Conventional stores capture 66% share
Costco Home, Rooms To Go register hefty gains in 2005
By Furniture Today Staff -- Furniture Today, May 28, 2008
High Point — High Point— The 70 conventional furniture stores in the Top 100 did a better job of holding their own last year against the aggressive, but smaller specialty retailers that have been gaining ground on them for years.
Thanks in part to some new blood — No. 65 Costco Home, for example — and hefty volume gains by No. 1 Rooms To Go and others, the conventional stores took a 66% share of all Top 100 sales. That's up from the 64% stake for the conventional stores on last year's survey.
Four of the six Top 100 companies sporting triple-digit net sales gains last year were conventional retailers, led by No. 2 Ashley Furniture HomeStores, which grew by $668 million to $1.58 billion. The others were Rooms To Go, with a $180 million gain, No. 5 Berkshire Hathaway furniture division, with a $128.3 million gain, and No. 11 Raymour & Flanigan, with furniture, bedding and accessories sales up by nearly $124 million.
Combined sales for conventional stores increased 8.2% to $19.2 billion.
The 30 specialty retailers on the list continued to hammer away, though. Their combined 8.5% sales gain to $10.1 billion was better than the overall gain for conventional stores as well as the combined gain for all Top 100 companies.
Changing store counts
The specialists' store count grew 3.8%, or by 207 stores, to 5,660 units for a 68% share of all stores on the list. That compares to a paltry 15-store gain by conventional retailers, which grew their base by less than 1% percent to 2,703 stores and watched their store share decline by one percentage point to 32%.
Conventional stores also were hurt by No. 13 Levitz Furniture — formerly Levitz Home Furnishings Inc., which filed for Chapter 11 bankruptcy protection last year and emerged under new ownership but not before cutting some 56 stores and more than $300 million in sales.
Fourteen of the 35 Top 100 companies with double-digit sales increases were specialists, led by No. 63 Design Within Reach. The publicly held, multi-channel retailer bested Ashley Furniture HomeStores for the best percentage gain last year, up 74.6% to $110 million (though Ashley was the net volume gainer with dollar volume gain that was six times DWR's total).
Other top gainers
Other specialists with solid sales gains included No. 44 Room & Board, up nearly 33%, No. 12 Select Comfort, up $113.9 million, or 21.7%, and No. 4 Ikea, up a net $185 million to $1.26 billion.
Overall gains came despite poor showings from regulars Pier 1 Imports, the Top 100's largest specialty retailer (with sales down 3.4%) and No. 20 The Bombay Company, with a 3.8% sales decline.
Nearly a dozen Top 100 companies managed to grow by 10 or more stores last year and all but four of them were specialists (and five of them were sleep specialists). Conventional retailer Ashley grew by the most stores (66 stores for a total of 219 at yearend) but it was followed closely by No. 21 Sleepy's with a net 57 new stores.
Specialist Design Within Reach had the greatest percentage increase in store count, up nearly 70% to 56 stores.
The specialty retailers on last year's Top 100 beat the conventional stores in all three key performance categories — margins, inventory turns and sales per square foot — but this year, conventional stores took one measure back.
The sales-per-square foot for the 33 conventional retailers reporting the information was $289 vs. $280 for 16 specialists reporting.
The specialists, however, still own the inventory turns category, with stock turning a median 6.3 times to 5.1 times for the conventional stores reporting. Specialists also had better profits, with a median gross margin of 48% to 46% for conventional stores.
Among the specialty retailers, the two largest subcategories — bedding specialists and lifestyle specialists — were the fastest growing and the reason why the specialists overall beat the growth rates of both their conventional counterparts and all of the Top 100.
Bedding remains hot
The 11 bedding specialty retailers posted the greatest gains, with sales up 15.8% to $2.6 billion and net store count up 108 units, or 5%, to 2,248 stores.
The 14 lifestyle companies, which account for 60% of all specialty stores sales, grew 8.1% to $6.0 billion, while their combined store count grew by 111 units, or 4.4% to 2,662 stores. Some of the best results for this group came from Design Within Reach, with a 74.6% sales increase, No. 44 Room & Board with a 32.8% gain to $178 million, and Ikea, which grew its furniture, bedding and accessories sales an estimated $185 million to $1.26 billion.
