Top 100 Furniture Stores grew sales 6.4% in 2011
Clint Engel -- Furniture Today, May 22, 2012
HIGH POINT — It took a while to get here, but 2011 was the year big retail survivors of the credit crunch and a drawn-out industry recession saw sales momentum building, thanks in part to a vital bedding segment and a group of lifestyle retailers on the march.
Furniture, bedding and accessories sales for Furniture/Today's Top 100 U.S. Furniture Stores increased for the second year in a row - this time by 6.4% to $28.4 billion.
What's more, the store count for the Top 100 registered its first increase since a small gain in the 2009 report. The combined store count for this year's companies grew by 1.3%, or 115 units, to 8,684 stores.
Sales growth in 2011 topped the 5.7% increase for the Top 100 companies on last year's list, which was the first gain since the anemic 0.5% growth in 2008 (based on 2007 sales).
Indeed, the 6.4% gain far outpaced the estimated 1.7% increase in furniture, bedding and accessories sales for all U.S. furniture stores, which grew to $42.7 billion. The difference helped the Top 100 grow its market share for all furniture stores to 67%, compared with 62% for the companies on the previous year's list.
Last year's Top 100 companies were on the rebound from a massive consumer pullback and depressed housing market. This year's group, however, appears to have found a recipe for sustained success - or at least growth. That broad scale increase does not surprise industry analyst Jerry Epperson.
"It reflects what was happening during the recession, when we lost so many of our smaller stores, especially at the higher end," said the managing director of Richmond, Va.-based Mann, Armistead & Epperson. "They couldn't continue to hang on so it just caught up with them."
Meanwhile, larger stores in almost every market - Top 100 types - saw an opportunity to gain market while the going was tough and because of the loss of so many smaller players.
More than three quarters of the retailers on this year's list, 76, posted sales increases in 2011, slightly better that the 71 gainers on last year's list and a huge turnaround from the 18 increases the year before. This time, only 18 companies posted sales decreases.
More Top 100 companies were in growth mode, too, as 41 reported net gains in store count, including three that grew store count by double digits and two - No. 9 Sleepy's and No. 10 Mattress Firm - who grew by triple digits. Most of the others on the list grew cautiously, by two or three stores, while 23 companies this year trimmed their store counts.
For the second consecutive year, the cutoff for making the Top 100 ticked up, this time to $38.6 million from $38.4 million for last year's list. No. 100 Marlo Furniture made the cut despite a small sales decrease for the four-store, greater Washington, D.C.-area retailer.
For the sixth consecutive year, the Ashley Furniture HomeStores dedicated network of licensed and company-owned Ashley stores took the No. 1 spot on the list as sales grew 12.2% to $2.6 billion and U.S. store count grew by a dozen units to 434 stores. Its net sales gain of $292 million also topped all Top 100 companies.
The HomeStores' sales increase was just a tick smaller than the network's 12.4% increase the previous year despite opening a net nine fewer stores. That speaks to the strength of many of the Top 100 companies that operate HomeStores. Seven of them had sales increases that rank among the top 15 on the list, including No. 78 Broad River Furniture, with sales up nearly 25% last year to $66.4 million.
The Top 10 on this year's list again outgrew the Top 100 as a whole, increasing sales 7.4% to $13.8 billion, while growing store count 8.1% to 4,053 units. That store-count gain was thanks largely to the two bedding specialty retailers on the Top 10.
No. 10 Mattress Firm bumped No. 11 La-Z-Boy Furniture Galleries from the Top 10 and posted the greatest percentage sales increase and the greatest net store growth of any Top 100 company.
Houston-based Mattress Firm, which went public late last year but remains majority owned by a private equity firm and senior management, grew sales 39.2% to $831.2 million. It added a net 181 stores for a total of 855 units by the Jan. 31 end of its fiscal year. This is the second year in a row Mattress Firm led all companies for increase in net store count.
