Lifestyle specialists enjoy strong year
Carole Sloan -- Furniture Today, August 20, 2006
New York — Lifestyle furniture stores, those retailers that merchandise a casual, somewhat contemporary range of home furnishings, are assuming a stronger position in furniture retailing, and represent a new category in Furniture/Today's annual Retail Giants ranking.
The Top 3 players in this category rank on the Top 25 furniture and bedding retailers and together had furniture and bedding sales of $2.4 billion, up 10.4% over 2004, representing 10% of the Top 25. In an analysis of the Top 5 players, furniture and bedding sales amount to $3 billion in 2005, up 10% over 2004's sales of $2.75 billion.
Ikea, long a major player in furniture with its super-sized stores, leads the group. It is joined on the Top 25 by Pottery Barn, a division of publicly held Williams-Sonoma; and Pier 1 Imports, which has been struggling but now is in the midst of a major repositioning drive. Rounding out the list of Top 5 specialists are Crate & Barrel, which is expanding its base with younger consumers through its new CB2 format, and Cost Plus World Market.
Ikea had the strongest sales growth of the group last year, with a 17% increase in furniture and bedding sales to reach $965 million. The company focuses its efforts on dining, sleeping and living environments. A leader in global sourcing, Ikea continues to expand its U.S. presence, opening three stores last year.
Pottery Barn, with furniture and bedding sales of $720 million, was one of the key players in Williams-Sonoma's strong results last year. Both Pottery Barn and its offspring, Pottery Barn Kids, contributed heavily to the company's success, along with Williams-Sonoma and West Elm. Williams-Sonoma's three core brands — Williams-Sonoma, Pottery Barn and West Elm — had net revenue increases of 10.9% last year, and Pottery Barn and Pottery Barn Kids came in even higher.
PBteen, another new branch of the brand, also is expanding its reach in furniture.
Pier 1 Imports, recording essentially flat sales of $694 million in furniture and bedding, despite opening 28 new stores, is embarking on a new, more casual contemporary merchandise and marketing approach, moving away from its original signature look that has been emulated successfully by more downscale retailers.
With nine new stores, Crate & Barrel had a sales increase of 12.3% in 2005, hitting $365 million in furniture and bedding sales from its full-line home furnishings retail stores, catalog and Internet site. Its more promotional offspring, CB2, with two units, plans to open as many as three more stores in New York and on the West Coast.
Taking fifth place in the category, Cost Plus World Market's furniture and bedding sales increased 3.7% to $280 million, with the addition of 30 stores in 2005.
| Top 5 U.S. lifestyle furniture stores | ||||||
|---|---|---|---|---|---|---|
| Estimated furniture and bedding sales in $ millions | Total number of units at year's end | |||||
| Rank 2005 | Company, home base, notes | 2005 | 2004 | Percent change 2004 to 2005 | 2005 | 2004 |
| All sales information, except for that supplied by publicly held companies which break out furniture and bedding sales, are Furniture/Today market research estimates. All data are for calendar 2005 and 2004, unless otherwise noted. Source: Furniture/Today market research |
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| 1 | Ikea, Plymouth Meeting, Pa. | $965.0 | $825.0 | 17.0% | 24 | 21 |
| Fiscal year ended Aug. 31. Sweden-based specialty retailer sells primarily RTA furniture, which customers assemble with a tiny Allen wrench, and home accessories in over 235 stores in 34 countries. Sales and store count are for U.S. stores only, which are in the 250,000 to 300,000-square-foot range and typically feature 50-plus room settings, four model homes furnished with particular family profiles in mind, and nearly 10,000 items from furniture, lighting and accessories to cookware and full kitchens. Furniture and bedding accounted for about 48% of total sales in 2005. Total fiscal year sales were $2 billion, up 17.6% from $1.7 billion the previous year. Plans to open stores in Round Rock, Texas, this fall, in Draper, Utah, in spring 2007, and in Sunrise, Fla., and Portland, Ore., in summer 2007. | ||||||
| 2 | Pottery Barn, San Francisco | $720.0 | $640.0 | 12.5% | 268 | 263 |
| Fiscal year ended Jan. 29. Owned by Williams-Sonoma. 2005 sales growth in Pottery Barn's brands was led by strong performances in furniture and decorative accessories. In 2006, Pottery Barn Kids is improving its in-stock position on furniture and other categories, and is testing infant apparel. PBteen is expanding its furniture, bedding and jewelry storage assortments. In April 2006, Pottery Barn launched an outdoor living catalog, and will be opening Bed + Bath stores later this year. Williams-Sonoma, which also sells furniture through Williams-Sonoma Home, West Elm and its own stores, is testing in-house home delivery for its furniture hub operations on the East Coast, which so far has resulted in lower furniture return rates. Total 2005 revenues for Pottery Barn brands were about $1.7 billion, up 12% from about $1.5 billion in 2004. | ||||||
| 3 | Pier 1 Imports, Fort Worth, Texas | $694.0 | $690.0 | 0.6% | 1,150 | 1,122 |
| Fiscal year ended Feb. 25. Operates stores under the names Pier 1 Imports and Pier 1 Kids, with merchandise imported from over 40 countries. Much of its furniture is made of metal or hand-crafted natural materials, including rattan, pine, beech, rubberwood and selected hardwoods with either natural, stained or painted finishes. Also sells upholstered furniture. In July 2006, launched its Modern Craftsman collection, called Loft 21, featuring lifestyle furniture and accessories. Store displays are less cluttered, with vignettes showing how a room can be put together. Furniture and bedding accounted for about 42% of total 2005 sales. Total 2005 U.S. sales were $1.6 billion, down 3.4% from $1.7 billion in 2004. | ||||||
| 4 | Crate & Barrel, Northbrook, Ill. | $365.0 | $325.0 | 12.3% | 145 | 136 |
| Fiscal year ended Jan. 29. Subsidiary of German-based Otto Versand. Sells midpriced to high-end furniture primarily through its 51 furniture stores, catalogs and online. Also sells furniture in its two CB2 units in Chicago, which are more contemporary and geared to younger consumers. In 2005, opened five furniture stores, expanded CB2's furniture offerings to include upholstery, and launched a CB2 catalog. Furniture and bedding accounted for about 33% of total 2005 sales. Total 2005 sales were $1.1 billion, up 9.1% from $1 billion in 2004. Plans to end 2006 with 154 stores, with four furniture stores opening this fall in the metro markets of Charlotte, N.C., Kansas City, Mo., Los Angeles and New York/New Jersey. | ||||||
| 5 | Cost Plus World Market, Oakland, Calif. | $280.0 | $270.0 | 3.7% | 267 | 237 |
| Fiscal year ended Jan. 28. Operates under the names Cost Plus World Market and World Market, offering casual home furnishings, housewares, gifts, decorative accessories and gourmet foods and beverages imported from over 50 countries. Furniture includes RTA living room and dining room pieces, unusual hand-crafted case goods and occasional pieces, and outdoor furniture. Furniture and bedding accounted for about 29% of total 2005 sales. Total 2005 sales were $970.4 million, up 6.8% from $908.6 million in 2004. Plans to slow new-store growth to 25 units in 2006 to focus on remodeling selected existing stores, improving store layouts and developing plans for a smaller store format. | ||||||
