• Clint Engel

Rooms To Go seeks outdoor retail acquisition

rooms to go adSEFFNER, Fla. — Rooms To Go is looking to acquire an outdoor furniture retailer to jumpstart a move into the category.

In an advertisement running in Furniture Today this week, the Top 100 company states just that: “Outdoor Furniture Retailer Wanted,” adding that it’s looking to acquire a business in the Southeast.

“It’s something we’ve been thinking about for a long time,” CEO Jeff Seaman said about entering the category. “If there is a right acquisition, it would be better for us to do it that way than start from scratch.”

Seaman, who leads one of the nation’s largest furniture chains, wouldn’t go into everything that would make for the “right” kind of acquisition, but he did say geography is key. The prospective retailer would need to operate in markets where RTG already has a footprint.

It wouldn’t have to be a large chain, Seaman said, but he added that RTG is not looking for a single store, either.

The 137-store retailer would rebrand the business under the RTG name and eventually add the category to its full-line stores. The retailer operates stores throughout Florida, Georgia, the Carolinas, Louisiana, Mississippi, Tennessee, Texas, Alabama and Virginia, but exactly how outdoor would roll out is still to be determined.

“One of the things we’ve always done at Rooms To Go is a lot of experimentation,” Seaman said. “So we’re going to experiment in different ways in different areas.”

Outside of buying and selling some closeouts over the years, RTG has yet to play in the outdoor furniture category in any significant way. But is a natural extension for company, Seaman said, adding that in the retailer’s Southeast and Texas markets “it’s not just seasonal.”

“Most of our competitors have gotten into it,” he said. “We think we could add a little to the mix.”

Seaman pointed to RTG’s economies of scale as a competitive advantage. “We have the largest customer base in the Southeast and Texas,” he said. “We have a lot of efficiencies in advertising and probably have the most people coming to a website in our markets. And we have lots of stores.”

RTG, he said, would like to have an acquisition deal by the end of summer or early fall to prepare for selling outdoor by next spring. And while the company plans to enter the category regardless of whether if finds a prospect that fits, Seaman said there are clear benefits to starting via acquisition.

“The ideal acquisition has good managements, so it brings talent along with physical locations,” he said. “And we’d much rather add to our group if we could.”

Also, “it just gets us into the business a lot faster.”

He declined to speculate on how much business outdoor could mean for RTG but said it could be substantial, given the retailer’s overall sales base and plans to sell not only in specialized outdoor stores but through its full-line stores, too.

“Whatever we do gets magnified by our footprint of stores, so it gives us a lot of doors, very good locations and traffic,” he said. I think it could be a sizable business.”

Ranked No. 5 on Furniture Today’s Top 100, Rooms To Go did an estimated $2.35 billion in sales at then 135 Room To Go, Room To Go Kids & Teens and outlet stores in 2016. It has since opened a showroom in Round Rock, Texas, in the greater Austin market and a clearance center in Houston.

In addition, Seaman said the retailer will open in Murfreesboro, Tenn., in the greater Nashville market later this month, as well as stores in Huntsville, Ala., Fort Lauderdale, Fla., and Rockwall, Texas, (greater Dallas) later this summer.

Clint EngelClint Engel | Senior Retail Editor, Furniture Today
cengel@furnituretoday.com

Please feel free to email or call me with all of your retail news and tips, including expansion news, successful merchandising and marketing strategies and anything else you would like to see covered by Furniture/Today.  Contact me directly at cengel@furnituretoday.com or 336-605-1129.

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