Memorial Day Sales Up
But retailers aren't sure it's a trend
Clint Engel -- Furniture Today, June 8, 2011
Indianapolis-based Kittle’s reported stellar Memorial Day weekend results with an offer of half off everything and twoyears no-interest financing.
HIGH POINT - Furniture retailers reported decent to excellent sales during the long Memorial Day holiday weekend, but just how this bodes for future business still appears up in the air.
For some, the strong results were a welcome change in an otherwise weak May, while others saw it as a continuation of positive momentum that has been building this year.
However, rising gas prices and the recently reported dip in home values has some wondering if the holiday gains will be shortlived.
Sales were up about 7% for Jackson, Miss.-based Miskelly Furniture during a three-day Memorial Day event (excluding Sunday, when the store is closed), said Oscar Miskelly, a partner in the business with his brothers Chip and Tommy.
"We were kind of concerned because the month hadn't been that strong," Miskelly said.
The retailer's promotion - which included "$150 off at the door" Monday on a purchase of $699 or more and 12 months of interest-free financing - seemed to do the trick. The retailer also threw in a couple of popular free television offers with certain $999 or $1,999 purchases "that definitely added a little shot in the arm as well."
Miskelly said Memorial Day used to be a harbinger of what retailers could expect for the summer, but not anymore. If anything, it speaks to consumers' changing shopping and buying habits and "how they are waiting for holiday weekends when they get the best deals," he said.
San Diego-based Jerome's also reported solid holiday weekend results.
"We needed it because May was not performing well," said President and CEO Lee Goodman. Total sales were up about 18% from the same period a year ago and samestores sales increased about 13.5%, he said. Jerome's is known for an everyday-lowprice strategy and, as usual, didn't run a special holiday promotion.
Despite the strong showing, "we still didn't get out of May with an increase," he said. "It was the first decrease in same-store sales in 20 months."
While higher gas prices and a still shaky economy may have affected the month's results, Goodman said the bigger explanation for the decline was probably an atypical VIP customer event Jerome's ran last May, making the month's sales tough to beat this year.
He said sales were very strong in the first quarter but softened in April and moved down in May. He said the downturn seemed to track the rise in gas prices.
But there were other factors, too, including supply chain issues as overseas factories weren't able to produce what they thought they could coming out of the Chinese New Year, he added.
Jeff Bacon, general manager of Port Charlotte, Fla.- based Bacon's Furniture & Outdoor Living, said traffic and sales at the company's three stores were about double what they were for last year's holiday event.
He also noted the rising prices at the gas pumps and restaurants, but said they have had a positive effect, resulting in people wanting to spend more time at home.
"People are having more in-home fun than out-of-home experiences," he said. "That is encouraging people to make their homes more comfortable over the last several months."
Bacon's Memorial Day sale promotions started May 18 and continued through the holiday weekend. Customers received an additional 10% off sale prices if they purchased 10 items.
"It helped increase the average ticket and was a win win for the customer and for us," he said.
Steve Harmon, director of sales and marketing at Tigard, Ore.-based Paul Schatz Furniture, said Memorial Day weekend traffic was up 10% and sales were up 20% from last year.
Helping drive the traffic was a combination of television, print and e-mail ads that offered discounts on major brands and special financing offers, as well as in-store coupons for additional discounts.
Harmon saw the activity as a continuation of the positive momentum that has been building in recent months.
"We just seem to be reaching our goals every month," he said, noting that the Schatz family also has made investments to keep the retailer fresh and up to date.
Charlotte, N.C.-based Broad River Furniture's Ashley Furniture HomeStores also used coupons - and in a big way for the first time. The retailer played on Apple's "There's an app for that," slogan by advertising "There's a coupon for that." It ran dozens of discount coupons, promoting heavily in newspapers, online, via direct mail and on TV and radio.
Among the coupon offers were a $249 queen sleigh bed, a $299 sofa and a $499 "blended leather" reclining sofa. The stores in the Carolinas and Georgia also offered 48-month no-interest financing and showed how consumers could use select coupons combined with the financing for low monthly payments (a bedroom group under $1,000, for instance, for $19.99 a month).
"We were mildly pleased with it," said Charlie Malouf, a partner in the business with Jonathan Ishee. "It was better than last year. We comped up, but it wasn't spectacular."
For all of May, sales were "a little better than flat" with a year ago, he said. Part of the problem may be some waning interest in television- and-furniture packages, which had been driving sales for quite a while.
"We've got to find the next big hook," Malouf said. "We were hoping it would be coupons. And we're going to go back to (a coupon event). We learned some things and we'll refine it."
At Indianapolis-based Kittle's, CEO Eric Easter said the Memorial Day weekend event was the biggest in the company's history, topping last year's event.
Ashley Furniture HomeStores licensee Broad River Furniture of Charlotte, N.C., lured shoppers with a media blitz of dozens of coupons in all product categories, using slogans including, “There’s a coupon for that.”
"The rest of month going into the holiday weekend was outstanding," he said. "We expected the holiday to be good, but the most satisfying thing was that even prior the holiday our business has been very good."
Kittle's key offer was savings of at least 50% plus nointerest financing for two years. Sales were up over plan, and same-store sales increased more than 15% for both the long weekend and the month, he said.
Like others interviewed for this story, Easter has heard reports of mixed results from peers. He said he believes Kittle's results are due in part to the many changes the retailer has made in recent years, including broadening its assortment to appeal to a more consumers, and its aggressive promoting.
"It takes extremely strong promotions to get people to wake up and buy furniture," he said.
Read a longer version of this story on www.furnituretoday. com.
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Furniture retailers say Memorial Day sales up
Jun 6, 2011
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