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Stores dare to try new formats

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NAPLES, Fla. - Four retailers described their cutting-edge store formats to Furniture/Today Leadership Conference attendees, designed to tackle big city business, small city business and consignment business.
     Larry Klaben, president of Dayton, Ohio based Morris Furniture, addressed the big city market, discussing the Top 100 company's two Morris Home Center furniture mall stores in the Cincinnati area.
     Terry Oates, president of Evansville, Ind.- based King's Great Buys Plus, offered the small town view of an electronics and appliance business that recently boosted both sales and profits by adding a targeted bedding and furniture offering.
     Doug Wolf of Bellwood, Pa.-based Wolf Furniture showed how his Allegheny Furniture Consignment & More store is freeing up space in consumers' homes and is boosting sales at Wolf's conventional stores, and Michael Bay of Merinos Home Furnishings talked of his rise from poverty in eastern Turkey to success in Mooresville, N.C., where he operates one of the nation's largest furniture stores in what was an abandoned textile mill.
     "Five years ago, we embarked on a voyage to reinvent our company," Klaben said.
     "Consumers wanted a retail proposition that was easy and exciting and, more importantly, one that could save them both time and money," he said.
     Morris created Mor
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ris Home Centers - ranging from 110,000 to 140,000 square feet - offering five stores under one roof: an Ashley Furniture Home- Store, the Sealy-exclusive Better Sleep Shop, a multi-line Morris Home Furnishings, the Morris Big TV Store, and the Morris Backroom bargain outlet.
     The company's two centers have been successful. Klaben said the Better Sleep Shops, for example, are doing between $400 and $700 per square foot in their 5,000- square-foot spaces.
     Morris introduced each center in a multimedia campaign. Now, Klaben said, each store is drawing its own traffic, and customers then cross shop at the neighboring stores.
     Oates, who owns King's Great Buys Plus stores in Indiana and Kentucky and is part-owner in a network of Great Buys stores, said the small towns in which he operates may lack big box stores such as Morris, but small town consumers still crave selection. So Great Buys aims to offer everything, using the tagline: "Only our best sellers, only our lowest prices."
     For years, Oates was working to improve the electronics and appliance business for his partners, but as Great Buys took in new members - some with bedding and furniture businesses - he began to take note of furniture's healthier margins.
     Oates said he focused on the best brands in the market, he said, going after bedding first with sources such as Tempur-Pedic and Serta, just as Serta's iComfort line was heating up.
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     "As we started to attack that, our bedding business increased fivefold in a period of six months," he said.
     In furniture, where brand names aren't as important, Oates wanted to give consumers the one thing his competitors were not offering - customization, introducing a 4,500-square-foot Klaussner Solutions Studio in his Evansville store this year.
     Oates said that adding furniture and bedding has helped the retailer double its bottom-line results. He predicted more appliance and electronics retailers will move into the categories, adding that those retailers are accustomed to the higher margins and "that's a slippery slope for a lot of us."
     "We want to make sure that this industry doesn't become the same victim that the electronics business has become," Oates said. "I hope we all can protect the opportunity in front of us."
     Wolf, president of both Wolf Furniture and Allegheny Furniture Consignment, said his 30,000-square-foot consignment store in Harrisburg, Pa., helps the consumer answer a key question: "How can we get something out of our existing furniture?"
     Allegheny gives consumers a 50-50 split on sales once their items sell, which makes money for Wolf while clearing whole rooms of furniture so consumers can buy new merchandise from the Top 100 company.
     Wolf said consignment stores require far less than traditional furniture stores in capital expenditures and have a built-in inventory that doesn't have to be paid for until the goods are sold.
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     He said that before Allegheny opened, Wolf salespeople were already fielding questions about consignment shops from consumers. Now, they can refer shoppers to Allegheny.
     Wolf said that of the first $370,000 in Allegheny's consignment sales, 68% were from Wolf's existing customers. He estimated that would lead to potential additional sale of $131,000 for the retailer's conventional stores.
     Allegheny has since passed the $1 million sales mark, and Wolf is looking for it to do $2.5 million annually. If that turns out to be the case, Wolf estimated the Allegheny connection could result in additional Wolf Furniture sales of nearly $900,000 a year. Indeed, sales gains at the Wolf stores operating near the consignment store are up 57% over Wolf stores in other markets through October.
     Merino's Michael Bay chose to talk mostly about his humble beginnings as one of nine children, born in a small Turkish village, so close to the border "that if my mother had hiccupped I could have easily been from friendly Syria," he said.
     Even as a child, his mission, he said, was to help bring a better life to his impoverished family. He made his way to London, where he worked as a dishwasher in a restaurant and eventually came to the United States, where he bought an old van, which he drove across country, selling wrought iron furniture and other home furnishings to furniture stores, designers, garden shops, anyone who would buy.
     "My one condition to myself," he said, "I would never go back to my warehouse until I had completely sold the load."
     Eventually, Bay opened what would become Merinos, with three stores in Georgia and the Carolinas, including his newest 1.1 million-square foot facility in Mooresville, N.C.
     All stores were developed from old mill properties with an emphasis on "efficiency, efficiency, efficiency," he said.

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