by 2nd of 5 planned area stores holding grand opening this weekend
CLEARWATER, Fla. — When City Furniture opened two 100,000-square-foot stores in Naples and Fort Myers, Florida, in 2007, Keith Koenig recalls the response he got at the time, given that the expansion just happened to coincide with one of the worst economic downturns since the Great Depression.
“Back then, those stores were really big and we opened them both in 2007,” said Koenig, chairman of the Home News Now 125 retailer. “I had people saying, ‘Keith, what the heck are you doing opening furniture stores in 2007? The world’s coming to an end.’”
Today, those stores are not only what Koenig described as the most beautiful among its 24 City Furniture locations. They are among the company’s best performers, he said.
Fast forward 17 years with the April opening of its latest store in Largo, part of the Clearwater market that makes up the Tampa metropolitan area.
The 160,000-square-foot showroom, which is hosting a grand-opening celebration that started Thursday, May 2, and continues through this coming Monday, is similar in size to the showroom in its first Tampa-area store in the eastern part of the market that opened last fall.
The two stores also are the largest showrooms in the company’s network and ultimately part of a total of five stores planned for the region. The list includes Sarasota to the south, Wesley Chapel to the north and another location anticipated for downtown Tampa.
Yet the latest Tampa openings have taken place in what some have described as the most challenged furniture retail environment probably since the 2007-08 financial crisis.
Not only have furniture retail sales been among the most consistently worst performing tracked by the U.S. government in recent months. In 2023, existing home sales were also at a nearly 30-year low with the sale of just over 4 million units. Thus a key driver of home furnishings sales has continued to suffer.
Consumer confidence has also been down of late, with furniture sales not a huge priority for many consumers.
Yet Koenig told Home News Now that the newest store had the most traffic in the days that it first opened in early April than of any of the company’s stores “even without any advertising or any fanfare. So it’s been very encouraging.”
He also described the newest Tampa store as “the nicest we have ever done,” ranging from its display of lifestyle vignettes across seven style categories to the way it displays home accents in its City Marketplace gallery.
Spread over two floors, the Clearwater store is a grand showcase of accents from around the world along with upholstery from vendors such as Kuka, Cheers (ManWah), IdeaItalia and its own Kevin Charles line produced in Mississippi. The mix also includes wood furniture from vendors such as Magnussen Home, Universal, Vaughan-Bassett and Bernhardt, not to mention case goods and upholstery from Ashley, its biggest vendor.
Bedding showcased in what Koenig described as “personally what I think is the nicest mattress gallery in the country” include key Tempur Sealy brands Sealy, Tempur-Pedic and Stearns & Foster, along with other brands such as Simmons, Beautyrest and Serta as well as Purple and MLily, plus City’s own private-label brand Rest & Renew.
To address softness in the market as well as the need for variety on the floor, Koenig said the store offers consumers a beautiful and compelling place to shop.
“I think retail, as we know, is theater,” he said, noting that the store’s displays and merchandising are truly meant to engage the customer. “If you think about furniture merchandising, people want to be inspired. But at the same time we have to be very affordable. We have to be very competitive and we’re more competitive and affordable than we’ve ever been and we’re getting more so every day.”
“We have to have creative displays that people are going to love and where they say ‘wow, that’s affordable,’” he added of everything from the home accents to beds that retail from a low of $149 to $1,499. “The customer knows the value of everything and I’m really proud that we have put together really inspiring displays where everything is a good value. … So I am pretty proud, but I promise you we’re going to get better and better, and a year from now we should be even better than we are now.”
That timing — and beyond — will coincide with the opening of its new Sarasota store in about 15 months and its new store in Wesley Chapel in about 20 months.
Of course, Koenig doesn’t pretend that the industry will just turn around overnight. The hope is that interest rates — still just over 7.1% for a 30-year fixed FHA loan — decrease to somewhere between 5.5% and 5.75%, which he believes will get the housing and furniture market moving again.
But he also noted that these new store projects typically take anywhere from two and a half to three and a half years to plan out — the same with the Naples and Fort Myers stores that began planning around 2004.
“You have to have a long-term vision,” he said, harkening back to the development of the Naples and Fort Myers locations. “And I’m telling you what — those stores were accretive during the downturn and they’re now among our very best performers. They are also beautiful stores.”
The plan is to move forward not just with the three other new stores in Tampa, but also a new store in Daytona where the company has purchased land.
“It’s a good long-term bet,” he said of the Tampa area market, which also have plenty of other competitors including Rooms To Go, Ikea, American Signature, Kane’s, Bassett, West Elm and Crate & Barrel, to name several.
Even though the housing market is still down, he believes a turnaround will indeed come. And based on its investments in new retail stores, City appears well poised to flourish.
“When housing is down more than 25% from historical levels, there is no way the furniture industry overall can grow,” he said. “Likewise when interest rates come down, I believe there will be a pretty substantial flip … where you will get back closer to historical norms. When mortgage rates get down to 5 and 3/4 to 5 and 1/2 percent — and a lot of research out there supports this — housing sales will go from about 4 million a year back to historical levels of about 5.2 million to about 5 and a half million homes. If you have essentially a 20%-25% increase in home sales, there is almost no way that furniture comps don’t go up.”
“So we’re all going to be fighting in hand-to-hand-combat,” he added of when mortgage rates get below 6%. “And our business is going to be good, if not great.”
