Sales jump 8.3% for Top 100 in '05
By Clint Engel -- Furniture Today, May 29, 2008
High Point — High Point— Furniture, bedding and accessories sales for the nation's largest furniture stores jumped a healthy 8.3% last year despite a few multi-million-dollar hits taken by some of the biggest players.
U.S. furniture sales for Furniture/Today's Top 100 grew to $29.2 billion in 2005, up from $27.0 billion for the same companies in 2004. The combined retailers grew their market share by two percentage points to 56%, reversing the market-share decline of last year's Top 100 (which was down one point to 53%).
This year's group also reversed an odd turn last year when the Top 100's overall sales gain was outpaced by all U.S. furniture stores for the first time in the history of the report. This time, the 8.3% gain easily beat the 4.1% gain for all U.S. furniture stores, which did $52.4 billion in furniture, bedding and accessories sales in 2005.
Tough challenges
This development doesn't surprise Jerry Epperson, industry analyst and managing director of Mann, Armistead & Epperson, who said the challenges for smaller independents continue in the current business climate.
"It's getting more and more expensive to be truly competitive," Epperson said.
Real estate and delivery expenses are up while the average sales ticket continues to go down, thanks to imports and price deflation. Then there are the extra costs associated with buying containers and developing the logistics and back-end systems needed to compete with the regional and super regional chains these days.
"Unfortunately, what we find in too many cases is what keeps a lot of these (smaller) stores alive is the bedding department," he said, adding that that's where they make their best margins.
Epperson said real estate has become one of the biggest problems holding smaller stores back. They often own their store locations and are slow to move them when the business climate around their buildings changes. The larger Top 100 chains, meanwhile — such as Bassett Furniture Direct, Rooms To Go and Ashley Furniture HomeStores — open stores when and where they need to be.
Levitz, Rhodes impact
The Top 100's improved performance came despite some big volume declines, led by No. 13 Levitz Furniture (formerly Levitz Home Furnishings Inc.), which closed its Seaman's chain, filed for bankruptcy, closed more stores and shed an estimated $317 million in sales in the process. The assets of the company — which fell out of the Top 10 — were acquired out of bankruptcy late last year by Prentice Capital Management and Great American Group, and the new Levitz appears to be in the early stages of a turnaround.
No. 23 Rhodes, which filed for bankruptcy in November 2004, and no longer existed by the end of last year, hurt the Top 100 with a $68 million drop in volume, and No. 3 Pier 1 Imports, which is working on a makeover this year, declined by nearly $46 million in furniture and accessories sales in 2005.
That was the bad news. Better news for the Top 100 came from a variety of other places. Seventy-eight of the Top 100 posted sales increases, and 35 had double-digit increases. While 17 of the stores had sales declines, five were by less than 3%.
In addition, 53 of the Top 100 companies grew their store base last year, and just less than two-thirds either say they have plans to do the same this year or are known to have expansion plans. Overall, the Top 100's store count grew 2.7%, or by 222 stores, to 8,363 units. That's down from the 5.4% unit growth (419 stores) for last year's Top 100.
For the fifth consecutive year, Seffner, Fla.-based Rooms To Go took the No. 1 spot with a 12.7% gain in sales to $1.60 billion and a 4.1% increase in store count to 102 units. RTG also continues to have one of the best inventory turn rates and the third-best sales per square foot figure ($900) of any company for which a reliable estimate is possible.
Hot on its heels, though, was Ashley Furniture HomeStores, which rose from No. 8 last year to the No. 2 spot this year. Sales for the manufacturer-dedicated store network grew 73.2% to $1.58 billion, the second-best percentage gain among the Top 100, and the top volume gainer — up $668 million.
Ashley also had the largest net gain in units, growing by 66 stores for a total of 219 stores at year-end.
Several Top 100 companies in their own right are Ashley Furniture HomeStores dealers, too, and as usual, Furniture/Today backs out sales and stores to avoid double counting in overall sales and store count figures.
