UPDATE: Furniture store The Dump to enter Atlanta, Tempe

Parent Haynes Furniture may also add third new unit

Clint Engel -- Furniture Today, September 23, 2009

HOUSTON — Haynes Furniture will enter two new states early next year with the opening of The Dump stores in Atlanta and Tempe, Ariz., and could open one more new store before 2010 is out.

Ned Scherer, CEO of The Dump division of Virginia Beach, Va.-based Haynes, confirmed that the discount-oriented retailer will open in January in the 110,000-square-foot former Costco Home store in Tempe. It also is leasing a nearby 130,000-square-foot warehouse in an industrial park to serve the store.

In Atlanta, The Dump will open in a former Home Depot near Interstate 285 and State Road 400 in February. The retailer has added about 30,000 square feet to the building for a total of about 175,000 square feet, which will be divided between showroom and warehouse.

The stores will boost The Dump, Haynes' fastest growing store division, to 10 showrooms in six states. In addition to the five Haynes stores in Virginia and North Carolina, Haynes operates The Dump locations in Hampton, Norfolk and Richmond Va.; in Pennsylvania and New Jersey in the greater Philadelphia market; in Houston, where Scherer is based; and in Dallas, where the latest Dump opened in March 2007.

Scherer wouldn't disclose projected sales for the upcoming new stores, but said the company believes they will perform as well as its newest Houston and Dallas stores, which have been successful since their openings. Overall, Scherer said The Dump now accounts for the majority of Haynes' furniture, bedding and accessories sales, which totaled an estimated $250 million in 2008, according to Furniture/Today's Top 100 report.

Last year, Haynes phased out its two-store The North Carolina Co., a high-end discount store format.

Scherer said same-store sales for The Dump this year are running 20% to 25% ahead of last year as the specialty retailer continues to outperform in a tough economic climate.

"We think we are a pretty compelling value proposition for the public," he said. "We don't play a lot of games with pricing. We buy differently. Our logistics are different, and the consumer gets a great experience when they walk into our store."

The Dump hones in on "opportunity buys," which Scherer said could be anything from excess production or a line a supplier is closing out, to entire showrooms of merchandise, goods made for a particular retailers that are later cancelled, to odd upholstery covers at the end of the season that the retailer might use on a select number of frames.

Scherer said roughly 20% to 25% of the sales floor changes from week to week, so a consumer coming in one month to the next could see 80% new merchandise between visits. There are no sales and the store is open Fridays, Saturdays, Sundays and holidays only - a practice that The Dump promotes on its Web site as saving both the company and consumers money.

Scherer said the retailer tries to price goods 30% to 70% lower than its competition on comparable merchandise. It doesn't promote brands in its advertising, at the request of some of its suppliers, and Scherer said the company stays away from promotional goods, emphasizing midpriced to high-end merchandise at great values.

In a perfect world, he said the company would have spaced the Tempe and Atlanta openings a bit further apart, but the real estate opportunities were too attractive to pass up. He said the Tempe store will be accessible to consumers from throughout greater Phoenix.

The Dump is looking to expand in other markets and may open one more location next June or July, he said. It is targeting large metro areas with good Interstate access, making it convenient for consumers to get to its destination stores on weekends.

"We are looking hard at Denver," he said "We've looked at Las Vegas and continue to look at Las Vegas." Southern California and Florida are also on the radar.

The Dump has looked at Chicago, too, but found the road systems to be less than ideal for its business. However, with "the right box at the right price, we'd still consider," he said.

In addition, the company was approached about a retail acquisition in the greater Baltimore/Washington D.C., market that it is considering. Scherer wouldn't name the retailer.