Labor Day sales strong
But retailers still unsure about rest of year
By Clint Engel -- Furniture Today, September 10, 2006
High Point — Retailers across the country reported decent to strong Labor Day weekend results, but most were unwilling to call it the start of a much-needed upward swing for the industry.
Those retailers that already were having solid years mainly credited their own sales efforts for the good holiday, rather than any big-picture economic factors bringing the customer out.
Aggressive promotions typically included no-interest, no-immediate-payment incentives as well as discounts and other offers. While those moves drove traffic and sales, higher interest rates and gas prices linger as concerns that could dampen furniture purchases at least through the rest of this year.
W.S. Badcock, the 318-unit Mulberry, Fla.-based chain, saw a 12% increase in sales this Labor Day over last year. Bill Pou, executive vice president of retail operations, attributed the spike to a new initiative to revamp Badcock's supply chain.
In August, the retailer cleaned out inventory and freed up space at its four distribution centers.
"We had a whole month-long process of identifying those products, reducing the prices and moving them out," he said. It paid off with "an increased velocity of sales."
Some stores along the southeastern coast of Florida were closed early in the week before Labor Day because of Tropical Storm Ernesto, Pou added.
For Salt Lake City-based R.C. Willey, a new store in the Sacramento, Calif., market helped drive overall sales to a double-digit increase for the three-day weekend over the same period a year ago. Excluding the new store, same-store sales were up in the low double digits, said Jeff Child, president of the 14-store chain, part of Berkshire Hathaway's furniture division.
"As always, some stores did better than others, but overall we were happy," he said.
R.C. Willey's promotion included the offer of a combination VCR/DVD player for $39 to customers who spent at least $499. As usual, the retailer provided free food — hot dogs — for shoppers and advertised heavily.
Child said the holiday was consistent with the way business has been all year: "good but not outstanding."
"With gas prices and political (issues), including elections coming up, I don't see it changing a lot fairly soon," he said. "We're optimistic for the long run, but I think the next couple of months could be pretty tough."
Simon Kaplan, president of eight-unit Value City Furniture, based in Dayton, N.J., said his holiday promotions "went pretty good" despite "damp and gray" weather.
"Labor Day, historically, is one of our better holidays," Kaplan said. He promoted a sale including an extended payment plan of three years, bringing a lift to an otherwise "flat" year.
In addition to the poor weather and lackluster economy, Kaplan noted the competition is getting tougher.
On an up note, Kaplan said he soft-opened his first Ashley Home Store two weeks ago in Millville, N.J., and did "pretty good" with Labor Day promotions there.
John Disa, CEO of 34-store Wickes Furniture of Wheeling, Ill., said Labor Day weekend business was solid and "we're very pleased."
Wickes aggressively promoted two credit options — no-interest (but with payments) until 2011 and no interest, no payments until 2008. That was on top of strong product values, he said. The cover of the retailer's circular promoted a free loveseat with a sofa purchase.
Disa wouldn't put a percentage increase on sales, but said business for Wickes, with stores in Chicago, Los Angeles, Minneapolis and Portland, Ore., was up for the long weekend.
Still, like many furniture retailers across the country, business overall this year has been spotty, he said. And uncontrollable outside influences on the consumer — higher interest rates, a cooled housing market and higher fuel costs — remain a challenge.
That said, Disa added that he's hoping for a good fall. "We're certainly postured for a strong season, but we're cautiously optimistic given the external environment."
Atlanta-based Havertys, with 119 stores in 17 states, reported a positive Labor Day weekend on top of solid business all year. The company posted a 10.3% same-store sales increase in August, with total sales up nearly 13% to $77.1 million.
President and CEO Clarence Smith said September "is off to a very good start as total written business for the first four days, which included the Labor Day weekend, is up by a mid-teen percentage."
Tom Curran, Havertys' senior vice president of marketing, said the company didn't do anything unusual for the holiday weekend and was a bit surprised by the strong results given some of the negative industry comments going into the holiday.
Smith said Havertys believes its proprietary Havertys Collections brand is connecting with its target consumer, and this combined with a better in-stock position were factors in the recent strong sales performance.
Havertys' Labor Day promotion included a no-interest offer until 2009 as well as reduced prices in categories such as upholstery, bedroom and bedding. In bedding, the retailer offered a king set for the price of a queen.
"We're just sticking with our plan, "Curran said. "We know the main thing we've got to do is present a better value to the customer every day."
Thomasville Home Furnishings dealer Brad Emanuel, with two stores in the Chicago market, described Labor Day business as "great." He said Thomasville's new Hills of Tuscany collection was on the floors and did well.
The retailer led into the weekend with a preview sale for preferred customers, which was well received, Emanuel said.
Likewise, Grand Home Furnishings' Winchester, Va., store had a "great weekend," beating expectations and last year's results, said Scott Carroll, store manager. Grand promoted a tiered no-interest financing offer — extending the terms for larger purchases — as well as 10%-off coupons. The store did especially well in bedding and upholstery, Carroll said.
He was more optimistic than most about the fourth quarter, saying he expects it to be "fantastic." He said Grand has boosted its advertising spending, which is helping in a tough retail environment.
| Acknowledgements | ||
| Leather Editor Joan Gunin and Staff Writer Heath E. Combs contributed to this story. | ||
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Labor Day sales strong
Sep 11, 2006
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