Archive for August 29th, 2007
By: Furniture World Magazine
Foamex International Inc., a leading manufacturer of flexible polyurethane and advanced polymer foam products, announced that it is realigning its management structure to better reflect corporate functions and enhance existing operations, optimize future profitability and increase opportunities for growth.
The Company also announced that Gregory J. Christian, President of Foamex and a member of its Board of Directors, has resigned from the Company, effective September 1, 2007 to pursue other opportunities. John G. Johnson, Jr., Chief Executive Officer of Foamex, will assume the role of President.
Mr. Johnson said, “For the past eleven years, Greg has been an integral part of the Company’s management team. Working in positions of increasing responsibility, he rose to become President of Foamex and most recently led the Company through its successful chapter 11 restructuring and emergence. On behalf of the entire Foamex family, I would like to thank him for his many valuable contributions and wish him all the best.”
“I am proud to have had the opportunity to be a part of the Foamex organization,” said Mr. Christian. “The Company has established a strong platform from which it can pursue growth and continue to innovate to meet the increasing needs of its customers. While I am looking forward to my next endeavor, I firmly believe that the Company’s best years are ahead and wish everyone at Foamex future success.”
Commenting on the management realignment, Mr. Johnson said, “Foamex operates in an increasingly competitive global economy, and as such, it is important that we continue to focus on becoming a more efficient organization; today’s announcement is indicative of this desire. To enhance our existing operations, optimize our future profitability and recognize the increasing importance of teamwork to provide growth, I have decided to realign the Company in a functional structure. I believe we now have the right structure in place to successfully navigate the current business environment while positioning the Company for long-term, profitable growth.”
As part of the new management structure, the Company has implemented the following personnel changes, effective September 1, 2007:
- Robert M. Larney, Executive Vice President and Chief Financial Officer, in addition to his current responsibilities as CFO, will oversee the Company’s IT operations, strategic planning, and mergers and acquisitions activities.
- James B. Gamache, former Senior Vice President of Sales and Marketing for YRC Regional Transportation, joins the Company as Executive Vice President, Sales and Supply Chain. Mr. Gamache will be responsible for all sales activities and supply chain efforts in North America.
- Andrew Thompson, currently Executive Vice President, Foam and Technical Products, becomes Executive Vice President, Business Management and Marketing, and will have primary responsibility for business development and marketing functions for all of the Company’s foam businesses, including the carpet cushion business.
- Chiu Chan, currently Vice President, Research and Development, has been named Senior Vice President of R&D and will oversee the Company’s research and development efforts.
- Ken Crawford, currently Vice President, Manufacturing, Foam Products - East, has been named Senior Vice President of Manufacturing. He will have responsibility for all foam facilities with the goal of managing costs.
- The Legal and Human Resources functions will report to Mr. Johnson.
Additionally, the following members of the senior management team will retain their current responsibilities:
- Paul Haslanger, Executive Vice President of Engineering and Technology, and
- Donald Phillips, Executive Vice President, Automotive Products.
Biographies:
Robert M. Larney - Executive Vice President and Chief Financial Officer: Prior to joining Foamex, Mr. Larney was Executive Vice President and Chief Financial Officer, Business Group America of Rieter Automotive Systems, a division of Rieter Group. From 2000 to 2004, Mr. Larney served as Vice President and Chief Financial Officer of Magee Rieter Automotive Systems. Prior to that, Mr. Larney was Chief Financial Officer of Lutron Electronics from 1996 to 2000. From 1986 to 1996, Mr. Larney worked at Ingersoll-Rand Company in positions of increasing responsibility, concluding his tenure there as Treasurer of Ingersoll-Rand Canada and Japan. Prior to his experience with Ingersoll-Rand Company, Mr. Larney held a number of positions in operational control and administration. He is a Certified Public Accountant and a Six Sigma Green Belt. He received an M.B.A. in finance from LaSalle University and a B.B.A. in accounting from the Wharton School of the University of Pennsylvania.
