Ikea leads pack in '07 growth
By Clint Engel -- Furniture Today, June 8, 2008
HIGH POINT — Ikea’s solid sales growth and steady expansion stood out in a year of tough times for the Top 100, as the Swedish home furnishings giant took the crown for the fastest-growing furniture store among the group.
Ikea showed up in the Top 10 of three of five measurements used to determine the fastest-growing stores of 2007. This strong performance helped the chain, with 31 U.S. stores, jump one spot to No. 2 on the Top 100 with $1.79 billion in furniture, bedding and accessories sales in its fiscal year ended Aug. 31, overtaking Seffner, Fla.-based Rooms To Go.
One of four companies repeating on the index of the Top 10 fastest-growing furniture stores, Ikea opened three stores in its fiscal year — in greater Austin, Texas, and the Salt Lake City and Portland, Ore., areas. Already this fiscal year, the retailer has opened two Florida stores and a Cincinnati-area store and has another opening this month in Brooklyn, N.Y.
Ikea led all but No. 1 Ashley Furniture HomeStores in net sales volume growth — up $230 million to Ashley’s $395 million increase. Ikea also had the sixth-greatest percentage increase in sales, up 14.7%; and the seventh-best equivalent-store-sales growth, up 4%.
Equivalent-store sales is a variation of same-store sales developed by Furniture/Today for this report. It’s calculated by subtracting the percentage change in a retailer’s net store count from its percentage increase in sales. Companies that posted an increase in sales but a decrease in units were not included.
Ikea didn’t show up in the Top 10 on net unit growth nor percentage increase in store count. But it should be noted that when Ikea does open stores, they are in the 350,000-square-foot range. Also, given the generally poor growth rate of the Top 100 this year, Ikea’s standings in these categories were pretty strong — the 18th-greatest increase in units, though it opened only three stores, and 22nd-greatest percentage increase in units.
Last year’s fastest-growing index featured four bedding specialty chains, including two at the top — The Sleep Train and Mattress Firm. This time, there are only two bedding specialists on the Top 10 index, and neither The Sleep Train nor Mattress Firm made the cut.
They were muscled out by the better performance of mainly conventional and specialty stores, including Bob’s Discount Furniture, the second-fastest growing retailer on the index.
The Manchester, Conn.-based Bob’s, No. 20 on the Top 100, led all stores with a 19.6% increase in equivalent-store sales and a 27% increase in sales. Bob’s also had the fifth-highest net volume increase, up $88.8 million to $418.1 million in 2007.
Majority owned by private equity firm Saunders Karp & Megrue, Bob’s added a net two stores last year for a total of 29 in Connecticut, Maine, Massachusetts, New Jersey, New Hampshire, New York and Rhode Island.
Bob’s was followed on the index by Northeast neighbor Raymour & Flanigan of Liverpool, N.Y., which showed up in the Top 10 for the same three measures. Raymour had the fourth-best equivalent-store sales gain (up 8.7%) and net volume gain (up $101.2 million). Its percentage sales gain was eighth best in the Top 100, up 13% to $881.8.
Raymour’s net three stores opened last year weren’t enough to register in the top unit-growth measures, but next year should be a different story. The 73-store retailer
is taking on 12 Northeastern leases from the bankrupt Levitz Furniture with plans to open all of the locations this year. New stores also are on tap for Phillipsburg, N.J.; Patchogue, N.Y.; and Warwick, R.I.
No. 4 on the Top 100, San Francisco-based Williams-Sonoma was also No. 4 on the fastest-growing index, with the third-best net sales increase in furniture, bedding and accessories — up $115 million — and the fifth-best equivalent-store sales gain (up 7.6%) behind Raymour & Flanigan.
The 600-store company includes the parent brand as well as Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home, selling through bricks-and-mortar locations as well as related online and catalog businesses. Its $1.45 billion in furniture, bedding and accessories sales accounted for more than 35% of its nearly $4 billion in total revenue last year. Furniture alone accounted for about 30% of total sales.
With plans to add a net 29 stores this year, Williams-Sonoma’s strength in the furniture industry should only grow.
Columbus, Ohio-based American Signature was next on the index with the eighth- best equivalent-store sales gain (up 3.7%) and the seventh-best sales volume gain — up nearly $65 million for total furniture, bedding and accessories sales of $1.13 billion.
Now with 129 stores, the company introduced a new format Roomstoday concept in 2006. But it was short-lived, as the retailer has since converted those few stores to its other two banners, Value City Furniture and American Signature.
Dublin, Ga.-based Farmers Home Furniture and Virginia Beach, Va.-based Haynes Furniture made the index as the sixth- and seventh-fastest growing furniture stores, respectively, despite not making the Top 10 cutoff for any of the five measure categories. The reason: both had fairly strong showings in all categories and just missed the cut in a few instances.
For example, Farmers, No. 55 on the Top 100, had the 11th-greatest net increase in units — up seven stores for a total of 160 at year’s end. It had the 16th-best equivalent-store-sales growth, (though up only 0.2%) and the 17th-largest percentage sales gain, up 4.8% to $123.6 million.
Haynes just missed the cut in percentage sales gain (up 9.1%) and dollar volume increase (up $22 million), coming in 11th in both measures. No. 34 on the Top 100, Haynes operates its namesake stores as well as two high-end The North Carolina Co. discount stores and eight Dump units, including its latest location opened in March 2007 in Dallas, selling overstocks and closeouts.
Last year’s two fastest-growing bedding specialists didn’t make the index this year, but two others did, including Sleepy’s of Bethpage, N.Y., the second-largest bedding chain on the Top 100 behind Select Comfort.
Sleepy’s was one of two retailers showing up in the Top 10 in four categories, most notably the net increase in store count, where it led all companies with 191 new units. It did not make the cut for equivalent-store sales, where Furniture/Today estimates its performance was among the worst in the Top 100, calculated down more than 30%.
Ashley Furniture HomeStores, the industry’s largest furniture chain — and the fastest growing for four consecutive years until last year’s index came out — was the ninth-fastest growing retailer on this year’s list. The dedicated network of company-owned and dealer-owned stores ranked in the top four in three categories, starting with its lead position in net volume gain, up $395 million to $2.475 billion.
The HomeStores network also had the third-best percentage-sales increase (up 19% over 2006) and the fourth-highest net gain in units as it added 57 stores for a total of 353 at year’s end.
Addison, Texas-based Mattress Giant took the final spot on the index, and like Sleepy’s, showed up in all top measures except for equivalent-store sales.
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