Gary Evans — Furniture Today,
NAPLES, Fla. — High visibility, accessibility and “customer
DNA†are all important factors when furniture stores look for location, according to retailers on a panel at the Furniture|Today Leadership Conference.
“It used to be more important where you wanted to be rather than where your customers wanted you to be,” said Michael Massood, president and owner of nine Thomasville stores in New Jersey and Virginia.
“You could drive them with advertising. Today, as we’re looking for locations, the most important thing is getting your ‘customer DNA,’ evaluating what customers you’re trying to attract,” he said. Then, he said, put your store near those people.
Other panelists were Irwin Novack, CEO of Florida chain Kane’s Furniture; Joseph Roth, director of public expansion and affairs for Ikea North America; and John Disa, president and CEO of Wheeling, Ill.-based Wickes Furniture.
Moderating the panel was Julius Feinblum, president of Julius M. Feinblum Real Estate, who said property developers today are “understanding what we need” and have been willing to make larger investments in furniture store sites.
For Massood, what makes a location great is the number of “qualified opportunities” who can walk into a store and spend $10,000 for furniture.
He said it’s also a good idea before selecting a site to see what kind of retailers the target area and city are attracting, whether high-end or low. He gathers his “customer DNA” from a radius of 10 miles of a prospective site, with the “sweet spot” a circle of about seven miles.
Ikea has 250 stores in 34 countries with $22.1 billion in annual sales, including $2.5 billion in the United States. Roth said the Swedish retail giant is opening three to five U.S. stores a year, “concentrating on existing markets where we can increase our presence and new locations where we can tap economies of scale and our distribution network.”
He said a new Ikea store will be between 250,000 and 350,000 square feet and requires at least 20 acres of land. The company also wants a population of 2 million within a 40- to 60-mile radius of the site, and it prefers to own rather than rent.
“Highway visibility and access is a plus,” he added, as is complementary retail.
Responding to a question from Feinblum about whether communities show anti-big box sentiment, Roth said that the chain submits plans to local governments, telling them, “This is what we do and this is who we attract. This is what it looks like. Hopefully, you will like it and if not, we appreciate your time.” If a store is rejected, the chain will move on to a location nearby.
At first, Roth said, Ikea chose isolated sites because the land was cheaper. “Now we have seen that no matter where we go we can be successful, so why not go where there is complementary retail?”
Novack said Kane’s and sister retailer Savon also prefer to own, and said all but two of its 18 stores belong to the company. For the other two, it has long-term leases with options for 50 years or more.
“It’s getting more difficult (to buy) as the big boxes come in,” said Novack, “but you pay for the location once, and you want the best location possible.”
He said that visibility is key, and that Kane’s tries to get within 150 feet of the street. “We don’t want to get stuck in the back of a shopping center 400 to 500 feet off the road where you’re not going to be seen as people drive by.”
Wickes will have 40 stores by year’s end and plans to open 12 more in 2014, Disa said. The company looks at the advertising market and considers where the company already has presence, where it wants to be and “where we can go for accessibility and convenience for our customers,” Disa said.
“Our No. 1 objective is high visibility with great success. Drive-by traffic is very critical.”
A Wickes store in Costa Mesa, Calif., near the 405 freeway between Los Angeles and San Diego, is seen by 300,000 vehicles that go by daily. The company also wants to be in a growth area with the potential for brisk homebuilding activity over time, he said.
