Rooms To Go, RoomStore acquire former Lack's stores
Clint Engel -- Furniture Today, February 11, 2011
SEFFNER, Fla. — Top 100 companies Rooms To Go and RoomStore are each acquiring lease rights to a pair of former Lack's Stores in Texas, and both retailers say they will pursue further growth in the state.
Rooms To Go, with more than 120 stores in the Southeast and South, will pay $455,000 to assume the lease of a store in Corpus Christi and $75,000 for a lease in Midland, according to documents filed in Lack's Chapter 11 bankruptcy case.
Richmond, Va.-based RoomStore, meanwhile, is expecting court approval to pick up the Lack's leases on two 40,000-square-foot stores in San Antonio, filling out its coverage in the market, where it currently has three stores.
Rooms To Go CEO Jeff Seaman said the Seffner, Fla.- based company will move quickly to reopen the stores as Rooms To Go, probably by early March.
"We want to get up and operating because you have a lot of good people there," Seaman said, referring to the former Lack's employees. "We're going to interview everybody, and I'm sure we'll end up taking a lot of them."
He added that RTG is evaluating other Lack's stores and eventually could pick up two to three more, but wouldn't say where.
"Texas is really the market we're looking the hardest at now," he said. "We have more distribution (capacity) and with Lack's out of the market, it opens up some more markets."
He added that Rooms To Go also will open a store in Lafayette, La., around midyear.
RoomStore CEO Curtis Kimbrell said one showroom in San Antonio, on Perrin Beitel Road, will be a clearance center, replacing a clearance center that closed in the El Paso market last year. The other, on Southwest Military Drive, will be a full-line store for the midpriced retailer, which currently has 64 RoomStore showrooms in eight states in the East and South. The company also operates about 81 Mattress Discounters stores.
He did not disclose what RoomStore will pay to assume the leases, but said it will be "a small amount."
"It's been a very competitive environment in Texas and we're happy to be able to move to recapture some market share," Kimbrell said. Both San Antonio stores are expected to open March 1.
He added that RoomStore isn't currently looking at any other Lack's stores, but is aiming to rebuild its presence in Dallas, where there retailer closed two stores last year as their leases expired.
Victoria, Texas-based Lack's filed for bankruptcy in November, blaming its lenders for cutting off its consumer financing, and said it would liquidate all 36 of its stores.
The retailer is not affiliated with Lacks Valley Stores of Pharr, Texas.
Both the Corpus Christi and Midland showrooms are about 50,000 square feet, Seaman said, compared with the 30,000-to 40,000-squarefoot range for Rooms To Go's prototype stores. But Seaman said RTG hasn't had problems filling larger spaces, including the former Rhodes Furniture locations it acquired years ago.
The new Texas stores will feature both full-line RTG stores and attached Rooms To Go Kids showrooms.
While the Texas stores are in new markets for the retailer, they will be served through existing distribution centers. "Corpus Christi is pretty close to Houston, so it's easy for us to distribute to," Seaman said. Midland, meanwhile is "a bit of a haul" from RTG's Dallasmarket distribution centers, but it's manageable, he said.
He declined to disclose sales last year for the chain but said business was ahead of 2009. He also wouldn't give projections for the new stores, but said they will be "very good" for the company.
RTG was No. 3 on Furniture/Today's Top 100 with estimated 2009 sales of $1.35 billion at 120 stores.
RoomStore was No. 20 with 2009 sales of $323.1 million. The publicly held retailer recently reported results for the nine months ended Nov. 30, including sales of $250.5 million and a net loss of $9.8 million.
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