Pottery Barn to Top 10
Of the Top 10 companies on the list this year, seven had sales of $1 billion or more and five posted double-digit increases, including No. 10 Pottery Barn, which grew furniture sales by an estimated 12.1% to $790 million. The San Francisco-based retailer was the only company new to the Top 10, stepping in for Levitz, which fell to No. 13 from No. 7 the year before.
This year's Top 100, now in its 22nd year, had four newcomers, including Costco Home, the Issaquah, Wash.-based furniture store division of Costco Wholesale. With just two stores — in Kirkland, Wash., and Tempe, Ariz., Costco Home had estimated furniture sales of $108 million for its fiscal year ended August 28, making the retailer No. 65 in its first time on the list.
Linder's of Garden Grove, Calif., also entered the ranking at No. 90 with $74 million in 2005 sales, helped in part by its August acquisition of Legacy Home Furnishings/Rooms Express of Cathedral City, Calif.
Morris Furniture of Fairborn, Ohio, made the Top 100 at No. 97 with sales of $64.2 million, a 17.5% increase over the previous year, helped by the opening of a 40,000-square-foot Ashley Furniture HomeStore, the first of four units planned through the end of this year.
And Farmville, Va.-based Green Front Furniture rounded out the list at No. 100, moving off the contenders list with sales of $61.4 million. That cutoff was slightly lower than the $61.9 million for the previous year's Top 100.
Several players drop
Falling off the Top 100 list this year was the now defunct Homestead House, of Broomfield Colo., Homewood, Ill.-based Bay Furniture, Las Vegas-based Walker Furniture and Wood-Armfield of High Point.
After steady consolidation and sales declines, Homestead House threw in the towel last year, selling its three Colorado stores to No. 28 American Furniture Warehouse in June, then shutting down its upholstery plant and the rest of its retail operations in El Paso, Texas, Los Angeles and San Diego.
The upscale company was ranked No. 87 on last year's survey with estimated sales of $71 million, but at its peak in the mid-1990s, Homestead House operated stores in five states generating an estimated $130 million.
Bay, previously No. 97, recently announced plans to sell or liquidate its Bay stores and a reliable sales estimate could not be obtained.
Both Walker and Wood-Armfield have moved to the "Stores to watch" list, showcasing contenders to the Top 100.
Big Lots Furniture store, which was on the watch list last year, was dropped from that, too, after announcing that it was closing all 41 furniture stores by the end of 2005.
The parent, however, remains a major furniture player that will be followed in Furniture/Today's upcoming Top 25 U.S. Furniture Retailers report, which encompasses furniture stores as well as department stores, mass merchants and other big furniture sellers.
Fast climbers
Four companies managed double-digit climbs through the Top 100, with the biggest leap coming from Design Within Reach, the publicly held modern home furnishings chain that sells online, through catalogs and in stores. The San Francisco-based chain jumped 35 spots to No. 63 partly as a result of a change in Furniture/Today's sales calculations, which gave more weight to DWR's residential vs. commercial business. Residential furniture, bedding and accessories sales rose nearly 75% to $110 million, giving DWR the greatest percentage sales gain of any Top 100 company.
The retailer also had the greatest percentage unit gain, increasing its store base almost 70% to 56 units.
Furniture Outlets USA spiked 16 spots to No. 59 as the Sioux Falls, S.D., chain added two more Ashley stores and expanded and remodeled its South Dakota Furniture Mart in Sioux Falls to 120,000 square feet.
No. 49 Z Gallerie jumped 13 places from its previous No. 62 ranking, helped in part by aggressive expansion (it opened nine stores last year,) and a revision in Furniture/Today's sales estimates for the company, which now includes certain accessories categories that had mistakenly been omitted.
And Sleep Country USA jumped 10 spots to No. 82, as the Kent, Wash., chain owned by Simmons grew sales 21% to $80.9 million.
Outside of the retailers that fell off the list, the biggest move downward came from San Diego-based Jerome's, down 12 spots to No. 68 with estimated sales off 7.3% to $106.3 million.
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CA6339958 the article is there, but pretty...
- 2007-5-12 03:54:13 -
good question...
- 2007-5-12 03:51:02 -
so where is the article?...
- 2007-5-12 03:49:46
