Share this on

Leading lifestyle specialist Ikea records big sales gain

Carole Sloan -- Furniture Today, August 19, 2007

New York — Lifestyle furniture stores continued to have a major merchandise and marketing impact on the furniture industry in 2006, even as some of the Top 5 in the category struggled with their own direction.

As the furniture and bedding universe increased 6% overall, Top 5 lifestyle specialists grew their sales 7% to a total of $3.3 billion. This enabled the lifestyle specialists to capture 13% of the total market for furnishings, the same share as in 2006.

This year, Crate & Barrel joins the Top 25 ranking with furniture and bedding sales of $480 million in 2006, up 10.3%, with 153 stores, versus 125 in 2005. Crate & Barrel plans to open its first CB2 store in New York's Soho district next month.

Leading the lifestyle group in sales increases was Ikea with a gain of 23.8%, bringing 2006 furniture and bedding revenues to $1.2 billion. The company added four stores in the United States last year, part of its strategy to increase its American presence over the next few years.

Cost Plus World Market, ranking fifth among lifestyle specialits, added 20 stores and raised its furniture and bedding sales to $295 million, up 5.4%.

Taking second place in the lifestyle home furnishings category was Pottery Barn, which sells through stores, Web sites and catalogs. The retailer saw furniture and bedding sales increase 4.9% in 2006 to $755 million, with 12 new stores added to the mix. The gain was quite a bit smaller than that of 2004–05, when Pottery Barn scored a 12.5% increase.

This reflects some of the new competitive challenges the Williams-Sonoma division faces from more mainstream retailers and manufacturers.

Pottery Barn, which includes PBteen, Pottery Barn Kids and Pottery Barn Bed & Bath, is Williams-Sonoma's biggest brand. Williams-Sonoma also sells higher-end furniture through Williams-Sonoma Home and youth-oriented contemporary furnishings through West Elm.

The most troubled of the lifestyle group is Fort Worth, Texas-based Pier 1 Imports, which has undergone a major management transition and announced plans for radical changes, including the closing of the company's Pier 1 Kids division, clearance centers, and e-commerce and catalog businesses.

At year end, Pier I already had shuttered 31 stores, and furniture and bedding sales fell 15.4% to $587 million.

Top 5 lifestyle furniture stores
Rank			Estimated furniture and bedding sales in $ millions			Total number of units
2006	2005	Company, home base, notes	2006	2005	Percent change 2005 to 2006	2006	2005
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 2006 and 2005, unless otherwise noted. Source: Furniture/Today market research
1	1	Ikea, Conshohocken, Pa.	$1,195.0	$965.0	23.8%	28	24
		Fiscal year ended Aug. 31. Sweden-based specialty retailer with a large ready-to-assemble furniture business operating more than 250 stores in 34 countries. Sales and store count for U.S. only. Stores range in size from 250,000 to 350,000 square feet and generally feature 50+ inspirational room settings, four model homes reflecting a variety of living situations, and some 9,500 products from furniture, lighting, textiles and decorative accessories, to cookware and kitchen cabinets and appliances. Furniture and bedding accounted for about 48% of total 2006 sales. Total fiscal year sales were $2.5 billion, up 25% from $2 billion for the previous fiscal year. Is opening three to five stores a year in the U.S. This fall, will open in Sunrise and Orlando, Fla., and in spring 2008, will open in West Chester, Ohio and Brooklyn, N.Y.
2	2	Pottery Barn, San Francisco	$743.0	$720.0	3.2%	280	268
		Fiscal year ended Jan. 28. Owned by Williams-Sonoma. Operates through retail stores, catalogs and e-commerce websites under the Pottery Barn, Pottery Barn Kids, PBteen and Pottery Barn Bed + Bath brand names. Pottery Barn is Williams-Sonoma's largest brand, accounting for almost half of the companies revenues. Sales fell substantially short of expectations in 2006 for the brand, making the revitalization of Pottery Barn a key focus for the company. Williams-Sonoma will focus on brand positioning for Pottery Barn, new product introductions, remerchandising its mid-size stores, and the value to consumers. Total 2006 revenues for the Pottery Barn brands were approximately $1.8 billion, with Pottery Barn's net revenues increasing 1.8%, Pottery Barn Kid's up 11.5%, and PBteen's revenues up 14.5%.
3	3	Pier 1 Imports, Fort Worth, Texas	$587.0	$694.0	-15.4%	1,119	1,150
		Fiscal year ended March 3. Specialty retailer selling a wide variety of furniture, decorative home furnishings, dining and kitchen goods, bath and bedding accessories and other specialty items for the home imported from over 50 countries. Is in the process of a major overhaul of its merchandising and marketing with more of a back-to-basics approach. Closed 24 clearance centers by end of July, will close ecommerce and catalog operations by August 31 and Pier 1 Kids stores by the fall. Furniture and bedding accounted for about 39% of total 2006 sales, down from about 42% in 2005. Total 2006 U.S. sales were $1.49 billion, down 9.4% from $1.65 billion in 2005.
4	4	Crate & Barrel, Northbrook, Ill.	$480.0	$435.0^R	10.3%	153	145
		Fiscal year ended Jan. 28. Subsidiary of German-based Otto Versand. Lifestyle specialty retailer focused primarily on contemporary and transitional home furnishings operating through stores, catalogs and online. Sells midpriced to high-end furniture largely through 55 metro-market furniture stores as well as through its two CB2 units in Chicago, which are geared to a younger, more contemporary consumer. Stores also carry housewares, decorative accessories, wall decor, rugs, decorative pillows, accent pieces, lighting, garden, and bed and bath textiles. Will open a CB2 store in the SoHo district in New York this fall, and its first store in Canada in the fall of 2008. Furniture and bedding sales accounted for about 40% of total 2006 sales. Total 2006 sales were $1.19 billion, up 7.6% from $1.11 billion in 2005.
5	5	Cost Plus World Market, Oakland, Calif.	$295.0	$280.0	5.4%	287	267
		Fiscal year ended Feb. 3. Specialty retailer of casual home living and entertaining products in 34 states under the names World Market, Cost Plus World Market, Cost Plus Imports and World Market Stores. In addition to furniture, stores offer home decorating items such as rugs, pillows, bedding, lamps, wall décor, window coverings, frames, candles and baskets as well as tabletop and kitchen products, gourmet foods and beverages. Is continuing to adjust its furniture assortment moving away from high-ticket, large furniture pieces, to a greater reliance on accent pieces. Is cross-merchandising its home accent pieces to more areas of the store to try and boost home sales. The retailer wants to reestablish itself as the place for unique and authentic gifts, accent pieces and collectibles at affordable prices. Furniture and bedding sales accounted for about 28% of total 2006 sales. Total 2006 sales were $1.04 billion, up 7.2% from $970.4 million in 2005.

Share this on

Ikea maintains top lifestyle specialist spot

Aug 24, 2008

Lifestyle specialists enjoy strong year

Sep 3, 2006

Also by this author

Also by Carole Sloan

Featured Company

Surya

For more than 30 years, the name Surya has been synonymous with high quality, innovation and luxury. Our Fall 2009 collections are no exception. Our designers have masterfully created some of the most cutting edge and versatile pieces to date. Encompassing... more