James B. Gamache - Executive Vice President, Sales and Supply Chain: James Gamache has joined Foamex as Executive Vice President, Sales and Supply Chain. Prior to joining Foamex, Mr. Gamache was Senior Vice President of Sales and Marketing for YRC Regional Transportation from 2005 to August 2007. From 2003 to 2005, Mr. Gamache was Vice President of Special Services for Roadway Express Inc. Mr. Gamache held the position of director of Roadway Air from 2002 to 2003. Prior to 2002, he was the Vice President of Sales, Western Division, of Roadway Express Inc. Mr. Gamache received his B.A. from Augustana College. Additionally, he is a member of the Board of Directors of Thermadyne Holdings Corp., a leading welding and cutting instrument company.
Andrew Thompson - Executive Vice President, Business Management and Marketing: Andrew Thompson has been with Foamex since January of 2000 and was most recently Executive Vice President, Foam and Technical Products. Prior to joining Foamex, Mr. Thompson spent 10 years at Lyondell/ARCO Chemical where he held various positions in polyurethane-related areas. He holds a B.S. in Chemistry from the University of Delaware and a Ph.D. in Polymer Chemistry from the University of Massachusetts.
Paul Haslanger - Executive Vice President of Engineering and Technology: Paul Haslanger has been Executive Vice President, Manufacturing since October 2002. From February 1993 to October 2002, Mr. Haslanger was Senior Vice President of Manufacturing. From October 1984 to February 1993, Mr. Haslanger was Vice President of Manufacturing for the Company and a predecessor to the Company. He received a B.S. in Mechanical Engineering from Cornell University.
Donald Phillips - Executive Vice President, Automotive Products
Donald Phillips has been Executive Vice President, Automotive Products since June 2004. From May 2003 to June 2004, Mr. Phillips was a Principal at Advanced Materials Group, LLC, a company engaged as a sales representative for manufacturers in the automotive supply chain. From March 1997 to May 2003, Mr. Phillips was a Senior Account Manager in Foamex’s Automotive Products business unit. He received a B.S. in Finance and Accounting from Lawrence Technological University.
Chiu Chan - Senior Vice President, Research and Development
Chiu Chan has been with Foamex since January 2000 and was most recently Vice President, Research and Development. Prior to joining Foamex, Dr. Chan held various positions at Lyondell/ARCO Chemical from 1992 to 2000. From 1983 to 1987, Dr. Chan held various positions at Hercules Incorporated. He holds a Master Degree in Chemical Engineering from The Cooper Union and a Ph.D. in Chemical Engineering from the University of Delaware.
Ken Crawford - Senior Vice President of Manufacturing
Ken Crawford has been with Foamex since August 2006 and was most recently Vice President, Manufacturing, Foam Products – East. Prior to joining Foamex, Mr. Crawford was Director of Manufacturing Excellence Deployment of Hercules Incorporated from 2002 to 2006. From 2000 to 2002, Mr. Crawford was Senior Vice President Manufacturing Eastern Region – Foam Products at Foamex. Prior to joining Foamex, Mr. Crawford held various positions at Borden Chemical and Lyondell/ARCO Chemical. He holds a B.S. in Chemical Engineering from the State University of New York.
About Foamex International Inc: Foamex, headquartered in Linwood, PA, is a leading producer of polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. For more information visit the Foamex web site at http://www.foamex.com.
August 29th, 2007
By: Furniture World Magazine
Hickory Hardware™, a leading designer, manufacturer and marketer of decorative, functional and industrial hardware, announced that Suzanne Smalligan and Alexis Brannan have been named recipients of the 2007 Withers Endowment Award at Kendall College of Art and Design in Grand Rapids, Michigan. Smalligan and Brannan, both seniors in Kendall College’s Furniture Design program, were awarded the $1,500 prize for outstanding achievement in the program.
The Withers Endowment at Kendall College was established in 1993 by a contribution from FKI plc, parent company of Keeler Brass which is now part of Hickory Hardware. The endowment is named in honor of Joseph W. Withers for his years of valuable service as president of Keeler Brass. The award is presented each year to exceptional students in furniture, industrial, or interior design who intend to pursue careers in furniture or furniture-related industries.
