Sleep Train chugs to top of fast-growth list
Bedding specialists take four Top 10 slots on F/T's composite index
By Clint Engel -- Furniture Today, June 11, 2007
High Point — Ashley Furniture HomeStores may have risen to the top of the Top 100 this year, but for the first time in four years, it won't be crowned the fastest-growing store among the group.
That honor goes to The Sleep Train, the Citrus Heights, Calif.-based sleep shop that posted both the greatest percentage sales gain and net gain in store count of any Top 100 company in 2006.
One of four repeaters from last year's listing of Top 10 fastest growers, The Sleep Train recorded a 70.6% sales increase to $344 million last year, while its store count rose by a net 79 units to 200 stores.
Ranked No. 28 on the Top 100, the promotional to high-end Sleep Train added 27 stores on top of the 55 stores it gained through its acquisition of former Top 100 company Sleep Country USA.
Sleep Train was one of two retailers to show up in four of the five measures Furniture/Today uses to calculate its growth index. In addition to being No. 1 in percentage sales gain and net unit growth, it had the fourth-best net volume gain ($142.4 million) and the third-greatest percentage increase in units (65.3%).
It didn't register among the Top 10 in the equivalent-store sales category, but placed at No. 14 with a 5.3% gain.
Equivalent-store sales is a variation of same-store sales, developed by Furniture/Today for this report. It's calculated by subtracting the percentage change in a retailer's net store count from its percentage increase in sales. Stores which increased in sales but decreased in units were not included.
It's this measure that knocked Ashley Furniture HomeStores out of contention for the fastest-growing store this year. Ashley wasn't among the Top 10 companies based on the growth index — it was No. 12 — despite showing up in the Top 10 of the four other measures except equivalent-store sales.
Among other things, Ashley had the highest net sales increase of all companies, with sales last year climbing $519 million to an estimated $2.1 billion, and the second-best net increase in store count, up 77 stores to 296 units, just behind the 79 net store increase for The Sleep Train.
But Ashley's percentage increase in store count was greater than its percentage increase in sales, which results in a zero score for the equivalent-store sales measure, effectively knocking it out of the running for the growth index crown.
In a trying year for the furniture industry, some of the nation's best bedding retailers clearly had the advantage over conventional full-line stores.
Take, for instance, Houston-based Mattress Firm, No. 2 on the growth index and the only other company to show up in the Top 10 of four out of the five measures. The company had the fourth-greatest percentage sales increase (23.9% to $441 million) and the sixth-greatest net increase in store count (44 units to 358 stores), thanks both to organic growth and the acquisition of Chandler, Ariz.-based Metropolitan Mattress last summer.
Mattress Firm, which was sold in February by majority stakeholder Sun Capital Partners to private equity firm J.W. Childs and senior management, also had the ninth-greatest net increase in sales ($85 million) and the eighth-best equivalent-store sales increase (nearly 10%).
Swedish home furnishings giant Ikea, No. 3 on the Top 100, also was No. 3 on the growth index, posting the second-largest net increase in furniture, bedding and accessory sales — an estimated $300 million to $1.56 billion. That 23.8% increase was enough to give Ikea the fifth-best percentage sales increase among the Top 100.
Ikea's aggressive growth continued as it opened a net four stores. It wasn't enough to register in the Top 10 for net unit growth or percentage increase in stores, but it wasn't far behind — the 12th-best percentage increase in units and a net increase good enough to place it among the upper quarter of the Top 100.
Liverpool, N.Y.-based Raymour & Flanigan made a repeat appearance on the growth index, this time at No. 4, scoring the most points for its sixth-best finish in net volume growth ($125.2 million to $780.6 million in furniture, bedding and accessory sales). It had the eighth-best percentage sales increase (19.1%) and the 10th greatest percentage increase in store count (18.6%, or a net 11 stores to 70 units at year's end).
Last year, Raymour continued to penetrate greater New York and other markets. Earlier this year, it acquired Seekonk, Mass.-based Alperts, giving it entry into Providence and Rhode Island.
No. 5 on the Furniture/Today growth index, Select Comfort, was another repeater and the third of four bedding specialists to crack the Top 10. Its strongest showing was in net store growth, where it had the fifth-greatest increase (46 stores to 442 units at year's end).
The vertically integrated, Minneapolis-based maker and retailer of the Sleep Number airbed also posted the eighth-greatest net sales increase ($95.8 million to $735 million). And that doesn't include Select Comfort's sales through the QVC TV shopping channel, other home furnishings and specialty bedding retailers.
The company aggressively expanded its retail partner program last year, adding its airbeds to 822 stores, up from 353 the previous year. Select Comfort expects this level will be unchanged this year.
No. 6 on the index, another repeater and the fourth bedding specialist among the Top 10, is Sleepy's of Bethpage, N.Y. The 425-store retailer showed up in one Top 10 growth measure, with the third-greatest net increase in stores at 50 units.
And Sleepy's wasn't far behind in the other measures. It had the 11th-greatest percentage increase in sales (15.5%), the 12th-greatest net sales gain ($61 million to an estimated $455 million), and the 19th-greatest percentage gain in store count. Sleepy's also ranked in the top 25 of the Top 100 in equivalent-store sales, up 2.1%.
Ohio-based American Signature, No. 7 on the growth index, had strong showings in both sales and unit growth. The retailer, No. 8 on the Top 100, posted the fifth-best gain in dollar volume (over $142 million to $1.07 billion in furniture, bedding and accessory sales) and the 10th-greatest jump in store count (a net 15 units to 126), tying with Mattress Giant.
American Signature, owned by Schottenstein Stores, has been expanding both its Value City and American Signature stores, as well as a recently launched Roomstoday fashion-oriented format that bridges the gap between the other two store concepts.
No. 8 on the index, Big Sandy Superstore of Franklin Furnace, Ohio, had the sixth-greatest percentage sales increase (23.7% to $120 million in furniture, bedding and accessory sales) as well as the seventh-greatest increase in equivalent-store sales (10.1%).
Corte Madera, Calif.-based Restoration Hardware was No. 9, posting the best equivalent-store sales gain (19%) as the lifestyle retailer grew furniture, bedding and accessory sales nearly 21% in its fiscal year ended Feb. 3, with nearly flat store growth (a net 2 stores to 108 units).
Restoration Hardware had the seventh-greatest percentage sales increase and the 10th-greatest net furniture sales growth ($70 million), tied with Williams-Sonoma.
Northbrook, Ill.-based Crate & Barrel rounded out the Top 10 despite not showing up in the Top 10 of any of the five performance measures. But the 153-store retailer had consistently strong performances across all measures, with the 13th-greatest net gain in furniture, bedding and accessory sales ($59 million to $640.2 million), the 14th-greatest net gain in store count (eight stores to 153 units); and the 17th-best equivalent-store sales gain (4.6%).
Crate & Barrel also was in the top 25 of the Top 100 in the percentage sales gain measure (10.2%) and in the top third with its 5.5% growth in store count.
Just over a quarter of the companies on the Top 100 had growth index scores of zero, due to decreases in sales and units or flat results in both categories. Also, when a retailer joins the Top 100 for the first time and the previous year's results aren't known, the results for this report are figured as flat. Thus, Mexico-based FAMSA roared into the Top 100 this year at No. 75 with U.S. sales of $93.7 million at 24 stores, but didn't score any growth index points.
