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Florida-based furniture chain to open Charleston stores
By Kathleen Dayton
Staff Writer
The waning housing market is not slowing one furniture retailer’s plans to expand into the Charleston area.
W.S. Badcock Corp. announced earlier this year that Charleston was among the top five markets it had targeted as the company forges ahead with major expansion plans. It plans to add 60 to 70 new stores to its portfolio in the next few years.
The 102-year-old home furnishings retailer, based in Mulberry, Fla., currently operates about 320 stores around the Southeast. The company has 32 stores in South Carolina and 31 in North Carolina and wants to expand in both states.
The chain wants to open a store in Myrtle Beach, but its plans for the Charleston market are more extensive.
“We still believe Charleston can be a two- or three-store market for us,” said Mike Whitten, Badcock’s director of dealer development. “I’m hopeful that within calendar year 2007 we’ll have two stores there. Badcock is a store that’s done well in suburbia, but not necessarily urban markets. Small- to medium-sized markets have been our forte for the past 75 years.”
Whitten’s company sees the slowing housing market as more of a correction back to a reasonable growth rate and does not think coastal areas will see much negative impact, he said.
“Coastal regions like Charleston, Myrtle Beach and Florida tend to attract a lot of Northern second-home buyers, and that’s not going to stop any time soon,” Whitten said. “The other thing is, if people don’t want to move or relocate, many times they’ll remodel their existing home, and you’re not going to remodel your home and put all the same old things in there.”
Badcock stores consistently report increases in the 5% to 7% range for comparable store sales year over year. Those increases have flattened slightly this year, but are still beating the industry average, he said.
At the chain’s semi-annual dealers meeting, held in September in Myrtle Beach, company officials announced a 4.6% sales increase for Badcock stores during fiscal year 2005, surpassing the industry average of 4.1%.
Seventy-five percent of Badcock stores are individually owned. In 2006, the company has added six new dealers who have opened one or more stores. Whitten is currently canvassing the Southeast for entrepreneurs interested in opening a Badcock store and hopes to find one owner for the multiple locations planned for Charleston.
The company revamped its format in 2000 with the Badcock Furniture & More concept, which officials say is helping the store attract a wider customer base, including younger buyers and customers who have disposable income as well as those who want to pay on credit.
The company is about two-thirds of the way to completion of converting all of its stores to the new format and all new stores will be built under the new image, Whitten said.
Newly converted stores had an average sales increase of 18% during their first year, the retailer reported at its September dealers meeting. Badcock opened a $9.5 million, 200,000-square-foot distribution center in Mebane, N.C., two years ago and plans to spend $8 million to $10 million on expanding into new markets.
Across the country, the home furnishings sector is continuing to perform well according to government data reports, said Scott Krugman, spokesman for the National Retail Federation.
“I think we have to look at the industry with a little more caution, but these things come in cycles,” Krugman said. “It’s usually about a six-month delay from when a housing market slows down to that impact in the home furnishings sector, and that’s usually true when the market picks up.”
Al Parish, director the Center for Economic Forecasting at Charleston Southern University, said the tri-county area could absorb more furniture stores, depending on location.
“Hopefully, a store like that would be in Goose Creek or North Charleston,” Parish said. “My hunch is they will put one in Mount Pleasant, and they’ll probably look at one west of the Ashley somewhere. There are thousands of homes going up in Knightsville and there are no furniture stores there, so that’s a real opportunity for somebody to do business out there.”
Despite a drop in existing home sales and residential permits, Parish said the tri-county area is still growing faster than the rest of the country.
“Even if you assume that only half the houses that are on the drawing board are ever built, that’s still 90,000 homes in 20 years,” Parish said. “You’re still talking about 4,500 new homes a year on average. There’s the reason to come in.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at kdayton@charlestonbusiness.com.
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