“Our company strongly believes in supporting talented and innovative young designers,” said John Pelka, vice president of marketing, Hickory Hardware. “This endowment allows us to invest in the future of the industry by giving students, like Suzanne and Alexis, the opportunity to pursue an education in the field of furniture design. We have high hopes for all Withers Award winners and look forward to seeing their talent flourish in the coming years,” he added.
In addition to providing financial opportunities for students, Hickory Hardware currently employs four graduates of the school’s furniture design program — Kevin Dewald, product manager for Hickory Hardware’s decorative department, and designers Debra Mattson, Jonathan Lorenz, and Lisa Koskela.
Kendall College students who would like more information about the Joe Withers Endowment are encouraged to contact the financial aid office at Kendall College at (616) 451-2787 or (800) 676-ARTS.
About Hickory Hardware: Hickory Hardware brings together some of the finest hardware companies in the world — Belwith International, Faultless Caster, Keeler Brass Company, Madico, and Wright Products. The company designs, manufactures and markets decorative, functional and industrial hardware to the retail, wholesale distribution, and OEM furniture and cabinetmaker markets under the brand names Hickory Hardware, Belwith, Faultless Caster, Keeler Brass, Madico, Period Brass, and Wright Products. For more information, visit www.hickoryhardware.com .
About Kendall College: As a part of Ferris State University, Kendall College of Art and Design offers programs that prepare the college’s graduates for professional lives as artists and designers. Kendall’s undergraduate programs include art education, art history, digital media, fine arts, furniture design, graphic design, illustration, industrial design, interior design, metals/jewelry, painting, photography, and sculpture and functional art. Kendall also offers the MFA in Fine Arts and the MBA with a Concentration in Design and Innovation Management. Kendall is an active community partner and annually provides over 2,000 children and adults the opportunity to pursue courses in art and design through a richly varied continuing studies program. Visit Kendall on the web at www.kcad.edu .
August 29th, 2007
Furniture Today,
Sees traffic flow shifting
HIGH POINT — Canadian contemporary upholstery specialist G. Romano will be in a new space at the fall market here, on the seventh floor of the International Home Furnishings Center’s Design Center wing, space D-708.
Last market, the company showed in the Market on Green building.
“Over the last few markets, we have seen a definite shift of the market’s flow away from the outside showrooms and back to the IHFC building,” said Rick Lovegrove, Romano’s head of design and sales director. “As buyers attend more markets than ever, the actual amount of time they spend at market is often reduced and is often focused on the key, must-see buildings.
Lovegrove said the company will launch several collections and marketing tools for retailers at the market, which runs Oct. 1-7.
August 29th, 2007
Submitted by harminka
Georgia Tech students working in the Advanced Wood Products Lab are learning lifelong skills and creating award-winning furniture.
Students in Alan Harp’s furniture design studio in the Advanced Wood Products Lab (AWPL) are producing world-class wood furniture; seven were selected as finalists in a national student furniture competition held this year in Las Vegas.
More than 220 students nationwide enter this competition, known as Fresh Wood, sponsored by AWFS machinery show. Furniture creations, ranging from modern coffe tables to antique reproductions, were judged by a diverse group of furniture industry professionals. Fifty-eight finalists were invited to bring their pieces to the show in Las Vegas for display and to attend an awards ceremony.
“I was able to have 90 percent control over what I wanted to do,” said Nicholas Komor, whose oak coffee table finished in second place. “I wanted to design a coffee table, and I designed it. Professor Alan was essential in guiding the engineering of my table and I learned so much from him, but I didn’t feel pressured to change what I wanted. Instead, he encouraged me to work harder and be more of a perfectionist.”
The Georgia Tech students who participated in the competition were all students of Alan Harp, who teaches furniture design at the AWPL, a research center within the College of Architecture. Of the seven Georgia Tech finalists, four were in the senior Industrial Design furniture design studio course, while the other three were taking independent study courses in furniture design.
“The most significant lesson I learned about furniture design and fabrication is the importance of planning before building,” said Jessica Wood, an Industrial Design major. “It took several difficult experiences for me to learn the value of the ‘measure twice, cut once’ process.
