Home Stores are Living Large

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\"RRWhile everyone and his realtor knows all about McMansions and the oversizing of the Great American Home, hardly anyone is paying attention to the fact that the stores where people buy all the home furnishings products to put into those colossal-sized homes are also getting larger and larger.

In a retail landscape where market share is slowly but surely moving online and one-time physical store powerhouses like Linens’n Things, Circuit City and, just recently, Anna’s Linens, are now just mall memories, some retailers are moving in the opposite direction. Seemingly counterintuitive: Why would you move to larger stores with more inventory and higher breakeven points when many national chains are downsizing?  The surge to the square-foot splurge is happening with surprising frequency.

Furnishings operations like At Home (the retailer previously known as Garden Ridge), RH (the retailer previously known as Restoration Hardware) and Nebraska Furniture Mart (same name, but no longer confined to Nebraska) are opening bigger stores, with more to come. All of which raises the inevitable question: Is bigger better? Not that this is exactly a new question. Home furnishings stores have traditionally been larger than their apparel brethren, which of course makes sense given that sofas, big TVs and major appliances are larger than skimpy tops and short shorts.

The granddaddy of the big home store is IKEA, the Swedish import that virtually invented the store-on-steroids school of merchandising. Its giant, total-home stores – usually situated off major highways away from major shopping venues – have been the go-to source for generations of…well, generations that had limited budgets and limited space.

IKEA continues to open its ginormous stores around the country, offering everything from cocktail napkins to full living room collections, and while it has said it is experimenting with small units in Europe, its American strategy clearly adheres to the more-is-more philosophy.

Imported from Nebraska

That is also the pedigree for Nebraska Furniture Mart, which just recently opened its fourth store, in suburban Dallas, that tops out at more than 500,000-square-feet and situates touch-screen maps around the store. That’s a good thing too. The two-floor location is, as the name implies, heavy on the furniture side, but also sells floor coverings, consumer electronics, lighting, home textiles, major appliances, kitchen cabinets, housewares, tabletop china and glass and home décor items. And it’s not bashful about any of it, with heavily vignetted displays and duplicated, triplicated and quadraphonic presentations throughout the store.

It’s the MO the store has perfected ever since Russian immigrant Rose Blumkin opened a small furniture store in Omaha in 1950. Mrs. B, as everyone called her, had a diminutive stature, standing less than five feet tall, in direct opposite proportion to the increasing size of her store. In the meantime, the Omaha store got bigger and bigger, eventually attracting the attention of another resident of the town, a fellow named Buffett. In 1994 he bought NFM and while the Blumkin family continues to run the store, Berkshire Hathaway used it as the cornerstone of a division that now encompasses several furniture retailing nameplates around the country.

But none compare to Nebraska, which opened ever-bigger stores, first in Des Moines, than Kansas City and now Dallas. The store has several restaurants, a computerized parking management program and a sophisticated RFID price tagging system that is as state-of-the-art as exists in retailing today.  But most of all it has scale, looming over the new Rooms to Go store across the highway, a drive-through photo processing kiosk by comparison.

Making Itself At Home

As it happens, Dallas is also the corporate headquarters for At Home, which bills itself as a home décor superstore, but just as is the case with NFM, has a name that doesn’t do the store justice. With average store sizes in the 150,000 to 175,000-square-foot range, think of At Home as the genetic mutation of the marriage of Home Goods and Michaels, with serious touches of Bed Bath and Beyond, your local outdoor furniture store and every home accessory you’ve ever seen out on the highway.

At Home began life as Garden Ridge more than 20 years ago, initially based in Houston and generally keeping its stores in the Sun Belt states. Over its lifetime, it has had assorted financial travails, but more recently private equity has come in with big plans – and a bigger wallet – to expand to retailer into more parts of the country… presumably eventually reaching Wall Street. Along with the new owners came a new name that the store says better reflects its overall merchandise mix, avoiding the pigeonholing that its previous outdoorish name might have led to. At Home very much adheres to the big box format, with massive drive aisles, stack-em-and-rack-em displays, appropriately scaled shopping carts suitable for a credenza or two and centralized checkouts. Not to mention enough inventory on the floor to fill a good-sized suburban town. If you are shopping for bar stools, the typical At Home store has 350 of them on the selling floor.

The RH Factor

You won’t find many – if any – bar stools on the floor at RH, which is in the process of reinventing itself for at least the second or third time in its relatively short history. As written about previously in “The Robin Report,” RH is undoubtedly the most influential home furnishings store in the country right now, due both to its prodigious direct mail efforts and its latest generation of retailing locations.

The current incarnation of RH is best personified by its recently opened 70,000-square-foot Atlanta flagship – although CEO and guru Gary Friedman doesn’t like the label because it implies a money-losing showplace, not a profitable store. Looking more like a luxury condominium complex than a store, the RH Buckhead location takes merchandising to an elegant and sophisticated level never before seen in the generally drab environs of furniture retailing.

All of this home furnishings store super-sizing is not without its counterparts elsewhere in retailing. H&M continues to open ever-larger locations, including a 63,000-square-foot store across the street from Macy’s on Herald Square in New York that is its largest American store…succeeding its previous largest store in America that had only opened a few months prior.

Down in Memphis, Bass Pro Shops has opened a huge store in a building called The Pyramid that it bills as “one of the largest stores in the world.” And that’s hard to argue with. It has a 28-story open atrium in the middle, a 103-room hotel, a full-service restaurant and an alligator habitat that at 84,000 gallons is bigger than most stores all by itself. This iconic symbol of Memphis has been used for various purposes over the past several decades, all with varying degrees of non-success. But one has to think Bass has the potential to make it work this time.

Why XXL is an Excellent Strategy

What all of these jumbo stores have in common is one thing: a concerted effort by physical retailers to make the act of going to a store and shopping an addictive alternative to online.

It’s that simple.

Friedman of RH says before the retailer started opening these new-generation stores there was no physical manifestation of its merchandising story. As it rolls out these stores, he expects the percentage of the company’s sales being done online to decline – as shoppers get to experience the products in person. At Home has virtually no online business and Nebraska knows its product mix lends itself to in-store rather than online retailing.

All of them know they better have something special to get shoppers off their computers and into their stores. And if somewhere in retailing heaven you hear a little snicker it’s maybe because Marvin Traub, the retailing visionary who created the modern Bloomingdale’s mystique, is sitting back – nattily dressed, of course – and telling anyone who will listen that retailing as theater has always been the key for success in the business.

He took a down-on-its-luck, lower-end department store with an out-of-the-way location and a bad physical layout and made it the most aspirational, talked-about department store in the history of the business by creating a store that New Yorkers had to see in person. Today’s generation of best-in-class retailers are doing it with scale and size but really it’s not just that bigger is better: Better is better.

Warren Shoulberg is editorial director for several home furnishings business publications at Progressive Business Media and wished he had roller skates when he recently visited the new Nebraska Furniture Store in Dallas.



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