Fun Facts about Furniture
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\"RRImagine if you crossed a car dealership with a funeral parlor. What you’d have would be a furniture store.

The retailing of furniture may not be the most archaic, antiquated and illogical form of merchandising in American business today…but it’s pretty damn close.

Anytime anyone talks about the best retailers in America, that conversation hardly ever includes a furniture retailer.

Virtually every consumer products category in America has a world-class, national retailer that dominates the category. Not furniture.

Virtually every consumer products category in America has a world-class, national brand that is instantly recognizable. Not furniture.

Think about it. Furniture is usually the third most expensive thing a person will ever buy, after a house and a car. Yet most people visit a furniture store about as often as they stop by a mortuary. With an often similar shopping experience, too. So, what you don’t know about furniture retailing could fill…well, could fill this column.

1. Who’s the biggest?

As a reasonably intelligent businessperson who has a keen interest in American retailing, you would think you would know who the biggest furniture retailer in the country is? I bet you don’t.

It’s Ashley Home Stores. Ashley, a privately owned company based in Arcadia, Wisconsin, is also the largest manufacturer of furniture in the country. It does over $3 billion a year in sales. It has more than 300 stores, some franchised, some company owned. It is about to undertake an aggressive expansion move into China. And you never heard of it.

2. Who’s the best?

The preeminent furniture store in America is Robb & Stucky. Actually, it was Robb & Stucky. They just went out of business. The brilliant high-end chain of 30 stores rode the housing boom in Florida, Nevada and elsewhere in the Sun Belt…and then crashed and burned when the housing markets in those states collapsed. Robb & Stucky stores were elegant, strongly merchandised showrooms with well integrated assortments of accessories and coordinated home products like textiles, china and glass, and even flowers. Most furniture stores are tombs of brown boxes, but these stores were actually places you wanted to go to, not had to go to when your couch collapsed. It was a terrific store. You would have liked it.

3. What would Warren do?

Warren (Buffet, that is) does like furniture retailing. So much, in fact, that he owns four of the larger, better regional chains in the country. He started with a local Omaha operation called Nebraska Furniture Mart and then bought up others in New England, Texas and the West.

They are good retailers and he’s resisted the temptation to buy up any of their lesser brethren. Buffett knows the dangers of the home furnishings market. He likes to say that Berkshire Hathaway (BRK-A) started out as a textile company and then he decided he wanted to make money. Buffett got out of textiles immediately.

4. Ethan Allen could be one of the great retailers in America.

If only it didn’t have to sell furniture to get there. Ethan Allen (ETH) performed one of the greatest transformations in business ever – on the scale of IBM (IBM) or Cadillac – going from a staid, colonial kitsch store to one with smart merchandising, sophisticated marketing and nicely styled product, under the direction of one of the brightest CEOs in corporate America.

The trouble is that, like any store that sells furniture, it is disproportionately dependent on the sale of housing to succeed. Some furniture industry insiders estimate that as much as 20 percent of the sales in the category are directly linked to a housing related activity, like a purchase, a move or a major remodeling.

With the housing market in a slump that makes the Mets look good, Ethan Allen is a victim of its circumstances. Even the Green Mountain Boys never had to suffer so much.

5. Rooms To Go wants to be the Mc Donald\’s Happy Meal of the furniture business.

But it ain’t gonna happen.

R2G—yup, that’s what the trade calls it – took the concept of the packaged meal and put it on furniture steroids. Buy the sofa, tables, lamps, rugs, pictures and even the candy dishes all for one matchy-matchy package and presto! Instant living room. The aesthetics may not be quite up to everyone’s standards and the quality…well, you get what you pay for when you pay $899 for a room full of stuff.

Rooms was started by the family that used to own the old Seaman’s Furniture chain in the Northeast. They sold that to private equity, moved to Florida and started R2G. But like most furniture retailers, it doesn’t have the marketing budget or strong enough branding message to get to the next level. It has painted itself into a corner…so to speak.

6. Life style furniture stores get a lot of headlines but don’t sell a lot of furniture.

Stores like Pottery Barn, Crate & Barrel and Restoration Hardware — the trade calls them “lifestyle stores” – whatever that means — are looked at as style leaders and trend setters, but the amount of furniture they sell compared to Rooms To Go and Ikea is relatively small. Pottery Barn was for years the poster child of furniture trends and everybody and his Chinese brother-in-law knocked off their dark wood/brushed metal hardware look to the point where it’s become the khaki pants of the furniture business.

Now, it’s Restoration Hardware’s turn. Its Metro Retro Repro look — try saying that fast a few times — combining vintage, French-inspired designs interpreted in repurposed and reclaimed wood is fast becoming as ubiquitous as Diet Pepsi. And as guilt-free too. Like Pottery Barn, it will be interesting to see what Resto’s act two will be like. (Curiously enough, the same executive, Gary Friedman, is responsible for both landmark looks, first at PB and now at RH.)

Pottery Barn’s parent, Williams Sonoma (WSM), is still licking its furniture wounds over the meltdown that was Williams Sonoma Home. The business lives on online, but is gone from brick and mortars, another victim of the housing slump that took no prisoners. The better furniture business remains one of the decidedly unbetter businesses out there.

7. IKEA will eventually destroy the entire American furniture store.

And I mean that in a good way.

The American consumer can get a custom built computer, usually from China, in 48 hours. She can pull into a Mercedes dealer and two hours later drive out in a $125,000 luxury automobile. Amazon will deliver some products to her the same day she clicks. But she often has to wait 16 weeks for a bedroom set.

IKEA wants no part of that. Come into the store, walk around the maze like a trained hamster and cart your living room out to your car. It looks pretty good too, although you usually have to put it together yourself and it probably won’t last forever…or even close to forever. But that doesn’t matter. The customer buying IKEA products just bought her clothing at H&M. She has a new iPhone but she’s going to get a new one in 18 months when the next version comes out. She doesn’t want to buy furniture she can hand down to her kids. Her kids wouldn’t want it anyway. And she has absolutely no intention of waiting three months for a credenza. She wants her furniture and she wants it now. IKEA knows that. The rest of the furniture industry does not.

Well, congratulations. You now know all you need to know about furniture retailing. In fact, more than you ever wanted to know.

And OK, I lied: This wasn’t so much fun. But everyone knows there’s no fun in furniture.

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