“Prior to taking this course, I worked as an intern (and now work full-time) for a NASA subcontractor building full-scale mock-ups out of wood,” Wood continued. “My experience as an intern really made me comfortable working around power tools, and I learned a lot about project planning.”
During the awards ceremony, hosted by Richard Karn, TV’s Al Borland from Tool Time, four of the Georgia Tech students received awards and cash prizes for their work. Georgia Tech not only accrued more awards than any other school, but the Institute also had more finalists than any other school in the competition. This is the third time that students from Georgia Tech have participated in this competition, and the second time that Georgia Tech students have placed. -Georgia Institute of Technology
August 29th, 2007
By: Furniture World Magazine
Flexsteel Industries, Inc. reported sales and earnings for its fourth quarter and fiscal year ended June 30, 2007.
Net sales for the fourth quarter ended June 30, 2007 were $114.3 million compared to the prior year quarter of $112.3 million, an increase of 2%. Residential net sales were $71.5 million, compared to $70.4 million, an increase of 2% from the prior year quarter. Commercial net sales were $25.1 million for the quarter ended June 30, 2007, compared to $23.3 million in the prior year quarter, an increase of 8%. Recreational vehicle net sales were $17.7 million for the quarter ended June 30, 2007, compared to $18.7 million, a decrease of 5% from the prior year quarter.
Net sales for the fiscal year ended June 30, 2007 were $425.4 million compared to $426.4 million in the prior fiscal year. Residential net sales were $259.7 million, a decrease of 3% from the fiscal year ended June 30, 2006. Commercial net sales were $99.5 million for the fiscal year ended June 30, 2007, an increase of 15% from the fiscal year ended June 30, 2006. Recreational vehicle net sales were $66.2 million for the fiscal year ended June 30, 2007, a decrease of 8% from the fiscal year ended June 30, 2006.
Net income for the quarter ended June 30, 2007 was $5.8 million or $0.89 per share. Financial results for the quarter were favorably impacted by two significant non-recurring events. The Company sold a commercial property, which resulted in a pre-tax gain of approximately $4.0 million, or $0.37 per share after tax. This gain is reported as “Gain on sale of capital assets.” The Company also realized a non-taxable gain on life insurance of $0.5 million, or $0.08 per share. This gain is included in “Interest and other income.” Excluding these items, net income for the quarter ended June 30, 2007 was $2.8 million, or $0.44 per share compared to $1.5 million, or $0.23 per share for the prior year quarter.
Net income for the fiscal year ended June 30, 2007 was $9.3 million or $1.42 per share. Results for the fiscal year include the two non-recurring items listed above and the gain on the sale of vacant land that was reported in a prior quarter, which resulted in a pre-tax gain of approximately $0.4 million, or $0.04 per share after tax. This gain is also reported as “Gain on sale of capital assets” on the attached income statement. Excluding these three items net income for the year ended June 30, 2007 was $6.1 million, or $0.93 per share, compared to $4.7 million, or $0.72 per share for the prior fiscal year, an increase of $1.4 million or 28%.
The information regarding non-recurring items is non-GAAP disclosure. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. We believe this information is relevant to our investors due to the significance of these items on net income and earnings per share and have included a table in the financial statements demonstrating the impact on earnings.
Gross margin for the quarter ended June 30, 2007 was 19.7% compared to 18.8% in the prior year quarter. This improvement is primarily due to the impact of changes in product mix and higher absorption of fixed manufacturing costs. Gross margin was 19.1% for the fiscal years ended June 30, 2007 and 2006.
Selling, general and administrative expenses were 15.8% and 16.4% of net sales for the quarters ended June 30, 2007 and 2006, respectively. For the fiscal years ended June 30, 2007 and 2006, selling, general and administrative expenses were 16.7% and 17.1%, respectively. This decrease in selling, general and administrative expenses for the current quarter and on a year-to-date basis in comparison to the prior year periods is due primarily to lower marketing and sales support expenses and lower bad debt expenses.
All earnings per share amounts are on a diluted basis.
