RTG expansion in high gear with ex-Rhodes stores
By Clint Engel -- Furniture Today, January 29, 2006
Seffner, Fla. — Rooms To Go will kick expansion plans into high gear with the opening of 11 former Rhodes stores by the end of January, and at least eight other units in new and existing markets by the end of the year.
The nation's highest-volune furniture store, which acquired the assets of bankrupt Rhodes last year, is reopening the stores as Rooms To Go in Wilmington, N.C.; Columbia, S.C. (two stores); Augusta, Fayetteville and Columbus, Ga.; Pensacola and Panama City, Fla.; Gulfport, Miss.; and Mobile and Montgomery, Ala.
All but the Fayetteville store, in the greater Atlanta area, are in new TV markets for RTG. The Columbus store will be a Rooms To Go outlet while the rest will be full-line units.
On top of this, the 102-store chain will open stores this year in Austin and Dallas, Texas; five more in unidentified Florida markets, including two replacement stores; and its first store in Myrtle Beach, S.C. The net gain will be at least 17 stores.
"For us, that's a major expansion," said Jeff Seaman, the retailer's CEO. He said the growth is on par with its early expansion in the 1990s, when it opened 10 to 15 stores in some years.
Fueling the latest growth spurt is the Rhodes deal. A Rooms To Go affiliate and liquidator Great American Group partnered to acquire the retailer's assets out of bankruptcy in August for an estimated $45.8 million.
"We were going to go into the (Florida) Panhandle anyway, but (the Rhodes buy) certainly made it faster and easier," Seaman said.
He said business has been "pretty good" lately for the company, which is coming off a strong fourth quarter and good New Year's holiday weekend, although traffic has slowed a bit more recently.
Surprisingly, the negative impact of Hurricane Wilma on business and traffic last year was short lived, Seaman and other Florida retailers have said. They had feared that customers would put off buying furniture because they had to spend money on roofing, landscaping and other outdoor repairs.
In 2005, RTG had sales of about $1.6 billion, Seaman estimated, up more than 12% from $1.42 billion in 2004.
He declined to project sales for the new stores, but said the former Rhodes stores alone will add more than 10% in selling space, "so we hope we'll add over 10% to our sales."
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