Part of the growth came from new franchised stores but also through the acquisition of 55 Mattress Giant stores in Atlanta, St. Louis and Minneapolis. (This year, the retailer acquired the rest of Mattress Giant's assets on May 2, including about 180 more stores in Texas and Florida.)
No. 9 Sleepy's was no slouch either, growing its store count by a net 115 units to 809. The Hicksville, N.Y.-based chain also acquired some Mattress Giant stores last year, 67 units in New England. Sleepy's net store growth was not only second best among the Top 10, it was second best among all Top 100 companies.
There was only a little more movement in the Top 10. No. 6 Raymour & Flanigan traded places with No. 7 American Signature, as Raymour grew sales 3.8%, breaking $1 billion for the first time, while American Signature's sales decreased 12.2% to an estimated $965.8 million - dropping under the $1 billion mark.
Another standout on this year's list is No. 18 Art Van, which slipped one spot in the ranking but posted the best percentage gain in store growth. The Warren, Mich.-based retailer's store count nearly doubled to 68 stores, thanks in part to the opening of three more Art Van PureSleep bedding stores, the acquisition of the 29-store Mattress World of Howell, Mich., and Art Van's first, full-line mall store in Auburn Hills, Mich.
Just like last year, there are four newcomers to the list, including Winfield, W.Va.-based Innovative Mattress Solutions. The bedding specialty retailer - doing business as Sleep Outfitters, Mattress Warehouse and Mattresses Unlimited - debuts at No. 68 with estimated sales of $80 million at 120 stores.
Innovative Mattress, which operated stores in West Virginia, Ohio, Indiana and Kentucky, acquired Nashville, Tenn.-based Mattress Unlimited this past October, boosting its Louisville, Ky., presence and giving it entry into Tennessee. And this April, the retailer moved into Alabama with the acquisition of 19-store Mattress King.
Entering at No. 80 is yet another bedding retailer - American Mattress of Elmhurst, Ill., with stores in Chicago and elsewhere in Illinois, Indiana and Wisconsin. The Serta and Tempur-Pedic retailer added a net four stores and generated 2011 sales of $63 million last year, up 14.5% from the year before.
At No. 97, Knoxville, Tenn.-based Knoxville Wholesale Furniture made the Top 100 for the first time on a 9.4% sales increase to $39.6 million. The four-store retailer, which operates two Knoxville Wholesale Furniture stores, a clearance center and an Ashley Furniture HomeStore, more than doubled the size of its clearance center in 2011 by moving into a 112,000-square-foot former Kmart building, where, among other things, it added Ashley's Furnish 123 retail concept to the space.
The final newcomer is No. 98 Wellsville Carpet Town of Weston Mills, N.Y. The 10-store promotional to midpriced retailer added two stores this past year with the acquisition of the Ashley Furniture HomeStores in Altoona and Johnstown, Pa., previously operated by R.H. Kuhn's Roomful Express Furniture.
Pittsburgh-based Roomful Express was placed in receivership in December 2010 and subsequently shut down. It's one of the four retailers that fell off the Top 100 this year.
The others were Lack's of Victoria, Texas, which filed for bankruptcy and liquidated; Fort Myers, Fla.-based Robb & Stucky, which filed for bankruptcy, closed down, and then was reincarnated as Robb & Stucky International; and Pilgrim Furniture City, the Southington, Conn.-based retailer that was No. 97 on last year's Top 100 and just missed the cut for this year's list.
Bedding Experts, No. 99 on last year's list, is now part of No. 56 Back To Bed/Bedding Experts/Mattress Barn. In November, the Itasca, Ill.-based company's acquired Mattress Barn - the retail subsidiary of manufacturer Advanced Sleep Concepts - with stores in central Florida and along Florida's east coast.
Perhaps another sign of improving business conditions is better results in two of three store performance categories.
Median sales per square foot for the Top 100 was $225 based on 42 company estimates. That ended a multi-year drought in sales-per-square-foot improvements and easily bested the $210 median for last year's Top 100. Indeed, it was the best performance since the $233 median for the Top 100 companies reporting on the 2009 list.
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