THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, February 19, 1996 TAG: 9602170433
SECTION: BUSINESS WEEKLY PAGE: 10 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY STEPHANIE STOUGHTON, BUSINESS WEEKLY
LENGTH: Long : 124 lines
When Haynes Furniture swung open its new showroom doors in 1973, it was the mammoth of the local furniture industry, eclipsing all from its perch on Virginia Beach Boulevard.
At the time, Haynes, privately held by Leonard Strelitz, was one of the few home furnishings retailers along the corridor. Today, the area is Furniture Row, with more than a dozen furniture or related retailers packing Virginia Beach Boulevard from Newtown to Witchduck roads.
Recently, the competition has heated up and the big furniture companies have strengthened. Haverty's, the nation's seventh-largest furniture-store chain, moved into Hampton Roads with two stores last year. Several other home furnishings retailers have been eying the region.
Haverty's, as a trade association official said, is an ``expanding powerhouse,'' with 90 stores and more than $370 million in sales in 1994. The newcomer is intent on taking some of Haynes' market share, as well as picking at other retailers' sales.
The Atlanta-based retailer has been in Richmond for about 46 years, but only recently moved into Hampton Roads.
Haynes generated so much traffic from its sheer size and promotions that it created Furniture Row, several blocks of furniture, carpet and bedding retailers.
No figures were available for exact market share for each furniture retailer, but some numbers reveal shopping patterns.
About 22 percent of customers surveyed in the 1994 Hampton Roads Opinion Surveys, published by The Virginian-Pilot, said they had purchased furniture at Haynes between 1992-1994. The closest competitors were Montgomery Ward with 9 percent and Grand Furniture with 8 percent.
Some analysts and retailers think the Hampton Roads market has become ``over-retailed'' in every area, from discount stores to automobile dealers. Furniture dealers probably are no exception, say several people in the industry.
``If I were a furniture retailer now considering this area, I would not come into this area unless there was a niche I could fill,'' said Bill Kitt, manager of the Virginia Beach Haverty's until recently.
Haynes officials see no reason why competitors might cut into their market. The company covers a broad range of customer pricing levels, with sofas running anywhere from $399 to $1,299.
Mike White, Haynes' vice president of sales and merchandising, said the company doesn't focus on head-to-head competition in this market. Instead, he said, Haynes concentrates on getting customers to spend money on furniture versus big-ticket items like vacations, cars and televisions.
``I think it's absolutely great for the customers to have so many retailers out there,'' said White. ``I think it's very healthy for the retailers, too. . supposed to be doing.''
Haverty's and other retailers moving into Hampton Roads see growth. They say the effects from the defense budget cuts already have been felt and are behind the area. And with a healthy housing market over the last several years, retailers here have little to complain about.
Furniture purchases generally lag behind residential real estate sales, so even a recent slowdown in home buying would not immediately impact furniture retailers, said Joe Logan, director of finance and research at the American Furniture Manufacturers Association in High Point, N.C.
For 1996, the organization is predicting that U.S. manufacturing shipments of residential furniture will increase 5.7 percent to $20.7 billion. That's a moderate and steady increase, Logan said.
But even with rising furniture sales, the industry itself is consolidating - bad news for small, family-owned furniture retailers. In 1994, the Top 100 U.S. furniture stores' market share grew to 38 percent from 35 percent a year earlier, according to Furniture Today. They sold more than $11.2 billion in furniture, bedding and decorative accessories. That's up 15.5 percent from $9.7 billion in 1993, much higher than the 6.7 percent increase in sales for all furniture stores nationwide.
``The furniture industry itself if going through an adjustment period,'' said Bert Crawford, co-owner of the Ethan Allen furniture stores in Virginia Beach and Williamsburg.
``The bigs are getting bigger and the smalls are getting smaller. The furniture industry as a whole is not sure where it's going to go.'' ILLUSTRATION: [Cover]
FURNITURE ROW
HUY NGUYEN
The Virginian-Pilot
[Color Photos]
HUY NGUYEN photos
The Virginian-Pilot
Havertys, the nation's seventh-largest furniture-store chain, moved
into Hampton Roads with two stores last year.
Haynes generated so much traffic from its sheer size and promotions
that it created Furniture Row, several blocks of furniture, carpet
and bedding retailers.
Havertys
Gail Klima, sales consultant at Havertys, helps Robbie Jr., left,
and Kaitlyn, right, with their choice of a bedroom set. Havertys, as
a trade association official said, is an "expanding powerhouse,"
with 90 stores and more than $370 million in sales in 1994.
Haynes sales associate Kathy Mateer, left, assists James and
Christina Spurgers of Chesapeake with a bedroom set. About 22
percent of customers surveyed in the 1994 Hampton Roads Opinion
Surveys, published by The Virginian-Pilot, said they had purchased
furniture at Haynes between 1992 and 1994.
HOW THEY RANK
Some of the top 100 U.S. furniture stores, based on 1994 sales
figures and units.
GRAPHIC
[For a copy of the graphic, see microfilm for this date.]
Where Hamtpon Roads customers purchase Furniture:
GRAPHIC
[For a copy of the graphic, see microfilm for this date.]
The Virginian-Pilot
by CNB