Working capital (current assets less current liabilities) at June 30, 2007 was $99.3 million. Net cash provided by operating activities was $10.3 million for the fiscal year ended June 30, 2007 compared to net cash used in operating activities of $7.3 million in fiscal year 2006. The fluctuations in net cash provided by operating activities were primarily the result of changes in net income, changes in inventory and accounts payable related to sourcing of finished product and changes in accounts receivable due to sales volume and collection patterns.
Capital expenditures were $10.8 million during the fiscal year 2007, including approximately $6.0 million for the purchase of a west coast warehouse and approximately $1.5 million for a warehouse addition in Indiana to support the growth of foreign-sourced furniture products. The remainder of expenditures was primarily for delivery and manufacturing equipment. Depreciation and amortization expense was $5.3 million and $5.5 million for the fiscal years ended June 30, 2007 and 2006, respectively. The Company expects that capital expenditures will be approximately $3.0 million in fiscal year 2008.
Outlook
Consistent with industry-wide trends, orders for residential and vehicle markets continued soft throughout the Company’s fourth fiscal quarter period. The Company expects this softness to continue through the first half of fiscal year 2008. Orders for products into commercial applications slowed in the fourth quarter of the 2007 fiscal year and we expect this moderation to continue into fiscal year 2008.
The Company continues to explore cost control opportunities in all facets of its business. The Company believes it has the necessary inventories and product offerings in place to take advantage of opportunities for expansion of market share in certain markets, such as commercial office and hospitality. The Company anticipates continuing its strategy of providing furniture from a wide selection of domestically manufactured and imported products.
About Flexsteel : Flexsteel Industries, Inc. is headquartered in Dubuque, Iowa, and was incorporated in 1929. Flexsteel is a designer, manufacturer, importer and marketer of quality upholstered and wood furniture for residential, recreational vehicle, office, hospitality and healthcare markets. All products are distributed nationally.
For more information, visit our web site at http://www.flexsteel.com.
August 29th, 2007
Michael J. Knell
May return in a couple years, says president
TORONTO — Leda Furniture has decided to pull out of the High Point Market after showing at the semiannual event for more than 15 years.
“This was not an easy decision to make,” said Marco Confalone, president of the family-owed, midpriced to high-end case goods producer. “But with buyer behaviors towards attending markets changing, coupled with an inability to find a suitable new showroom location conducive to providing proper case goods displays, we have decided not to renew the lease on our current location and just pull out of the market.”
Leda had displayed on the fifth floor of the International Home Furnishings Center for the past five years
“Due to some renovations to our floor wing of the building, we found that the fifth floor location had become a low-traffic corridor attracting limited walk-by traffic,” Confalone said. “Plus with the number of buyers now attending only one market a year, it was not prudent to remain at that location.”
He said Leda isn’t pursuing a Las Vegas Market location because the show does not yet cater to retailers in its price points, but added that the company will keep an eye on the Nevada event.
Although Leda won’t have a U.S. showroom presence, it continues its marketing efforts in the country through its sales team. The company also is promoting a program for retailers to visit its Toronto showroom and factory.
“We have always offered to fly current and potential retailers to our facility,” Confalone said.
He said Leda isn’t abandoning the High Point Market permanently. He anticipates returning in a couple of years “once market attendance and the furniture economy improve.”
Meanwhile, the company is using its showroom budget to print catalogs and point-of-purchase items and to develop the retailer fly-in program, he said. Retailers can find out more about the fly-in program by contacting their sales representatives or e-mailing Leda at info@ledafurniture.com.
August 29th, 2007
IHG’s (InterContinental Hotels Group) midscale extended-stay hotel brand, Candlewood Suites® diverted nearly 260 tons of material from landfills during bedding renovations at 55 hotels this summer. Candlewood Suites worked in partnership with the National Furniture Bank Association (NFBA) to repurpose the box springs and linens to benefit approximately 4,300 families in need across the U.S. An additional benefit of the reuse program was a cumulative savings of over $100,000 in disposal fees.
According to the U.S. Environmental Protection Agency, during the past 35 years the amount of waste each person creates has almost doubled from 2.7 to 4.4 pounds per day. Reuse is one way to stop waste at the source as it delays or avoids that item’s entry in the waste collection and disposal system.
