City plans growth push
A dozen Ashley stores, first Gulf Coast locations on tap
By Clint Engel -- Furniture Today, January 12, 2004
TAMARAC, Fla — TAMARAC, Fla. — City Furniture is spreading its wings with an aggressive expansion plan that includes the opening of a dozen dedicated Ashley Furniture HomeStores and a jump to Florida's Gulf Coast.
The Top 100 company will begin construction next month on a 220,000-square-foot addition to its 660,000-square-foot headquarters, distribution center and showroom here — a $12 million project including additional land acquisitions that City President Keith Koenig said should increase the retailer's capacity by nearly 50%.
Koenig said the company hopes to enter Florida's west coast with City stores in Fort Myers, Naples and Bonita Springs in 2006 and 2007 as well as Ashley stores in Fort Myers and Bonita Springs.
In southeast Florida it is negotiating a land lease for a 75,000-square-foot prototype City store near the downtown Dadeland business district and is eyeing sites for a 60,000- to 70,000-square-foot store in Stuart. The new format is upscale in character, he said, with three levels, an atrium and a Starbucks-like coffee shop.
By the end of this year the company hopes to have three City stores under construction and over the next three years it anticipates opening 12 dedicated HomeStores, all in South Florida.
Ashley's "product line is huge and excellent and it deserves its own retail store format," Koenig said. He wouldn't say how much of City's business Ashley is expected to account for when the expansion is completed, but said the line currently accounts for more than 10% of sales. "We expect our Ashley business to grow exponentially," he said.
City Furniture stores will continue to carry Ashley even after the dedicated stores open because the "line is so broad and so good and getting better every market, we're going to want to carry more than we can fit into the Ashley HomeStores," Koenig said.
"We've been doing business with City Furniture for nearly 20 years," said Ashley Chairman Ron Wanek. "We saw his business evolve from waterbeds and bedding and accessories to the outstanding (full-line) retailer that he is today. We've always valued our relationship with them and we're excited about it."
Todd Wanek, Ashley chief executive officer, added that City's move is in keeping with the HomeStore program designed for existing dealers.
Some of the Ashley stores will be converted from smaller, 30,000- to 40,000-square-foot City Furniture units in Southeast Florida as the company moves to larger, multi-line stores.
Koenig said he hopes to open the first Ashley store in April in Sunrise, Fla., at a former HomeLife Furniture location on Sawgrass Mills Circle. Another will open in the City Furniture space in Dadeland after the retailer relocates to a new prototype store to be built in the same area, but that's over a year away, he said.
In some locations, including Stuart, Ashley and City stores will be built side-by-side, Koenig said, with separate entrances but shared access from the inside "to make customer shopping easy, convenient and fun."
Koenig called the Ashley alliance a "marriage made in heaven." He added, "Their product line is enormous, and it is so good, they really deserve their own format."
Ashley Furniture HomeStores was the fastest growing retail chain on Furniture/Today's Top 100 last year with estimated 2002 sales up 150% from the previous year to $350 million at 102 stores.
The company would not disclose 2003 sales, but Todd Wanek said the program "had nice growth in 2003." At year's end, the network had grown to more than 120 stores and was in most states.
Ashley already has several stores in Florida, but Ron Wanek said they are mainly in the northern part of the state and won't conflict with Koenig's plans.
City Furniture ended the year with 13 stores and sales of more than $260 million, up from $220.7 million in 2002.
City also is considering a second 520,000-square-foot expansion at its Tamarac distribution center that would push space at the complex to 1.4 million square feet. The timetable for that addition is not set but would likely happen in three to five years, Koenig said.
