Benchmark shutting down
Plans liquidation
Clint Engel -- Furniture Today, January 5, 2006
OLATHE, Kan. -- Former Top 100 retailer Benchmark Home Furnishings is going out of business, two and a half years after Nebraska Furniture Mart opened a megastore nearby.
Benchmark’s owners of have sold their three-building retail and distribution complex, are liquidating some $15 million of remaining inventory, and have no immediate plans to jump back into the business.
Benchmark founder Bob Davidow confirmed that the Olathe complex — roughly 700,000 square feet in three buildings — was sold to Deerfield, Ill.-based real estate investment trust Quadrangle Development. He would not disclose the purchase price. About a year ago, when Benchmark announced plans to sell, he said the asking price was about $35 million.
Benchmark is handling its own going-out-of-business sale, which Davidow estimates will take 90 to 120 days. The company’s Benchmark BeHome.com e-commerce Web site, which also is liquidating, notes that the owners are retiring after 40 years and “$15 million inventory must be sacrificed.”
Davidow would not disclose 2005 sales but said business was sluggish all year. Benchmark last appeared on Furniture/Today’s survey of Top 100 U.S. furniture store in 2004, based on estimated 2003 sales of $87 million. The retailer’s sales fell 11% from 2002 to 2003, the year that big-box competitor Nebraska Furniture Mart opened in the Kansas City metro area.“Anytime you divide up the pie, there’s certainly going to be an effect,” Davidow said. “Was it a major effect? I don’t think so. Customers tell us they were really happy with our products and services and are sorry to see us go.”He said the bigger issue is the dramatics changes facing the industry, from the rise of low-cost imports to an uneven sales environment. “The furniture business is in a giant upheaval. Anybody who doesn’t recognize that hasn’t read Furniture/Today.”Davidow said he believes the Berkshire Hathaway-owned Nebraska Furniture Mart is facing the same problems as Benchmark and the industry.NFM, however, said it has done quite well in Kansas City since opening the 700,000-square-foot complex in August 2003, although Executive Vice President Bob Batt wouldn’t disclose sales. When the store opened, Berkshire Chairman Warren Buffett predicted it would become the biggest-volume home furnishings store in the nation — doing even more than the $350 million or so NFM was doing annually at its flagship store in Omaha, Neb.“We’re very blessed,” Batt said. “Our business is tremendous. We’re having a terrific time in Kansas City.”
In December 2004, when Davidow announced the property was on the market, he said his plan was to move the business to another location. Now he said there are no immediate plans to do that.“No more furniture business,” he said. “We’re hanging up our spurs for awhile.” He added that plans now call for rest, relaxation and relocation to Nevada, “whereabouts unknown.”Tom Blunk, a principal of Quadrangle in its Lenexa, Kan., office, said Benchmark’s warehouse likely will be sold or leased to a distribution company. The two showroom buildings could be sold or leased for office, retail or industrial uses, or redeveloped by Quadrangle.“Two of the three building have furniture (store) applications so certainly we would be looking for new furniture tenants as well an any retail tenants,” he said.With the Benchmark GOB under way, Davidow is closing what he once saw as a catalyst for an Internet- and technology-integrated retail strategy that he eyed taking nationwide. In March 2000, he announced to the industry his plans to open 1 million-square-foot retail and distribution complexes in 15 major markets over five years.That plan never came to pass. Instead, Benchmark consolidated down to one Kansas City-area campus.Whether the 63-year-old Davidow will be out of the industry for good remains to be seen. He said he plans to attend the Las Vegas furniture market, opening later this month. Asked why, considering his retirement plans, Davidow laughed and said, “You never know. … Never say never.”
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Benchmark calls it quits
Jan 22, 2006
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