The catchall "other" subcategory, consisting of No. 88 PMD Furniture Direct and No. 89 USA Baby, posted a 4.2% sales gain to $148.8 million and grew its store base by eight units to 183 stores. While this category was the top-performing subcategory a year ago, this year it didn't benefit from No. 26 Slumberland, which was reclassified as a conventional furniture store.
And, as it was a year ago, the living room specialty subcategory brought up the rear, with combined sales for No. 53 Jennifer Convertibles, No. 7 La-Z-Boy Furniture Galleries and No. 72 Norwalk — The Furniture Idea declining 1.4% to $1.3 billion.
Store count for this group dropped by 20 units to 567 stores with closings at Jennifer more than offsetting small gains at La-Z-Boy and Norwalk.
What's more, this year, the living room specialists lost their strongest performer from 2004 — Sofa Express, the Klaussner-owned retailer that was reclassified as a conventional retailer, now ranked No. 35 as Sofa Express and More.
| Top 10 conventional furniture stores | ||||||
|---|---|---|---|---|---|---|
| Ranked by sales of furniture, bedding and accessories | ||||||
| ESTIMATED FURNITURE, BEDDING, ACCESSORY SALES IN $ MILLIONS | NUMBER OF UNITS | |||||
| RANK | COMPANY | 2005 | 2004 | PERCENT CHANGE 2004 TO 2005 | 2005 | 2004 |
| 1 | Rooms To Go | $1,600.0 | $1,420.0 | 12.7% | 102 | 98 |
| 2 | Ashley Furniture HomeStores | 1,581.0 | 913.0 | 73.2 | 219 | 153 |
| 5 | Berkshire Hathaway furniture division | 1,223.2 | 1,094.9 | 11.7 | 32 | 31 |
| 6 | Ethan Allen | 1,197.9 | 1,171.0 | 2.3 | 279 | 282 |
| 8 | American Signature | 830.0 | 805.0 | 3.1 | 111 | 100 |
| 9 | Havertys | 827.0 | 784.0 | 5.5 | 118 | 117 |
| 11 | Raymour & Flanigan | 655.5 | 531.6 | 23.3 | 59 | 53 |
| 13 | Levitz Furniture | 600.0 | 917.2 | -34.6 | 80 | 136 |
| 15 | Art Van | 535.0 | 545.0 | -1.8 | 29 | 30 |
| 16 | Thomasville Home Furnishings Stores | 530.0 | 500.1 | 6.0 | 150 | 144 |
| Top 10 specialty stores | ||||||
|---|---|---|---|---|---|---|
| Ranked by sales of furniture, bedding and accessories | ||||||
| ESTIMATED FURNITURE, BEDDING, ACCESSORY SALES IN $ MILLIONS | NUMBER OF UNITS | |||||
| RANK | COMPANY | 2005 | 2004 | PERCENT CHANGE 2004 TO 2005 | 2005 | 2004 |
| 3 | Pier 1 Imports | $1,314.8 | $1,360.6 | -3.4% | 1,150 | 1,122 |
| 4 | Ikea | 1,260.0 | 1,075.0 | 17.2 | 24 | 21 |
| 7 | La-Z-Boy Furniture Galleries | 1,058.6 | 1,068.7 | -0.9 | 308 | 304 |
| 10 | Pottery Barn | 790.0 | 705.0 | 12.1 | 268 | 263 |
| 12 | Select Comfort | 639.2 | 525.3 | 21.7 | 396 | 370 |
| 14 | Crate & Barrel | 582.5 | 524.1 | 11.1 | 145 | 136 |
| 20 | The Bombay Company | 433.6 | 450.9 | -3.8 | 439 | 446 |
| 21 | Sleepy's | 394.0 | 325.0 | 21.2 | 375 | 318 |
| 22 | Restoration Hardware | 385.0 | 345.0 | 11.6 | 106 | 100 |
| 24 | Cost Plus World Market | 363.0 | 346.0 | 4.9 | 267 | 237 |
|
Source: Furniture/Today's Survey of Top 100 U.S. Furniture Stores
|
||||||
-
Specialists still dominant
Jun 5, 2005
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
