Crate & Barrel evolves with new formats, goods

Carole Sloan, September 4, 2006

Crate & Barrel has become a retailing leader since its humble beginnings 44 years ago, and the company now has 145 stores and total sales of $1.1 billion, up 9.1% from its '04 sales. Furniture sales were $365 million in 2005, up 12.3% from 2004.

The first Crate unit was a 1,700-square-foot store in a former elevator factory in downtown Chicago.

In 1968, the second Crate store opened. In 1973, the company started its catalog business and, in 1999, expanded its direct-to-consumer activity with a Web site.

In 1985, the company's strongest growth began with both mall and freestanding stores. In 1989, the first dedicated furniture store opened, along with an expanded housewares format.

In 2001, three years after becoming a subsidiary of Germany's Otto Versand, Crate bought a half interest in Land of Nod, a children's furnishings catalog company.

CB2, a new concept store for younger, more contemporary customers, was launched in Chicago in 2000. The concept has been the subject of several revisions and reevaluations, leading to the recently announced plan to open about three new units over the next year or so, including one in New York and another possibly on the West Coast. CB2 now has a completely separate assortment from the regular Crate & Barrel stores, a departure from the original approach.

Each business also has its own Web site capable of taking and fulfilling orders.

CEO Gordon Segal is a strong advocate of renewable and recyclable products for his stores. During the spring, the retailer ran a major promotion across the country featuring renewable bamboo furniture. The bamboo used for the furniture, Segal said, "is a plant, not a tree and it grows 12 feet a year."

The company also is working with TFT Trust, a British organization that certifies chains of supply and "they know the origin of the wood log by log," according to Segal.

He added that "we are working very hard to use merchandise made from a controlled supply source. We're trying to show some leadership in this area."

The efforts are in line with the philosophy of parent company Otto Versand, which is well known as an ecologically friendly retailer.

The goal, Segal related, is to be as eco-friendly as possible. By the end of 2006, "a lot of product out of the Far East should be certified by TFT — maybe 20%, but I would hope 40% to 50%," he said.

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