‘Experience’ stars in City’s biggest-ever expansion
May 19, 2017,
TAMARAC, Fla. — City Furniture is in the midst of its biggest growth push ever and one loaded with new store experiences designed to take the edge off the shopping process and get consumers through the door more often and for longer visits.
Keith Koenig, City Furniture
The Top 100 company opened a new combination City Furniture and Ashley HomeStore already this January and has lined up several more openings for this fall into early 2019.
Also in Miami, site work has started on a 100,000-square-foot Ashley/City location in the prominent Doral area, just off the Florida Turnpike, where a couple of hundred thousand cars pass by every day, estimated Keith Koenig, president of the 27-store Florida retailer. It’s also expanding and remodeling its flagship Tamarac, Fla., location, and if all goes well, the retailer will add another new Miami HomeStore later this year and another in 2018.
“We’re going into the biggest expansion phase in our history,” Koenig said, adding that this tops the growth push of 2004 when the company announced it was getting into the Ashley HomeStore business. (It’s up to a dozen HomeStores now.)
Perhaps most significant is the special new features the retailer plans to roll out to its stores — wine bars and store-within-a-store home accent areas designed to turn up the dial on in-store experience.
In Miami’s Midtown, the retailer is opening that smaller footprint store in District 36, a new mixed-used development and an unusual property for City — a high-rise building featuring two levels of retail, parking and then floors of residential apartments.
City Furniture will be the flagship retail tenant with a small space on the lower level and its main showroom on the second level — the best retail destination, Koenig said — and just yards away from a busy Interstate 195 freeway, offering great visibility in a very high-traffic area.
“We’re putting a very big emphasis on modern furniture across our entire company but particularly in this store,” Koenig said, noting that the building is stainless steel and glass “so modern really lends itself to the market.” Among the suppliers will be Kuka and K-Motion, HTL, Natuzzi, Violino, Sunpan and Lifestyle Enterprise’s Simply Cool Living product.
The store also will get a new higher-end modern case goods collection from Michael Amini at AICO that Koenig said was developed for the chain, brought to the High Point Market last month, “and we bought it on the spot.” In outdoor, the store will include product from Chinese resource Gardenart, which Koenig said has been an “excellent” addition to its assortment.
Wine and beer on the way
What’s more, the store will be the first to feature an update to City’s KC Café, introduced in 2001 and named for City founder and Koenig’s late brother Kevin Charles Koenig. KC Café will become a modern KC Café & Wine Bar.
“We will have happy hour from 4 to 8 p.m.,” Koenig said, probably starting earlier on weekends. “We will have wine tastings, craft beer tastings. We will make shopping a little bit more fun than it otherwise was.”
Koenig said this idea has been fermenting for a long time, and he can’t recall just how many people he’s surveyed about it. But “pretty much every woman has told me, ‘That’s a great idea,’” he said. “‘Shopping is stressful enough, and I’d love to have a glass of wine while I’m looking at furniture.’
“And then they say they’d probably even order more.”
Since it will be serving alcohol, the company also plans to offer a light menu and will reach out to some charity groups to offer the venue for their socials. Wine will be available by the glass, and it will be free or very inexpensive, Koenig said. He expects the retailer will likely offer varying qualities “so if someone is interested in a better wine, it will still be a bargain.”
“We don’t’ need to make money selling wine,” he said. “We need to make customers feel welcome.”
The café still will offer complementary cookies and flavored water and other refreshments and will have a barista available to make coffee drinks. Nothing is going away, Koenig said; the bar and light menu are just additions.
City will roll out the new café and wine bar in the modern store and at its Tamarac headquarters store at around the same time — Nov. 1 or so. Koenig said it will learn from the first two but plans to ramp it up quickly and make it a part of the City Furniture offering everywhere.
“Retail has to become more of an experience. We all know that; every bit of research shows that,” Koenig said. “Otherwise, shopping is able to be replaced by e-commerce. But we can create a better shopping experience and a conventional and fun environment, and what better way to make shopping more fun than with a glass of wine?”
