Discount majors aim to boost furnishings
Carole Sloan -- Furniture Today, August 20, 2006
New York — Wal-Mart and Target were the only two discount department stores to make the Top 25 furniture and bedding ranks for 2005, with Wal-Mart still holding on to first place among all furniture retailers.
The Bentonville, Ark.- company — the world's largest retailer — had 2005 furniture and bedding sales of $2 billion, up 5.5% from 2004. The gains were spurred in part by a growing Internet business that is vastly different from its in-store merchandising approach.
Wal-Mart added 123 stores, mostly supercenters, as part of its corporate strategy to increase purchases and visits from customers shopping for food.
And Target, the Minneapolis, Minn.-based discounter, was fourth on the Top 25 Retail Giants ranking, only the second company in its class to make the Top 25 ranks. Target, with 89 new stores, saw sales in furniture and bedding increase 4.2% to $1.4 billion last year.
For both companies, the home business is one that is under close watch by senior management.
Wal-Mart is looking to upgrade its in-store furniture offerings as part of a storewide upgrade. It will be putting more emphasis on fashion, with more attention paid to display and presentation.
At the same time, Target has acknowledged that some of its moves in upgrading its home business, including parts of its furniture segment, need to be rethought. These include the Grand Bazaar program, which debuted in early 2004 with major success, especially in furniture, but did not do as well in 2005. The retailer also is making revisions to parts of the Thomas O'Brien collection for home.
The Big Two discounters accounted for 17% of the Top 25 furniture and bedding retailers' sales in 2005, the same percentage as in 2004.
Completing the Top 5 discount department stores, but not appearing on the Top 25 rankings, are Kmart, now part of Sears Holdings in Hoffman Estates, Ill.; ShopKo, Green Bay, Wis., which has been taken private by Sun Capital Partners; and Meijer, a family- run, Michigan-based company that revamped its home area in 2005.
With the conversion of 48 stores to the Sears Grand format, as well as major buying changes, Kmart's furniture sales dropped 4.8% to $400 million in 2005.
Kmart launched Essentials across home last year, including a strong furniture program. Additionally, the product development and buying arms of the company have been moved from New York and Troy, Mich., respectively, to corporate headquarters.
ShopKo's corporate transition and controversy impacted its business, with furniture and bedding sales dropping to $80 million last year, down from $82 million in 2004, a 2.4% decline.
With eight new stores, Meijer's furniture sales increased 5.3% to $79 million.
| Rank | Estimated furniture and bedding sales in $ millions | Total number of units at year's end | |||||
| 2005 | 2004 | Company, home base, notes | 2005 | 2004 | Percent change 2004 to 2005 | 2005 | 2004 |
| R = Revised 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 |
|||||||
| 1 | 1 | Wal-Mart, Bentonville, Ark. | $2,005.0 | $1,900.0 | 5.5% | 3,189 | 3,066 |
| Publicly held; fiscal year ended Jan 31. Sales and store counts are for U.S. stores only and exclude Neighborhood Markets and Sam's Club. Also sells online at walmart.com. Ended 2005 with 1,209 discount stores and 1,980 supercenters. Plans to open 22 net discount stores and 267 supercenters in 2006. Expects to remodel 1,300 stores by year's end to include a 20,000-square-foot or larger total home section, including furniture, textiles, housewares, small appliances, crafts and fabrics, home and office, outdoor living and seasonal products. Hard goods, including furniture and bedding, accounted for 19% of total sales in 2005 and 2004. Total 2005 sales were $209.9 billion, up 9.4% from $191.8 billion in 2004. | |||||||
| 2 | 2 | Target, Minneapolis | $1,365.0 | $1,310.0R | 4.2% | 1,397 | 1,308 |
| Fiscal year ended Jan. 28. Also sells online at target.com. Brands include the Signature collection from Renovations, a division of Thomasville Furniture, the exclusive Furio RTA brand, the Thomas O'Brien collection, Isaac in the Home by Isaac Mizrahi, and Global Bazaar, the chain's annual international home furnishings event. Partnering with California Closets to offer branded mudroom and bedroom storage systems. Building a 2 million-square-foot warehouse for imports in Savannah, Ga., scheduled for completion in summer 2007. Home furnishings and decor represented 20% of total 2005 sales. Comp-store sales increased 5.6% in 2005. Total 2005 sales were $51.3 billion, up 12.2% from $45.7 billion in 2004. | |||||||
| 3 | 3 | Kmart, Troy, Mich. | $400.0 | $420.0 | -4.8% | 1,416 | 1,480 |
| Fiscal year ended Jan. 28. Part of publicly held Sears Holdings Corp., which also owns Sears, Roebuck and Co. At fiscal year's end, Kmart operated 1,361 discount stores and 55 supercenters in 49 states, Guam, Puerto Rico and the U.S. Virgin Islands. Also sells furniture online at kmart.com. Closed a net 64 stores in 2005, including 48 stores converted to the Sears Essentials format. Discount stores average 92,000 square feet; supercenters average 165,000 square feet. Launched Martha Stewart Everyday in June 2005, featuring 20 ready-to-assemble furniture pieces for the bedroom, kitchen and dining room. Comp-store sales decreased 1.2% in 2005. Total 2005 sales were $19.1 billion, down 3.8% from $19.8 billion in 2004. | |||||||
| 4 | 4 | ShopKo, Green Bay, Wis. | $80.0 | $82.0 | -2.4% | 351 | 363 |
| Privately held; fiscal year ended Jan. 30. Taken private by investment firm Sun Capital Partners on Dec. 23, 2005, after months of multiple offers and shareholder dissent. Sales and store counts are for 135 ShopKo units and 216 Pamida stores, and exclude three ShopKo Express Rx stores in Wisconsin. ShopKo stores are in 15 Midwest, Pacific, Northwest and Western Mountain states; Pamida stores are in 16 Midwest, North Central and Rocky Mountain states. Remodeled 16 stores in 2005. In January 2006, sold its two Reno, Nev., stores to San Francisco-based SPI Holdings and Retail West. Total 2005 sales were $3.13 billion, down 1.2% from $3.17 billion in 2004. | |||||||
| 5 | 5 | Meijer, Grand Rapids, Mich. | $79.0 | $75.0 | 5.3% | 171 | 163 |
| Family-owned and operated chain celebrating its 72nd anniversary. Pioneered the supercenter concept. About two-thirds of its stores operate in Michigan, with the rest in Illinois, Indiana, Kentucky and Ohio. Opened a net eight stores in 2005, including six in Michigan. Plans to open five supercenters this year. All stores are open 24 hours a day and range from 200,000 to 250,000 square feet. Mark Murray joined the company as president in August 2006, replacing Larry Zigerelli. In July 2006, launched an aggressive "price drop" program to re-emphasize its low-cost reputation. Remerchandised and redesigned its home department in 2005. Total 2005 sales estimated at $14 billion. | |||||||
-
Wal-Mart, Target lead Top 5 discounters
Aug 24, 2008 -
Discounters: Some hold steady, others struggle
Aug 19, 2007 -
Target grabs No. 2 spot as sales grow 14.1%
Sep 4, 2005 -
Wal-Mart stays No. 1, Ashley jumps to third
Sep 3, 2006 -
Wal-Mart still king; Target shows strong gain
Sep 5, 2004
VIEW ALL GALLERIES
