain was the 14th largest among the Top 100.
No. 6 on the index, Room & Board made its biggest mark with its 19.6% sales gain, for the 10th-best percentage gain to $134 million. That increase came despite growing by only one net new store (to nine units) and with the expansion coming at the very end of the year. The gains, however, should keep coming with the added volume of that Manhattan unit as well as from another 48,000-square-foot store that just opened in San Francisco.
Z Gallerie, No. 7 on the growth index, didn't place among the Top 10 in any of the five measurements, but it was in the top 20 in three categories, including percentage sales growth —up 17.4% to $105.3 million. The Gardena, Calif.-based lifestyle specialist opened a net six stores last year, including stores in new markets Omaha, Neb., Pittsburgh and Indianapolis.
The Sleep Train, No. 8 on the index, gained entry thanks largely to its 14.1% gain in equivalent stores sales — the 10th-best percentage gain. The Citrus Heights, Calif.-based bedding specialist, operating as Sleep Train, Mattress Discounters and Boxcar Bedding, had the 19th-best overall percentage sales gain, up 17% to $172 million.
Liverpool, N.Y.-based Raymour & Flanigan — the fifth repeater on the growth index — came in at No. 9 with the seventh-best percentage net volume gain, growing $68.7 million to $531.6 million. The Northeastern chain climbed up the Top 100 three notches to No. 13 and should continue the march with its aggressive growth plans that include further penetrating the greater New York market.
Like Z Gallerie, No. 10 on the index, Big Sandy Superstore, got there without making any of the other Top 10 lists, but with strong showings in several categories. Its best areas were percentage sales gain and equivalent-store sales gain. The Franklin Furnace, Ohio-based retailer had the 12th-best gain in both categories, up 18.7% and 13.7%, respectively.
PMD just misses Top 10
Top 100 newcomer PMD Furniture just missed the top index cutoff at No. 11, but notably placed in the top 10 of three growth categories. The Columbus, Ohio-based warehouse store chain posted the third-best percentage sales gain, up 43.3% last year to $69.4 million; the third-best store gain, adding a net 36 units; and the fifth-greatest percentage change in store count.
City Furniture of Fort Lauderdale, Fla., was another high scorer that just missed the index cut at No. 12. The Top 100 company had the 19th-best largest net revenue gain — up $33.5 million to $297.3 million.
And Design Within Reach, another Top 100 newcomer, was three out from the index's Top 10, yet No. 1 in percent change in units (up 106.3% to 33 stores), No. 2 in percentage sales growth (up 44.8% to $63 million), and No. 9 in net store count growth.
The 153-store Ashley Furniture HomeStores chain was the only retailer to place in the Top 10 of all five measurements of sales and store growth.