“We were delighted that 55 local affiliates of the NFBA were able to donate more than 3,200 mattresses and box springs and 4,000 linen sets from our hotels to families in need,” said Gina LaBarre, vice president, Brand Management, Candlewood Suites. “Not only did the Candlewood Cares® program help local families, but also it diverted waste from landfills and saved our hotel owners thousands in disposal fees.”
Candlewood Suites hotels located in remote areas from NFBA affiliates created their own reuse programs. The Candlewood Suites Tulsa donated 100 bedding sets and 120 new books to Tulsa’s Family & Children’s Services during the hotel’s “It’s Not Time for Bed until after You’ve Read!” event. The Candlewood Suites West Knoxville donated 98 bedding sets to Mission of Hope, a local charity that gives beds to those who otherwise slept on pallets.
According to the Reuse Development Organization, reuse provides an excellent, environmentally-preferred alternative to other waste management methods, because it reduces air, water and land pollution, and limits the need for new natural resources, such as timber, petroleum, fibers and other materials. The U.S. Environmental Protection Agency has recently identified waste reduction as an important method of reducing greenhouse gas emissions, a contributing factor to global warming.
“The Candlewood Suites partnership with NFBA supports IHG’s overall mission to sustain the environment and the communities in which we operate our hotels,” said Vicki Gordon, senior vice president, Corporate Affairs, IHG. “We conducted this pilot program with the Candlewood Suites bedding change initiative in order to document environmental, community and hotel operational impact. Our goal was to take the learnings and, assuming positive results, create a template that we could then offer all our brands when they conduct similar refresh activities.” Based on the very positive results achieved, the template will be shared with all franchisees at IHG’s annual Investors Conference in October.
About Candlewood Suites Hotels
Candlewood Suites is focused on comfort, space and value. With more than 140 properties located throughout North America, guests find spacious studio and one-bedroom suites in the U.S. and Canada. For more information or to book a reservation, go to www.candlewoodsuites.com or call 1-888-CANDLEWOOD.
Candlewood Suites participates in Priority Club Rewards. With more than 33 million members, Priority Club® Rewards is the first, largest and fastest-growing guest loyalty program in the hotel industry. Winner of the 19th Annual Freddie Awards hotel loyalty “Program of the Year” and named “Best Hotel Rewards Program in the World” by Global Traveler magazine, Priority Club Rewards offers more sought-after benefits and the greatest ease of use of any hotel loyalty program.
Enrollment in Priority Club Rewards is free. Guests can enroll by logging on at priorityclub.com, by calling 1-888-211-9874 or by inquiring at the front desk of any of IHG’s 3,800 hotels worldwide.
About National Furniture Bank Association
The NFBA is a 501(c) (3) non-profit organization with the mission to increase the service capacity of existing furniture banks, and to open new furniture banks in areas without one. No child in America should have to sleep on the floor. Contact the NFBA to find a furniture bank near you or to become a sponsor.
http://www.Help1Up.org
August 29th, 2007
By: Furniture World Magazine
The Chicago Sun Times Reported that “Two people who sprinkled flour in a parking lot to mark a trail for their offbeat running club inadvertently caused a bioterrorism scare and now face a felony charge.
“The sprinkled powder forced hundreds to evacuate an IKEA furniture store.”
Read the full article at: http://www.suntimes.com
A New Haven Register article quoted IKEA store manager Gail Franc saying that she “would not reveal the cost of the evacuation and store closure, which came during a prime back-to-school shopping week.” The article did note that the IKEA location lost a half a day’s business and that the store “gave out a few free meal coupons” to customers who were inconvenienced.
Read the full article at: http://www.nhregister.com
_____________________________________
An article In the Richmond Review on August 24th reported that, ”
Striking IKEA employees began picketing Monday at the Swedish furniture giant’s Richmond outlet on Bridgeport Road after unionized members rejected the company’s latest offer on Aug. 19.
The article noted that the Union is asking for “an end to the company’s two-tier wage system, as well as an increase in the number of full-time staff and wage hikes.”
Read the full article at: http://www.richmondreview.com/
August 29th, 2007
Furniture Today,
Also hires logistics VP
SUGAR LAND, Texas — Finger Furniture has promoted longtime executives Mike Even and Jim Sperrazza, to newly created executive vice president positions at the retailer.
