Ashley unveils retail concept
Envisions hundreds of smaller stores
By Gary Evans -- Furniture Today, February 15, 2010
LAS VEGAS —
Ashley Furniture unveiled a new retail model at the Las Vegas Market that the company said is unlike anything in the industry.
The full-line furniture source expects to launch hundreds of small concept furniture stores to be opened this year and next. Branding is in the copyright stage, but will not display the Ashley name, according to Kerry Lebensburger, Ashley's president of sales.
Lebensburger said the optimum size of the stores will be less than 5,000 square feet. But each still will contain a large amount of merchandise, using cantilevered vertical space and displays such as the “Hollywood Squares” format for smaller items such as chairs.
He said the new retail model will show a 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 product is value-oriented and is not expected to compete with the Ashley line, he said.
Some 40 sofas, for example, will each be priced at $399. Rugs will be at $99 retail, dining sets at $399, bedrooms (headboard, dresser and mirror) at $399, sectionals at $799, and so on. Each category will be grouped in a distinct area of the retail floor, with all the sofas together and so on.
“Most stores are set up as a room package store but this will be our anti-package store,” said Lebensburger, noting that Ashley expects to open 300 stores this year and another 200 next year.
He said the company is well on its way to meeting that target, with more than 100 of the packages in process.
The concept isn't limited to standalone stores, although initial prospects seemed to be favoring standalones. The concept can also be used within existing stores and other channels of distribution, such as warehouses that are only open for retail on weekends.
Ashley officials said the new small-format stores can be stocked for as little as $17,500.
The concept will be similar to brands like Build-A-Bear and American Girl, which have cult-like following 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 where credit promotions have been a standby, the new stores will favor 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 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 plus of the concept is that the cost of doing business can be held down with low rents — many markets have plenty of available space and landlords are willing to negotiate.
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Ashley's new retail concept
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