Gary Evans
Will open retail galleries
BIRMINGHAM, Ala. — RoomChoices, a new company that’s a go-between for retailers and manufacturers, has begun opening retail galleries aimed at helping independent stores complete with their larger counterparts.

The company, which describes itself as a “service” group rather than a buying

group or distributor, has partnered with several case goods and upholstery producers to provide volume buying power, technology and weekly delivery to independents.

The first RoomChoices gallery opened a few weeks ago at Indian River Furniture in Rockledge, Fla., on the state’s east coast. Others are opening in Texas, Pennsylvania, Utah, New Mexico and Michigan.

40 galleries this year

RoomChoices expects to have 40 galleries by the end of the year and 250 in three to four years, according to Dale Nutter, vice president of business development for Chordus, Room Choices’ parent company.

Galleries include upholstery, case goods, lamps, rugs, and accessories, both imported and domestic, at middle price points. Retailers may select from an online catalog of 2,000 SKUs.

The company doesn’t disclose the names of vendors, who may already be selling in the same markets as RoomChoices galleries. “We want the store to be the brand, not RoomChoices,” said Nutter.

Indian River Furniture, in business since 1939, opened a 3,000-square-foot RoomChoices gallery to compete with a dedicated manufacturer’s store opening in its market, said owners Forrest and Bridget Lilly. Forrest Lilly said the new gallery is “the focal point at the front of our store. We anticipate it being a sales driver.”

RoomChoices is going after second- and third-generation independent stores that typically do $3 million to $15 million in annual sales but find themselves pitted against the buying power of mega-dealers and dedicated stores, as well as deflation caused by Chinese imports.

“Typically, (the retailers) have been around for a long time. They know their local markets. We’re just going to give them a chance to make the changes they need to compete with the big boys,” said Nutter.

He said he was surprised at the popularity of the RoomChoices concept with retailers and with manufacturers, who see it as a way to increase distribution to smaller stores.

 He said the company has about a dozen vendors on board now, with slots for a few more. It plans to open a showroom near its headquarters here to show retailers the products it offers. 

In addition, the company is talking to some retailers thinking about opening freestanding stores.

“They’re come to us. We had that in mind, but we didn’t realize that people would bring it to us that fast. But they’re seeing more and more dedicated stores come in around them,” said Nutter.

RoomChoices has a similar business model to 14-year-old Chordus, its parent company, which delivers $1 billion a year in commercial furniture to its Office Furniture USA franchised stores around the country.

According to Nutter, RoomChoices dealers can buy from factories that had required truckload minimums, and will be able to get truckload pricing on small orders. Orders from multiple factories are delivered at one time on one manifest, with freight paid. RoomChoices hopes to duplicate the Chordus damage rate of less than 0.4%.

Nutter said dealers can offer a broad product selection without having to carry inventory since RoomChoices delivers weekly with its fleet of 65 tractor-trailers to 180 major market areas. The company has distribution centers in Alabama, Indiana, Pennsylvania, Texas and California, and says it can provide quick shipment on all orders except custom upholstery.

Manufacturers benefit

The system gives manufacturers “the ability to do business with hundreds of small dealers that will appear to them as one. They just put the freight on the dock and we give him the ability to offer delivered pricing all over the lower 48 (states) at one price,” Nutter said.

Moreover, he said, manufacturers will get only “clean” orders, meaning that retailers will have credit approved by CIT Financial.

Besides maintaining sound credit, dealers commit to a 3,000-square-foot gallery and must maintain gallery sales of $35,000 a month. Retailers pay no fees to RoomChoices, which collects fees from manufacturers based on sales it generates. “If we don’t sell anything, we don’t make anything,” Nutter said.

RoomChoices has partnered with retail technology vendor Profitsystems for dedicated order systems. Nutter believes that by using technology to keep track of what’s selling, stores can improve their inventory turns from 2 to 2.5 turns to 5 to 6 turns in the galleries.

“After 90 days, they’ll find the dogs and see what’s selling,” he said. “And also, through the network, they’ll see what’s selling elsewhere.”