While not quite as popular as the television shows including “Storage Wars,” “Parking Wars,” or even “Cupcake Wars,” Phoenix is in for a “war” of its own with the onslaught of heavy-hitting furniture retailers coming to Phoenix.
In the next few months look for grand openings of huge “super stores” that will knock your socks off in terms of size, selection, pricing and speed of delivery.
These new furniture companies that are investing in the Phoenix area are further proof that the local economy is on the rebound and confidence is returning both from the retailer perspective and consumer perspective.
It’s no surprise to anyone that housing sales and furniture sales go hand-in-hand. The recent upswing in the Phoenix area residential market is further proof. Housing prices in the past year alone have risen 22% to a new median housing price of $180,000. New construction is commencing in many communities previously put on “pause” from the recession, and new home permits are on the increase.
This coupled with positive job growth, increased in-migration, and lower unemployment numbers are all helping to fuel the improved economic outlook in Metro Phoenix.
The furniture market in Arizona is very competitive. In fact, there are several operators in the Valley listed in Furniture Today’s Top 100 list. The RoomStore of Phoenix is ranked No. 72 on the Top 100 list, and EBCO, the Phoenix-based La-Z-Boy Furniture Galleries licensee is ranked No. 84.
Mattress Firm is ranked No. 6 and had the greatest net sales gain growing its sales three-fold in the past year alone. Mega Furniture has increased its store count to 10 in the past two years with its three newest stores in the Southeast Valley.
“The expansion of furniture retailers has been one of the brighter spots across the country,” said Darren Pitts, executive vice president at Velocity Retail. “With home improvement struggling during the recession, furniture purchases offered an alternative to many cash-strapped consumers.
“High-performing furniture retailers have continued their expansions across the country. Velocity Retail Group specializes in representing home furnishing retailers. We have completed transactions of almost 1.5 MSF in the past few years.”
As far as the new “super stores,” the first grand opening will be Aug. 8 when Living Spaces extends its reach outside of California for the first time with a new store in Scottsdale. It is taking over the 130,000 SF former Great Indoors space at Frank Lloyd Wright and Scottsdale Rd. in the Scottsdale Promenade shopping center.
Living Spaces is based in southern California and this will be its ninth store in the chain. Living Spaces is ranked No. 36 on Furniture Today’s Top 100 list with estimated sales topping $200M in 2012.
The Scottsdale store will feature more than 150 living rooms, more than 70 bedrooms and an assortment of other goods including dining room, youth bedroom, home office furniture and accessories. Also will be an Elements accent gallery that the retailer said will feature one-of-a-kind pieces from around the globe.
A second store will be located on 23 acres at the SEC of 67th Ave. and I-10, which will be a combination warehouse and retail showroom. The warehouse, which is currently open, comprises 315,000 SF, with the store nearly 123,000 SF. The company’s promise of same day delivery necessitates a warehouse component along with their stores.
The chain reports that more than 150 new jobs were created with these two locations. It was reported that the company is negotiating on a parcel in the Southeast Valley across from San Tan Regional Mall at Williams Field Rd. and the Loop 202.
American Furniture Warehouse expects to open its 550,000 SF facility at Power Rd. and the Loop 202 in Gilbert this year. The Englewood, Colo., retailer is building the facility on 73 acres of former farm land. The plans call for a 150,000 SF showroom and a 400,000 SF distribution center.
It was reported that AFW is in negotiations to buy 47 acres of land for a west side location at the SWC of Bethany Home Rd. and Loop 101 in West Phoenix. The site would have a 350,000 SF facility.
American Furniture Warehouse ranks No. 23 on Furniture Today’s Top 100 list with estimated sales topping $323M in 2011.
The furniture industry is poised for growth; the top 100 stores have recorded double-digit growth in the past year, with predictions even rosier for the future. The added competition will keep prices down, and the new stores will bring greater selection.
With more new home construction, continuing positive in-migration and pent-up demand from customers who have reigned in their spending over the past five years all add up to positive news for retailers and customers alike. It’s a great time to be a consumer in Phoenix.
Dave Cheatham of Velocity Retail Group is an authority on retail real estate in the disciplines of brokerage, project leasing, development, consulting and advisory services. He is a senior advisor to merchants, entrepreneurs, investors and senior retail executives throughout the industry.