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Stores wrestle with chore of moving the furniture

Doug Klemm and Shirley Goldych hiked through five Tampa Bay furniture stores looking for a living room set. They drove all over _ caressing fabric, testing cushion firmness and imagining each piece in their home. Midway through this odyssey they arrived at two conclusions: What they really wanted was way, way too expensive.

To buy something acceptable they should double their $1,000 budget.

"Is furniture shopping fun?" replied Klemm, a Lealman paramedic. "No, it's expensive."

Is it any wonder consumers today rank furniture shopping with a trip to the dentist?

Now furniture retailers are trying to replace some of the pain with pleasure in a high-stakes game of survival that already has sidelined hundreds of stores:

Moderate and low-end stores are dressing themselves up like fashion department stores in hopes of making budget sofas look like a thousand bucks.

Many retailers hope computers will help reduce delivery complaints and merchandise that often arrives from the factory riddled with flaws.

Playing up to the impulse-buying crowd, a New York bedding salesman armed with little more than an 800 number last year sold 62,000 mattresses, including a dozen in far-off Tampa Bay.

Furniture shopping may not be much fun. But brutal competition and changing customer tastes have made for a grim scene on the other side of the cash register as well.

"This is the probably the worst depression in the industry's history," said J. Edgar Broyhill, whose grandfather founded Broyhill Furniture.

The storm clouds first brewed when industry sales peaked in 1987.

What followed was a nationwide sales backslide now in its fourth year. And in 1991, sales are forecast to tumble by 3.8 percent. Ongoing consolidation has made low prices and cost-cutting the furniture store bywords as the biggest competitors fight to become the Wal-Mart of their business.

The turmoil proved too much for most department stores. They decided to toss in their throw pillows, slowly shedding costly furniture departments for something that churns more sales.

Then came the recession, which has darkened an already bleak picture. New-home building, which accounts for up to 50 percent of many furniture stores' business, went dormant. Consumers put off big-ticket purchases. Many familiar furniture names locked their doors.

In Tampa Bay, four widely known furniture retailers that each survived four decades _ Lester Bros., Perma House, Loyd Tingler and Lester & Gourlie _ all closed this spring. Heritage House Interiors in Tampa is in Chapter 11 bankruptcy reorganization. Industry insiders say more will join them.

"The tree is still shaking, and leaves will continue to fall," said Ivan S. Cutler, retail editor of Furniture/Today, a trade publication based in High Point, N.C.

Even Levitz Furniture, the Boca Raton chain that is the nation's biggest furniture retailer, suffered in 1990. Sales dropped 2.9 percent. And the company abandoned Memphis, Tenn., after a 30-year stay.

"We're trimming inventory and riding out the storm," said Bob Gordon, Levitz vice president for advertising.

Old formulas don't work

The industry's biggest anathema is price. Prices of top-quality furniture soared over the past 20 years, but customers have not adjusted their price expectations a dime upward. Sticker shock is common when a top-quality sofa costs nearly half as much as a Nissan Sentra.

Most sofas today sell at between $399 and $699 _ about the same prices consumers got used to paying 35 years ago.

Even the yuppie spending spree of the '80s, for the most part, bypassed expensive furniture, said several local fine-furniture store owners. Conspicuous consumption meant being seen in big houses and fancy cars. But friends seldom see bedrooms. So people bent on impressing their pals with pricey furniture seldom decorated past the living room and kitchen.

Even stodgy Ethan Allen is reacting, readying its first venture into kitchen cabinets.

"There are entire sections of Carrollwood (Tampa's new home address for the '80s generation) with two BMWs in the driveway and hardly a stick of furniture inside," said Dick McClain, owner of Lester & Gourlie. "They do not see fine furniture as an investment."

Once the typical independent furniture store had it all: huge selections of both top quality and bargain basement. They offered credit and free delivery.

The formula does not work for small players anymore.

Few sprawling independent furniture stores can afford to fill a big warehouse with slow-moving inventory. Customer financing deals are sold to banks, and delivery _ once free _ costs $25 to $50.

"People today prefer to buy where they get a good line of talk. They compare things on price. They do not compare on quality," said Charley Tingler, who now runs a furniture repair shop while trying to rent out his family's store in Pinellas Park as an antique mall.

The 100 biggest chains increased their market share two points to 37 percent of all furniture sales in 1990. Well-financed specialty chains such as Pier 1, Bombay Co. (part of Radio Shack parent Tandy Corp.), This End Up (owned by the parent of Marshall's) and network galleries such as Ethan Allen siphoned off customers with trimmed-down selections of goods that are in demand.

A mobile society that prefers instant gratification does not like to wait weeks for delivery. The specialty furniture industry obliged with knock-down furniture that can be carried out of the store and assembled with an Allen wrench.

Cassett's Furniture in Tampa is typical of the retrenchment. In the past three years, the company closed two of its three stores in Tampa. Delivery went to a contractor. Special orders go direct to the factory to keep inventory tight.

"Today we sell value," said manager Ed Briad. "We cut out the high end. We don't stock any sofa that costs more than $1,000. We cut inventory by 60 percent. We carry the 40 percent that sells."

At the factory, meanwhile, conglomerates have scooped up most of the big furniture factory names, but they are not mining the profits once envisioned.

Masco Group Inc. owns 10 well-known lines, including Drexel Heritage, Henredon, Lexington, Universal, Hickorycraft and Frederick Edward. Debt-laden Interco Inc. _ owner of Lane and Broyhill _ is in Chapter 11.