In greater Orlando, where City expects to open two stores early next year, some more firsts are in the works. Not only is the retailer moving into new territory with a store near Orlando’s Mall of Millennia and another in the suburb of Altamonte Springs, but at 120,000 square feet, they will be about 50% larger than the largest City stores.
The design will be what the company called Generation 3, and the floor will feature expanded assortment, including a larger Bernhardt program and more youth, outdoor and home office furniture.
A cue from Home Goods
But the biggest difference will be in the 4,000 to 5,000 square feet devoted to a new home accents store within a store that also comes with a new approach to sourcing the goods.
“Right now, pretty much all furniture companies, including City Furniture, buy homes accents and accessories to make their furniture look better,” Koenig said. Buyers go to High Point, for instance, and shop accents, lamps, wall decor, table top and other categories, typically buying from domestics resource that are importing these categories. The importers, in turn, are buying from the overseas factories and then stocking or flowing containers to their retailer customers.
“We want to be more direct to our supply chain so we can offer better values and to control our supply chain for ordering and reordering items,” Koenig said.
The new sourcing process already has begun, as a team of young buyers recently shopped the Canton Fair in China, which ran concurrently to the April High Point Market. They shopped for containers of everything from table top to ceramics, glass, all types of lighting and a more robust area rug program, among other things.
Koenig said the company will continue to buy from its existing domestic sources, too, “but we’re looking to flow more container goods because we’re going to make this a bigger part of our business.”
In its new approach to the home accents category, City is taking a cue from Home Goods, The TJX Cos. division that Koenig called “one of the most exciting companies in the home furnishings category.”
“I can’t tell you how many women — and men — I know who like to shop Home Goods every week or frequently,” he said. “They go because there’s a big assortment, the values are strong, and they can refresh their home and fulfill their needs affordably.
“We’re not going to try to copy Home Goods,” he added. “We’re going to be City Furniture, but we’re going to learn from that trend — that we need to have plenty of accessories and lighting and rugs and wall decor that our customers want at affordable and appealing values.
“We feel that can help drive more repeat traffic to our showroom. We want her to come to City Furniture’s home accents store inside the future store to shop more frequently than she would to buy a new sofa or dining room set.”
And that glass of wine while she’s shopping will make for a lot of fun, he said.
The new accents strategy also fits well with another growing of its business for the company — the furnishings of commercial model homes by City’s design staff for homebuilders such as D.R. Horton and Lennar.
Doubling accessory sales
Home accents typically range from 3% to 6% of a furniture store’s overall sales, he said. “We’re going to be prepared to double our business for sure,” he said, “but it will come from merchandising and promotion and cross merchandising — buy a bedroom set and get 20% off linens,” for instance.
The first home accents store within a store actually will open in Tamarac in November, along with the KC Café & Wine Bar, as part of that store’s expansion and remodel.
In addition to getting consumers in to shop more often, Koenig thinks the new strategy will make City more competitive in the category against national lifestyle retailers, such as Pottery Barn and West Elm.
“They happen to be home accent companies that got into furniture,” he said. “As a result, their furniture is very nice, but very expensive and out of reach for many people, and we can beat them day in and day out on furniture.
“Now we’ve got to get better at home accents, so we can narrow the gap” against the lifestyle companies that dominate the category.
“And I think we can do that,” he added. “We have the logistics and buying power to do it. It’s just a matter of getting good at it.”
Koenig won’t say how big its investment is in the overall expansion strategy except to say it’s “a lot,” but it’s clearly in the many millions of dollars. The Real Deal, a South Florida real estate news source, reported last week that the retailer paid $11.3 million for one of its Orlando properties.
A regular among the top 30 of Furniture Today’s Top 100 furniture stores, City Furniture did an estimated $333.3 million in sales last year at 26 stores.
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