Finger's new direction
Converting stores to Ashley format
By Clint Engel -- Furniture Today, August 25, 2008
SUGAR LAND, Texas — Finger Furniture is liquidating its four remaining Finger stores and will convert them to the Ashley Furniture HomeStores format, bringing a close to the 81-year-old store name in Houston.
Great American Furniture Services, an affiliate of Great American Group, will run the liquidation sale. The five-member merchandising team will eventually leave the company CEO Rodney Finger. That does not include Rodney Tippit and Andrea Jacobs, buyers for the HomeStores.
The retailer, which also operates four HomeStores, closed its Finger units Aug. 18-20 and then reopened for the sale beginning with a private invitation mailer. The in-store and warehouse inventory is valued at $40 million retail and the sales should raise enough money to pay the amounts owed to suppliers, Finger said.
The liquidation will run for about 120 days, with the Ashley store openings staggered beginning in October, Finger said.
The move will trim distribution in the market for many suppliers. On its Web site, Finger says it's the No. 1 Sealy dealer in Houston and has the largest selection of name-brand furniture in the area, including Broyhill, Lane and La-Z-Boy.
“The Ashley HomeStore business model is much more efficient than the Finger model, and the supply chain is much more reliable,” Rodney Finger said, adding that Ashley offers “the best value in the industry” and works hard to be the low-cost producer.
He noted that it takes fewer resources and administrative support to run the HomeStores versus full-line furniture stores. The company's inventory investment will be “significantly less simply because you're dealing with one vendor, and Ashley pretty much delivers everything in two to three weeks,” he said.
Finger is moving toward a model of smaller stores in multi-tenant developments located closer to its customers — a big change from its primarily large Finger stores, but one that was underway as part of a dual expansion strategy in 2006, when it became the HomeStores licensee here. It opened its first two HomeStores last year in Conroe and Katy, Texas.
“The big-box format Finger has relied on for so long is not working well for our customers today,” Finger said. He added that it is “increasingly difficult” to convince customers to drive long distances to shop for furniture.
“I made the decision because it was the best business decision I could make to ensure our company remains healthy well into the future,” said Finger. “At the end of the day, that is the best outcome for our company, our employees and the Finger family.”
He said that contrary to rumors, Ashley is not buying the company and ownership isn't changing.
The Houston-based Top 100 company, with estimated 2007 sales of $255 million, once had plans to open both large new Finger stores as well as eight to 10 Ashley Furniture HomeStores. This summer, it closed its 150,000-square-foot Finger store in the Greenspoint area of Houston. Earlier this year, it closed its 65,000-square-foot store in Sharpstown Center, southwest of downtown.
Meanwhile, it was facing new full-line competition with the arrival of Seffner, Fla.-based Rooms To Go in the market early this year.
Finger opened a 93,000-square-foot store in the Willowbrook area of northwest Houston in October (which will now be converted to a HomeStore and outlet) and had plans for another big-box store in Houston's Woodlands area in mid-2009.
Two more Ashley Furniture HomeStores opened this year, and Rodney Finger already had said the company would convert its Humble, Texas, Finger store to a HomeStore soon.
Its two other Finger stores are the 250,000-square-foot location on Gulf Freeway in Houston and a smaller store in Sugar Land, Texas. The Gulf Freeway store will convert to Ashley for now, but eventually the company plans to redevelop the property into a multi-tenant site, and Finger said he is not sure yet if a HomeStore will be part of the final mix.
Two HomeStores are planned for League City and the Woodlands — where the Finger store originally was planned. That store will now be sized down, Finger said. When the conversions and openings are complete early next year, the company will have 10 Houston-area HomeStores.
Finger was based in Houston until last year, when it moved into a new headquarters and distribution complex in the Sugar Land suburb.
“It's just the end of an era,” said Martin Ploy, executive vice president of case goods and upholstery supplier AICO. “All of us who spent any time in the home furnishings industry grew up with a great deal of respect for Finger Furniture. Their advertising was extremely creative; they were very very strong on price promotions.
“I think Ashley represents a new opportunity for them. It certainly gives them the opportunity to cut down on overhead and still run a strong, viable furniture business.”
Ploy said Finger has remained “very forthright in dealing with us over the course of the last six months,” as it was working through some issues.” Through Jim Sperrazza, executive vice president of merchandising and marketing, the company “dealt with us fairly and kept us current (with information) and financially,” he said.
AICO has alternatives for distribution in Houston — it already sells Gallery and Metropolitan Furniture, among others here — “but it's still a big hole to fill and it may not get completely filled,” Ploy said.
“They were an icon in the industry,” said Keely Rhodes, president of sales for Lee Furniture, a case goods source. “Although the current economic conditions are bleak at the moment, a lot of retail volume was produced under the Fingers brand.
“I'm sad to see them go, but I think some retailers in Houston will flourish because of it.”
Staff writer Heath Combs contributed to this story.
