Ashley's new retail concept

Hundreds of stores could open in 2 years

Gary Evans -- Furniture Today, February 3, 2010

LAS VEGAS — Ashley Furniture is unveiling a new retail model here that the company says is unlike anything in the industry.
The full-line furniture source expects hundreds of stores to be opened using the concept this year and next year.
As yet unnamed, the retail model is set around a full range of product - from case goods and upholstery to add-ons such as rugs, throws, pillows and top-of-bed - with each category merchandised at a single price point.
The one-price-fits-all pricing includes some 40 sofas, all at $399; rugs at $99; dining sets at $399; bedrooms at $399 (headboard, dresser and mirror); sectionals at $799; and so on. The categories will be grouped in distinct areas of a retail floor, with all the sofas together, all the occasional tables together, and so on.
"Most stores are set up as a room package store but this will be our anti-package store," said Kerry Lebensburger, president of sales for Ashley. "We expect to open 300 stores this year and another 200 next year."
The company was well on its way to meeting predictions Tuesday, with more than 100 of the packages in process, according to Lebensburger.
The concept isn't limited to standalone stores, although initial prospects seemed to be favoring standalones. The concept can also be used in existing stores and other channels of distribution, such as warehouses that are only open for retail on weekends.
Ashley officials said the new model can be done in less than 5,000 square feet and that the initial investment can be as low as $17,500.
The concept will be similar to brands like Build-A-Bear and American Girl, which have cult-like followings among consumers who enjoy putting their own packages together. With the Ashley model, the idea is to draw consumers in for sofas, bedrooms and other core categories, and then build sales tickets with add-ons like top-of-bed, rugs and occasional.
Ashley will back up the concept with a Web site, signage, point-of-purchase materials and other merchandising efforts.
And in an industry of no-no-no credit promotions, the business will be mainly a cash-up-front approach, with money collected when the merchandise is ordered. If credit cards are accepted, the consumer would pay extra to cover the cost of the transaction.
The program is in-stock, so delivery to the consumer should be within a week, Lebensburger said.
What could be considered as a prototype store is in Pottstown, Pa. where 30-year-old Robert Coles, working with Ashley, has opened a freestanding 3,800-square-foot space in a mall. Merchandise ordered arrived on a Monday and the store began operations that Friday. Coles plans to open similar outlets.
Lebensburger said that the stores can be run by one person, with maybe two on the weekend. He added that another key advantage of the concept that can hold down the cost of doing business is low rents - many markets have plenty of available space and landlords are willing to negotiate.