Break Out the Furniture

Haverty Furniture Companies (Atlanta) has announced plans to acquire seven former Homelife retail stores, which will be transformed into Haverty showrooms. The company is purchasing four of the stores and is leasing three other locations.

“We are making this opportunistic step to replace two stores in existing markets, to open our first store in Clearwater, Fla., and to enter two new major markets for Haverty, with two stores each in Orlando and in the northern Virginia suburbs of Washington, D.C.,” said Haverty's president and ceo John Slater Jr. “The demographic data for these metro areas are strongly correlated to our target customer and our ability to enter these markets at favorable costs is very exciting. The replacement stores will serve our Pensacola, Fla., and Richmond, Va., customers.”

Slater said the “necessary conversion improvements” should be completed and the new Haverty stores opened during the third and fourth quarter of 2002. Expectations are that the seven new stores will produce total sales of about $12 million in 2002 and $42 million in 2003.

In addition to the Homelife stores, Haverty said it will open another metro Atlanta store in Fayetteville, Ga., in February and relocate one of its Dallas/Fort Worth-area stores to the Arlington, Texas, area in next year's fourth quarter. In total, Slater said, nine new stores are planned to open in 2002 and four are expected to close. Net selling area is expected to increase by 5.8 percent, or 204,000 square feet.

“Capital expenditures are expected to approximate $21 million in 2001 and $35 million in 2002,” said coo Clarence Smith. “The 2002 expenditures will include the improvements to the former Homelife leased stores and the two new stores in Georgia and Texas.”

Smith said that November sales are expected to increase by about 5 percent over last year, with same-store sales flat.

Haverty has more than 100 showrooms in 14 southern and central U.S. states. Its strategy has been to grow by enlarging or replacing smaller stores in high-growth markets. Homelife Furniture Corp. (Hoffman Estates, Ill.) was owned by Sears Roebuck, which sold it in early 1999 after nearly a decade of disappointing sales. Once 140 stores strong, it filed for Chapter 11 bankruptcy protection in July.