There are half as many furniture manufacturers in the United States today as there were a decade ago. Five manufacturers control 25 percent of the market. And independent retailers claim the factories cater too much to their big-volume competitors and their own gallery networks.

Enter peach, teal and magenta

With the less opulent 1990s promising more fallout in the furniture business, many retailers have turned to new tactics.

Small designer galleries are taking root as big store operators seek higher ground. Others are investing in visual merchandising and technology to make shopping less of a chore. And mail order is gaining a foothold after a shaky start.

Pinellas Park-based Kane Furniture, for example, is investing $350,000 to remodel each of its 11 stores to look more like Burdines. They painted over the '60s beige walls. In came peach, teal and magenta, fully-accessorized displays and department store lighting.

Towering plastic palm trees topped in neon dominate the sales floor. Soft sculptures sit in a pit group, modeling the furniture. In the casual dining department, James Dean and Elvis posters peer over a '50s jukebox set on a checkered tile floor.

"People today want fashion. We're making shopping a more pleasureable experience," said Irwin Novack, Kane's executive vice president. "We want people to see how you can use accessories and color to make a $399 sofa look like a $999 one."

Delivery hassles are a problem in an industry where factory-direct shipments through outside contractors are common. Many retailers say up to a third of all orders have some sort of imperfection. So stores are using computer systems to speed sales transactions and track delivery and quality control problems. That way all salespeople can field customer problems.

Levitz also uses its computer records to tally performance records on its suppliers, which are graded monthly.

Mail-order catalogs are trying to cut another slice from the shrinking retail market. Fingerhut last year sold $90-million in furniture. Crate & Barrel and John Deere (a gift catalog distributed by the same company that makes the tractors) also added casual furniture to their pages.

Edgar Broyhill closed his Winston-Salem, N.C., furniture store to put out a catalog that costs $10 a year. Lured by the prospects of heavily discounted moderate and upscale furniture, about 300,000 subscribers last year got 15 sets of his selections in their mailbox.

"The response has been overwhelming," he said, shrugging off suggestions that buyers want to touch, feel and see their purchases first. "I have become the alternative to the galleries. The consumer who is going to spend $10,000 on furniture wants to see some variety."

Luring buyers _ sight unseen

Toll-free telephone lines made Nap Barragan the mattress king for the impatient.

Last year, sales hit $12-million, and 11 companies copied Barragan's brainstorm.

He invented Dial-a-Mattres ("Leave off the Second "S' for Savings"), which, in truth, lost a letter to fit his telephone number, 800-MATTRES.

Barragan used a newspaper classified ad to tell the world he was selling mattresses over the phone _ with delivery guaranteed in two hours.

"You can order a mattress from us at 3 a.m., and we'll have it at your door before you go to work," boasted Barragan.

Who would buy a mattress sight unseen?

"It's not a difficult item to sell over the phone," said Barragan. "People go to beddings shops, and they get confused by prices, all the sizes and samples. We make it very simple. Half our customers already know the names of all three big brand names."

TV retailing channels such as Home Shopping Network inspired him to go national. His ads on WWOR-TV, a New Jersey-based cable TV superstation, put him in homes across the country. But he had to trim the pitch to next-day delivery.

Outside New York City, local furniture stores fill Dial-a-Mattres orders and make deliveries. They pay Barragan 20 percent commission for each sale he hands them.

Curiously, very few of those same stores will accept telephone orders from customers themselves.

At least not yet.

The top 10 furniture retailers in the U.S.

Not everyone is struggling

Company Headquarters.....1990...........Percent revenues change Stores

.........................................(in millions)....from '89

1. Levitz.................... Boca Raton....... $898.4 _2.9% 116

2. Ethan Allen Galleries..... Danbury, Conn.... $650.0 4.8% 303

3. Pier 1 Imports............ Fort Worth, Texas $562.0 8.7% 569

4. Heilig-Myers ............. Richmond, Va. ... $445.0 16.2% 287

5. La-Z-Boy Showcase Shoppes. Monroe, Mich. ... $302.5 21.0% 268

6. W.S. Badcock ............. Mulberry ..... .. $277.6 0.1% 270

7. Seaman Furniture ......... Uniondale, N.Y. . $265.0 1.5% 36

8. Haverty's ................ Atlanta ......... $260.8 7.3% 87

9. Rhodes ................... Atlanta ......... $255.0 2.5% 75

10. Wickes Furniture ........ Wheeling, Ill. .. $230.5 2.0% 25

Other top 100 companies based in Florida or with Florida stores

15. Roberds ................. Dayton, Ohio .... $168.0 1.8% 15

18. Aaron Rents ............. Atlanta ......... $143.0 -1.4% 162

22. The Bombay Co. .......... Fort Worth, Texas $109.2 31.6% 262

26. This End Up ............. Richmond, Va. ... $ 91.0 -1.6% 247

33. Kane Furniture .......... Pinellas Park ... $ 73.5 13.1% 10

50. Robb & Stucky ........... Fort Myers ...... $ 55.5 5.5% 6

68. Expressions ............. Metairie, La. ... $ 43.0 13.2% 51

98. Door Store .............. Washington, D.C.. $ 28.5 -10.9% 55

100. Cargo Furniture ........ Fort Worth, Texas $ 27.0 -3.9% 104