Rooms To Go buys Kirschman's
Will re-open in mid-Sept. under RTG name
Thomas Russell -- Furniture Today, June 9, 2006
Updated!
NEW ORLEANS -- Rooms To Go is acquiring five stores from Top 100 chain Kirschman’s and will reopen them as RTG stores in mid-September.
Two of the stores are in New Orleans and others are in Baton Rouge and Covington, La., and Gulfport, Miss. It does not include four Kirschman’s stores in Lafayette, Houma, Slidell and Gentilly, La., that closed after Hurricane Katrina hit last year.
A purchase price was not disclosed.
The Kirschman’s stores were closed this week for inventory. Room To Go was expected take control of the properties by the middle of next week. They will remain under the Kirschman’s name for the next 60 to 90 days, during which RTG will sell off the remaining inventory.
After the sale, the stores will close for remodeling, then reopen as Rooms To Go starting in mid-September.
Last month the company announced plans to open nine stores over the next two years on and near the Gulf Coast of Florida, Alabama, Mississippi and Louisiana. These five stores are part of that expansion plan.
Rooms To Go CEO Jeff Seaman said the deal makes sense because the company already has a 600,000-square-foot warehouse in Mobile, Ala., and has a store in Gulfport. He added that the Kirschman’s stores are between 40,000 and 80,000 square feet, which fits well with RTG’s retail footprint.
“I can say we are pretty excited about opening in New Orleans,” Seaman said, calling Kirschman’s president and CEO Arnold Kirschman a “savvy retailer” with stores in the right locations.
The purchase ends an era for the Kirschmans, a family that has sold furniture in the Big Easy for four generations.
Morris Kirschman, the grandfather of current president and CEO Arnold Kirschman, founded the business in 1914, peddling products door to door before opening his first store in New Orleans.
His son, Victor, joined the company in 1943 and added stores. Victor’s son, Arnold, continued the expansion.
Kirschman’s closed stores and temporarily moved its headquarters to Baton Rouge following Hurricane Katrina. But Michael Kirschman, the company’s executive vice president, said the storm had little to do with its decision to sell to RTG.
“Obviously since the storm, business has been very good,” he said. “We really weren’t considering this.”
Company representatives first met with Rooms To Go officials after the April market, Kirschman said.
“After considering it, negotiating and discussing it over the last 30 days, we felt this was a good deal for our employees and the New Orleans community,” he said, noting that RTG’s deep stock and fast deliveries are needed in the local marketplace. “They are a phenomenal organization that can support our employees and the entire community very well, so we felt it was a good time.”
Arnold Kirschman in a statement that in the past few months, “many national companies” had looked into the New Orleans market.
“Naturally, their attention focused on us as the dominant local company,” he said. “Rooms To Go recognized more than the others that this entire region is about to experience a tremendous growth spurt. They impressed us with their plans for operating in this community and convinced us that they would take the foundation that we’ve built to an even higher level.”
Under the deal, Kirschman’s will retain rights to its family name but can’t use it for a furniture retail operation. The company also will retain a New Orleans warehouse, which employs 70 people. The family may use the facility later to support a new business other than furniture retail such as furniture repairs or deliveries, Michael Kirschman said.
The Kirschman family also will retain three Ethan Allen stores in New Orleans, Pensacola, Fla. and Mobile, Ala.
“It’s emotional from the standpoint of our customers and the relationships we have built and the employees who have been with us for so long,” Michael Kirschman said. “That is why it was so important to have an organization with great integrity that will help the company grow.”
Seffner, Fla. based Rooms To Go is the nation’s largest furniture retailer with 102 stores in Florida, Georgia, North and South Carolina, Tennessee, Texas, Alabama and Puerto Rico. The Top 100 chain had sales of $1.6 billion in 2005.
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RTG to buy Kirschman's
Jun 25, 2006
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