The Top 100 company also has hired J.T. Kitchen in another new position, vice president of logistics.
Even is general manager, executive vice president of sales and consumer relations. He has been with the company for more than 20 years, most recently as senior vice president of sales and consumer relations.
Sperrazza, who has been with Finger 12 years, is executive vice president of merchandising and marketing. He had been vice president of merchandising.
Kitchen will oversee home delivery functions. He previously managed the distribution center for retailer Foley’s in Houston.
Finger Furniture has eight stores in the Houston area and ranks No. 33 on Furniture/Today’s Top 100 U.S. furniture stores list, with estimated 2006 sales of $274 million.
August 29th, 2007
By ASHLEY HARRIS
Ashley Furniture HomeStores has planted two stores in the Houston area, with more on the way.
To stand out from the established local names, Ashley is trying to turn a visit to its stores into a unique shopping experience, said Rodney Tippit, vice president in charge of the Ashley stores in the Houston area.
The stores in Conroe and the Katy area feature full bedroom and living room settings in a wide range of styles so customers can get an eye for what the furniture would look like in the home, Conroe store manager Sarah Rau said.
Lauren Mertins, a 23-year-old office administrator for a Christian camp, drove from Sugar Land to Conroe in
hopes of finding furnishings for her new home.
“I had to save up for it,” she said. “But I’m excited to be buying furniture. I like the store, and I really like that they set rooms already in place because it gives decorating ideas.”
Ashley stores in the Houston area are served by a central warehouse, allowing the quick deliveries that customers in the area expect, Tippit said.
The chain’s strategy of providing moderately priced furniture to cost-conscious consumers seems to be working. The Arcadia, Wis.-based company has the biggest furniture chain in the country based on estimated 2006 sales, according to the trade magazine Furniture Today.
Laura Champine, managing director and equity analyst for Morgan Keegan, a regional investment firm, said an aggressive import strategy that lowers its costs and competitive pricing helped lead to the top ranking.
Areas of the stores are sectioned off into decorating styles, such as contemporary, traditional and kids zone, which includes an area with Xboxes and TVs.
“The Xboxes are here for the kids,” Rau said. “But usually this is where the dads come first.”
“I like the store,” Bill Rogers, 53, from The Woodlands, said on a recent afternoon at Ashley Furniture. “It’s not overwhelming, and it’s laid out nicely.”
Ashley is also one of the biggest U.S. furniture makers. Houston furniture retailers have long stocked Ashley products alongside other brands, but Ashley only recently opened stores in the Houston area, with the first making its debut earlier this year.
“The company felt that it could get more market share if it went in the brand for itself,” Tippit said. “We knew there was a big market in Houston that sold to the moderate-priced customer looking for high style.”
Ashley entered the local market by teaming up with Houston-based Finger Furniture Co.
Finger, which sells Ashley furniture in its namesake stores, has the license to build and run Ashley HomeStores in this area, said Rodney Finger, president and CEO of Finger Furniture Co.
Finger said Finger Furniture was drawn by the look of the Ashley stores, which he described as “new and fresh,” and because they offer consumers “a tremendous value with a lot of looks.”
He said Ashley stores offer furniture within a narrower price range than the larger Finger stores, which have products at “every price point from low to high.”
The long-term plan calls for opening a third Ashley store this fall in Pasadena and a fourth store late this year or early next year in Pearland, Finger said.
The goal is to reach 10 to 12 stores, about 45,000 square feet each. The next stores are planned in northwest Houston and League City, Finger said.
Ashley has been growing despite the nationwide housing slowdown.
And the Houston market has pluses compared to other parts of the country. The strong energy economy is still pumping money into the economy. While sales of lower-priced homes have been down, the market’s upper end has remained strong.
Growing competition is also a fact of life for retailers in this market, Finger said. In addition to growth by local players, he said the big national chain Rooms to Go is on the way.
“We have more competition than we’ve ever had, as long as I’ve been in this business,” Finger said. “I think the retail furniture landscape in the Houston area will be changing in the next few years.”
August 29th, 2007
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