UPDATE: Hhgregg rolls out Ashley Furniture to all 228 stores
Clint Engel -- Furniture Today, November 19, 2012
INDIANAPOLIS — Electronics and appliance retailer hhgregg has completed a rollout of Ashley Furniture to all 228 of its stores, the company confirmed.
The move follows a test at a number of stores of upholstery, occasional tables, consoles and more from Ashley Furniture Inds.' Signature line, developed for non-Ashley Furniture HomeStores retailers.
Jeff Pearson, senior vice president of marketing for hhgregg, said the furniture rollout to 228 stores in 20 states "has been completed and we are ready for the holiday selling season."
He added, "We feel that our current customer base skews female and so this is the perfect opportunity for hhgregg. We also have an educated sales force and distribution network in place to deliver the products."
Kerry Lebensburger, Ashley's president of sales, said Ashley doesn't have a "locked in deal," nor has it signed any agreements with the Indianapolis-based retailer, so the floor could eventually include other sources.
Other large electronics and appliance dealers, including Richfield, Minn.-based Best Buy and Beaumont, Texas-based Conn's, have tested the home furnishings in a push for better margins and more female shoppers, and apparently hhgregg has taken notice.
As Lebensburger said, "Everyone knows there's no margin left in TVs."
In addition to furniture, hhgregg also is selling another new category, exercise equipment.
In a transcript of the retailer's quarterly earnings conference call posted on the Seeking Alpha website, hhgregg President and CEO Dennis May said the company is pleased with the results of the new businesses, "and I think when you visit the stores, you really like the way not only furniture and fitness looks in those store, but how the entire store looks."
Asked if the new business could combine for 10% of sales or 15% of gross profits next year, May said that's an aggressive projection, but added the that company believes furniture and exercise equipment are "going to be a good fit for us."
In the retailer's Greensboro, N.C., store, hhgregg - which already was selling bedding including Tempur-Pedic and Serta mattresses - now also features Ashley Signature living room packages, recliners, television consoles and more.
The display is in a dedicated space with the signage Furniture Home Solutions, and includes four sectionals, four five-piece living room packages and about a dozen recliners as well as a handful of stationary chairs, small recliner side tables and a large home entertainment wall, the latter retailing for $899.
Most of the upholstery is covered in leather or bonded leather, and room packages with sofas, loveseats and three tables range from $2,499 to $2,799. The consoles are stacked three high and range from $279 to $373, and the recliners run from about $300 to more than $600.
"What every electronics store has learned - Best Buy, (the former) Circuit City, you name it - is that the woman hates their stores, but she loves to buy TVs in furniture stores," Ashley's Lebensburger said.
He noted that furniture retailers including Rooms To Go and Ashley Furniture HomeStores have done well with furniture TV package deals.
He said Circuit City tested Ashley furniture, including bedroom furniture, about a year before the electronics chain folded. A three-month test in Boston was so successful that the company expanded it to Baltimore, but "it came too late to save them," he said.
Ashley also helped Conn's get started in the furniture category. It no longer sells that retailer, but Conn's furniture business continues to shine.
In its quarter ended Oct. 31, Conn's said furniture and bedding sales were up 31.7% over the same period a year ago, to $32.3 million, representing 19.3% of total sales and outpacing the sales growth of its other categories. A year ago, furniture and bedding accounted for just less than 16% of sales at the chain.
Best Buy also is testing the waters by placing Gardner-White furniture areas within two Detroit-area Best Buy locations.
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