Friday, February 20, 2009
Home-town retailer is finding room to grow in Lone Star State
San Antonio Business Journal – by Tricia Lynn Silva
Finding value-priced home furnishings is about to get even easier for San Antonio shoppers.
Late last week, locally based Furniture Factory Warehouse celebrated the grand opening of store No. 5 in the San Antonio area.
The retailer is the latest addition to The Forum at Olympia Parkway shopping center. The firm leased a 12,500-square-foot space at the retail center that was previously occupied by another player in its field: Old England Furniture.
The Forum is located along the Loop 1604/Interstate Highway-35 corridor. The center spans 1.2 million square feet along the border of the cities of Live Oak and Selma, just northeast of San Antonio.
Robert O’Farrell, a vice president of SRS Real Estate Partners, represented Furniture Factory Warehouse in its lease. O’Farrell is a member of the San Antonio/Austin division of SRS.
The Forum is leased by United Commercial Realty (UCR) San Antonio. UCR Partners Guyla Sineni and Craig Garansuay, and associate Michael Garansuay, oversee the assignment.
One down …
Gilbert “Gibby” Whitt, operations manager for Furniture Factory Warehouse, says his company plans to open two more stores before the end of 2009. One of those stores will be in San Antonio, “most likely on the South Side,” Whitt adds. The second is set for another city in Texas. Just where, however, is still being determined.
Since its inception 18 years ago, Furniture Factory Warehouse has evolved into a 12-store chain.
Each store employs anywhere from 10 to 15 people – a mix of full- and part-time personnel.
Besides the new store at The Forum, Furniture Factory Warehouse also has a store on Evers Road in Northwest San Antonio; one off of Interstate Highway 35 on the Northeast Side; and a store on San Pedro in North Central San Antonio. Its distribution center is located off of Broadway, just outside of Loop 410 on the North Central Side.
Outside of San Antonio, the company has two stores in McAllen; two in El Paso; and one store each in Corpus Christi, Harlingen and Brownsville.
At a time when many furniture/home-accessories stores are closing their doors rather than opening new ones, what’s been Furniture Factory Warehouse’s secret to survival?
Some logistical know-how has helped. The chain prides itself on keeping the distribution center stocked up so that items are ready to go when the customer orders them, Whitt says.
Now what?
City of Commerce, Calif.-based 99¢ Only has suspended its plans to exit the Texas market – at least for now.
As previously reported, the new strategy came after a “significant improvement” in January sales in Texas, said 99¢ Only CEO Eric Schiffer during a recent phone conference call to discuss third-quarter 2009 sales for the chain. During the four-week period ended Jan. 24, 2009, the Texas stores reported an 8.6 percent increase in same-store sales. By comparison, for the five weeks ended Dec. 27, 2008, same-store sales in Texas were up by only 0.8 percent.
But 99¢ Only still plans to close one third of the 47 stores its has in Texas. And with the chain’s 2009 fiscal year coming to a close at the end of March, the final list of stores headed to the chopping block should be finalized pretty soon, says Robert Kautz, executive vice president and chief financial officer of 99¢ Only.
San Antonio, however, might just come out of this thinning of the herd relatively unscathed, local observers say.
With San Antonio shoppers “tightening their belts” these days, 99¢ “should continue to perform well,” says Cynthia Ellison, a senior vice president with the retail group of the local office of Grubb & Ellis Co.
The chain’s five local stores range in size from 16,000 to about 18,500 square feet. They are located in centers that have been able to offer competitive rental rates, and the concept has been popular with shoppers, says Chuck Siegel, who is the president of locally based real estate firm Rohde Ottmers & Siegel Realty Services.
“I strongly believe San Antonio outperforms the (other stores in the) Texas market,” Siegel adds.
Glass half what?
For the month of January 2009, retail sales among the country’s chain stores fell by 1.6 percent compared with the same month in 2008, according to the latest Chain Store Sales Trends report by the International Council of Shopping Centers (ICSC) in New York.
The January results mark the fourth consecutive month of year-over-year retail sale declines, notes Michael P. Niemira chief economist and director of research for ICSC.
The good news, if there is any: The decline was not as steep as initially anticipated, Niemira adds.
But that may be the best anyone can hope for – for now. Niemira expects that February sales will be down between 1 percent and 2 percent, compared to sales for the same month in 2008.
TRICIA LYNN SILVA’S Real Estate Roundup column appears weekly. Silva can be reached via e-mail at [email protected].