Five Kirschman’s sites will reopen as chain
By Jaquetta White
Kirschman’s, a 92-year-old home furnishings company that was one of the metro area’s leading local furniture dealers, abruptly closed Wednesday night after agreeing to be acquired by Rooms To Go Inc., the nation’s largest furniture retailer, for an undisclosed amount.
Employees were notified of the sale in meetings Wednesday at 5 and 7 p.m.
Beginning today, the stores included in the deal will close for two weeks while inventory is assessed. They will reopen, still under the Kirschman’s name, for a two- to three-month liquidation sale, said Peter Weitzner, vice president of Rooms To Go. Then the stores will close again, will be redesigned and will reopen one by one in the fall, beginning with the Metairie location on Veterans Memorial Boulevard, as Rooms To Go.
Kirschman’s has about 300 employees in stores and at a warehouse. The furniture company had about 320 employees before Hurricane Katrina.
Weitzner said Rooms to Go stores are more labor-intensive than Kirschman’s operations and will have jobs available for all of the Kirschman’s retail staff, about 225 people. All of Kirschman’s employees will have to apply for jobs with Rooms To Go. “We’ll certainly want to talk to all employees,” Weitzner said.
But employees at the Kirschman’s warehouse on Almonaster Boulevard, which is not being bought, might lose their jobs.
The Kirschman family is retaining the rights to its name and has not ruled out opening a separate business in the future.
Under the deal five Kirschman’s stores — in Metairie, Gretna, Covington, Baton Rouge and Gulfport — will be taken over by Rooms To Go, which owns more than 100 stores in eight states.
Four other Kirschman’s stores that have closed in recent months are not included in the deal. Two of those stores, in Slidell and Gentilly, have not reopened since Hurricane Katrina. The other two, in Lafayette and Houma, opened briefly after the storm but closed because of labor shortages.
Offer unsolicited
Arnold Kirschman, the company’s president and chief executive, said he had not been seeking a buyer but was approached about five weeks ago by Rooms To Go, which is based in Florida and had been scouting locations in the New Orleans area.
“The main thing they wanted was to get the prime locations that we own or have under a lease,” Kirschman said. “The energy and their concern for our people seemed to fit our culture.”
In addition to the rights to the company’s name, Kirschman will retain ownership of the land at the Metairie and Baton Rouge locations and will lease that space to Rooms To Go. Kirschman’s financing arm, which extends credit to customers and is a “small percentage of the (company’s) portfolio” is not included in the deal. Three Ethan Allen franchises operated by the Kirschman family will not be sold.
Since opening its first stores in Orlando in 1991, Rooms to Go has grown into the nation’s largest furniture retailer. Last year the company, described as a “full-service, mid-priced chain,” had estimated furniture sales of $1.6 billion, up 12.7 percent from the previous year, putting it ahead of Ashley Furniture Homestores, Pier 1 Imports and Ikea, according to a report by the trade magazine Furniture Today.
Rooms To Go has built its business around selling furniture in packages, by the room. The stores are arranged so customers see complete, designed rooms. Customers can have a fully designed room shipped to them in days.
“Their genius is being able to create nice looks. They take the guesswork out of designing” said Ray Allegrezza, editor-in-chief of Furniture Today. “They’re smart. They’re really good merchants, very aggressive.”
Swift growth
Indeed, in just 15 years, the company has added stores in Alabama, Georgia, Mississippi, North Carolina, South Carolina, Tennessee and Texas.
“New Orleans is a place we’ve wanted to get to for a long time,” Weitzner said. “We think the people of New Orleans will like our stores.”
Allegrezza said it’s not surprising that the longtime local company sold to a national chain. The furniture industry, he said, is undergoing a period of consolidation. The increase in the popularity of Internet furniture shopping, the rise of nontraditional furniture sellers such as Wal-Mart and Target, inexpensive manufacturing in China and growing competition from suppliers-turned-retailers such as La-Z-Boy, combine to make it tough for local furniture retailers to thrive, Allegrezza said.
“The guys that are trying to do business the way their mom and dad did business, they’re going to be out of business,” he said.
Kirschman, whose grandfather Morris Kirschman founded Kirschman’s in 1914 as a 16-year-old after immigrating to the United States from Poland, believes there is still a place for the small firms.
“The future for the independent retailer, I think, continues to be very strong,” Kirschman said. “The New Orleans industry continues to be one of the best.”
He said the Kirschman family does not intend to leave the industry, but plans to pursue a niche market.
“We don’t see this as the end of Kirschman’s in any way,” Kirschman said. “We see it as a change of direction.”
Although Kirschman’s, as part of its agreement with Rooms to Go, is prohibited from opening a general furniture store, the company could go after a smaller market. It’s too early to tell what that segment might be, but Kirschman said a new venture will likely carry the family name.
“My grandfather built the company into a great name and a great organization,” he said. “You can’t put a price on it. You can’t let it go.”
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Jaquetta White can be reached at jwhite@timespicayune.com or (504) 826-3494.
