RoomPlace opens stores in Indy
By Clint Engel -- Furniture Today, March 31, 2008
Indianapolis — Business is off to a brisk start here for The RoomPlace at Harlem Furniture with the opening of its first two stores in the suburbs of Castleton and Greenwood.
Lombard, Ill.-based RoomPlace (which has dropped the "at Harlem Furniture" tag in this market) had a grand opening this month for both new 30,000-square-foot stores.
They're the chain's 21st and 22nd units and its third and fourth outside Chicagoland. CEO Bruce Berman promises more stores to come.
"We are looking for additional locations in Indianapolis as well as other strong markets within a 200-mile radius of our distribution center," he said, adding that it is "extremely likely" a third Indianapolis store will open within a year.
In Castleton and Greenwood, Berman said the midpriced RoomPlace has seen "great customer feedback" to its room-package format and merchandise offering, despite head-on competition from Indianapolis mainstay Kittle's. A Top 100 company like RoomPlace, Kittle's operates two Kittle's Rooms Express room-package stores here, including one just down the street from the Castleton RoomPlace store.
The similarities extend as far as an identical slogan used in the stores' promotional materials — "The more you buy, the more you save" — although the assortments vary dramatically with RoomPlace skewed more to urban and contemporary.
"The conventional wisdom of the industry told us we needed to have more country, plaid sofas, oak," as the chain moves outward from Chicago, Berman said. "We decided it would be better to try it our way."
And that plan appears to be working. "The most contemporary (product) in the store is selling the best," he said. "Customers have told us they're excited about what we've brought new to the market."
Kittle's Chairman Jim Kittle, meanwhile, said business at his stores is up since the arrival of RoomPlace, which apparently has driven traffic to both retailers.
The Castleton RoomPlace showroom is light, open and immaculate, with furniture vignettes largely arranged by style and packaged in groups under RoomPlace-created collection names such as Bravada leather upholstery and the high-gloss Positano bedroom — both from Global Furniture.
Other suppliers include Lifestyle Enterprise, New Generations, Simmons, Sealy and Tempur-Pedic. RoomPlace also carries private-label bedding called Medallion.
Berman said bedding remains a strong, growing category. He said that since the retailer added Tempur-Pedic in August, bedding sales are up about 20% and "it appears to be incremental."
RoomPlace won't release sales projections here, but Chief Operating Officer Geoff Maxwell said sales are ahead of expectations, and that the company expects to meet or beat its overall sales-per-square-foot average.
Furniture/Today estimates that RoomPlace did more than $197 million in 2007 sales with 19 stores most of the year. Average sales per square foot are estimated at about $548, well above the industry average.
RoomPlace opened its first store outside its home market of greater Chicago in Mishawaka, Ind., early last year and its second in Rockford, Ill., in October.
In December 2004, three private equity firms teamed up with Berman to acquire the former family-owned Harlem Furniture. Maxwell, who had been a consultant to the investors, was brought in to work with the retailer's management team on a growth plan. Berman was impressed with Maxwell and asked him to stay on as COO in January 2007, filling a vacant position.
Neither executive would provide many details about expansion plans, although Berman said the retailer saw the potential for four to five stores in Indianapolis. But it could take years to get there, he said.
Berman also said it's unlikely RoomPlace would enter Milwaukee — another major market within reach of the Woodridge, Ill., distribution center — anytime soon. He said there are big differences between growing markets like Indianapolis and others like Milwaukee that are less vibrant and less appealing to young consumers entering the work force.
RoomPlace delivers within three days of orders. In Chicago, the retailer offers next-day delivery seven days a week and expects to get to that point in Indy as well, once it builds up its density of stores and market coverage, Berman said.
