DATE: Saturday, November 15, 1997           TAG: 9711150286

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MIKE ABRAMS, STAFF WRITER  

DATELINE: VIRGINIA BEACH                    LENGTH:   92 lines

A FORMULA FOR FURNITURE

When it comes to their newest store, the people who run Haynes Furniture Co. are banking on the idea that good stuff sells itself.

They describe their high-end Hilltop showroom, North Carolina Co., as ``utilitarian-chic'' - a blend of function and class.

The eighth location for the Virginia Beach-based home furnishings retailer opens this morning in a 60,000-square-foot chunk of strip mall off Laskin Road.

The concept: Give shoppers the feeling of strolling through an upscale warehouse where quality furniture is ready to go at North Carolina outlet prices.

Decorative touches include 3,000 feet of museum track lighting, an intentionally exposed ventilation system, ceiling fans and wooden display pagodas.

Each element, including a welcoming wall quote by architectural icon Frank Lloyd Wright, is meant to direct attention to the furniture.

E.J. Strelitz, president of Haynes, said he will use his buying muscle to acquire top furniture, sell it at big discounts and make money by satisfying

shoppers with quicker delivery than they've traditionally experienced. ``We're not Mother Teresa,'' he said earlier this week, as workers put the finishing touches on the showroom. ``We're in this to use our competitive advantage to make money.''

The same items won't be around month after month in this store. Instead, Haynes will buy an eclectic mix of international styles from manufacturers on the gamble that it will sell fast.

Many items will be ready for immediate delivery, and a large group of ``quick-ship'' pieces will take just a few weeks to arrive.

Haynes has worked with manufacturers to trim fat from furniture delivery times, cutting the average from 12 weeks to four. For example, instead of offering thousands of fabric colors, the company persuaded vendors to narrow the choices to cut production time.

The market leader in Hampton Roads, Haynes operates a 300,000-square-foot building off Virginia Beach Boulevard that houses its main offices, a warehouse and a showroom. It also owns The Dump discount centers in Norfolk, Hampton and Richmond, and Haynes stores in Hampton and Richmond.

The retailer first converted one of its original two Haynes stores in Richmond to the Carolina format in 1993. The second Carolina store has moved into the former Leggett Outlet Center in Hilltop Plaza.

Despite the region's lagging household incomes relative to other metropolitan areas, Strelitz is confident that upscale furniture will sell. Hilltop's surrounding affluent neighborhoods make it an attractive retail location.

Where Oriental rugs at Haynes start around $300, those at North Carolina Company will cost from $1,000 to $8,000.

At Carolina, a custom dresser might come in dozens of finishes for a non-negotiable price. At Haynes, sales are a way of life.

Carolina will have a $5 million inventory in its 60,000 square feet of selling space. The 100,000-square-foot showroom at the flagship Haynes has a $3 million inventory.

Strelitz said he'll sell the Carolina furniture at about 20 to 30 percent above his cost, a figure he said is well below industry standards.

``People think you can't sell furniture at this low of a profit margin,'' he said. ``The formula has been a high markup. But customers are older, smarter, wealthier.''

And shoppers won't find ornate set designs or row upon row of traditional furniture at the new store. This weekend, for instance, they might notice a retro Barbara Berry-designed Baker bedroom set along one wall.

``I am so tired of just one more 18th century bedroom set after another,'' Strelitz said.

Like some fellow local furniture retailers, Jens Larsen, president of Scan-World, welcomed his competitor to the same shopping center.

``We don't really see it as competition,'' the store's president said, explaining that he caters to a niche. ``It will bring more customers here.''

Felipe Perez, manager of Havertys Furniture on Virginia Beach Boulevard, said he plans to check out Carolina. ``To stay on top of everyone else,'' he said, ``you have to shop them to see what they offer.''

Still, he said, Havertys applies a time-tested formula that won't change because of one new store.

According to rankings by Furniture Today, a weekly trade newspaper, Atlanta-based Havertys ranked fifth nationally with $456.9 million in furniture, bedding and accessories sales last year.

Haynes - with about 50 fewer stores - ranked 42nd nationwide with $82.8 million in the same survey. Strelitz said he hopes Carolina's 40-member sales staff can produce about $15 million in transactions the first year, about $20 million less than the flagship store does annually. ILLUSTRATION: Color photos

BILL TIERNAN/The Virginian-Pilot

North Carolina Company's 60,000-square-foot warehouse will open

today...

E. J. Strelitz

Graphic

The Company and The Strategy

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