City sets 7th Ashley unit
To take over Modernage location
By Clint Engel -- Furniture Today, April 30, 2007
Fort Lauderdale, Fla. — City Furniture is buying the Modernage location here to open another Ashley Furniture HomeStore late this year.
City President Keith Koenig said the company paid $7 million for the property and will spend another $4 million to renovate the building for a 52,000-square-foot HomeStore in "a challenging but good location."
All seven Modernage stores in Florida will close after going-out-of-business sales are completed, according to parent company Leath Furniture.
The Fort Lauderdale unit will be the seventh HomeStore for the 21-store City, unless another HomeStore location the retailer is working on moves forward quickly, Koenig said. The company is negotiating for both City and Ashley stores in Boca Raton, Fla., and in greater Miami and also is seeking government approvals for stores on Florida's Gulf Coast, in Fort Myers and Naples.
City still plans to operate 14 Ashley HomeStores in South Florida, but because of real estate, permitting and other delays, the opening process has taken longer than Koenig had hoped. At one point, the company had hoped to have all the stores open by this year.
Despite a weak housing market in Florida, commercial real estate prices are still "staggering," Koenig said. He added that government permitting and other approvals have slowed some projects.
But this hasn't curbed his enthusiasm for the concept. City opened its first HomeStore in March 2005, and while he said he could be "a whole lot happier with revenues right now" because the business climate remains soft, the HomeStores have remained solidly profitable.
"I'm Ashley's biggest fan," Koenig said. "I know where the company is and where it's going, and I think they have the best company in the business by far."
Overall, City did a little more than $342 million at its stores last year, less than it expected, but above its $335.1 million in sales in 2005. The company shoots for annual sales of $10 million to $15 million at its HomeStores and sometimes more, Koenig said.
