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Housing market delivers home furnishing retailers
By Kathleen Dayton
Staff Writer
As residential development steams along and the Charleston area’s population continues to balloon, furniture stores and homegoods retailers are flocking to the area like never before.
Big stores such as Broyhill are among the players, but Charleston shoppers also have a slew of home decor boutiques to browse, including niche retailers selling bar stools, lighting, patio furniture and bathroom fixtures.
What do all of these choices mean for the consumer, and is the area at risk of being over-stored?
“I think you can get over-stored,” said Scott Krugman, spokesman for the National Retail Federation. “I think the market automatically corrects itself if it does become over-stored. That’s what competition is for. Eventually, the stores that are doing it right, whether it’s location, product selection or pricing, those are the ones that win.”
Consumers will also be the winners as more home furnishings retailers set up shop, Krugman said.
“The consumer is going to win with competitive pricing, with great selection and, hopefully, with improved customer service,” he said.
Broyhill opened its furniture gallery in Mount Pleasant less than a year ago.
“We decided on Mount Pleasant just because Charleston is a growing market and Mount Pleasant is a growing area,” said Todd Benfield, the store’s owner/operator. “The demographics of Mount Pleasant match the values and the merchandise that Broyhill offers. Most all furniture businesses look for growth in markets and homeownership.”
Eyeing the market
Some of the furniture chains that haven’t set up shop in the Charleston area yet have their eyes on the market.
“Charleston really is in our top five in terms of markets that we want to go into in the next 12 months,” said Mike Whitten, director of dealer development for Badcock Home Furniture &more.
The company is reviewing real estate options and suitable dealers for possibly two or three Charleston area stores, Whitten said. Other markets the Mulberry, Fla.-based company is considering include Winston-Salem, N.C.; Raleigh, N.C.; Richmond, Va.; and Norfolk, Va.
“We’ve done enough research on the Charleston market to determine that most of the demographics of that market fit our demographics very closely,” Whitten said. “It tends to be a very dynamic market in terms of new home starts. We recognize that there is obviously significant competition in Charleston, as there is in most medium-to-large markets, but not all the competitors you see are direct competitors of Badcock, so we feel we can come into the market and do very well.”
As consumers clamor for homegoods and furniture, even clothing retailers such as Gwynn’s in Mount Pleasant and discounters such as Target are adding homegoods and furniture to their mix. If they sell enough of these items, it helps improve their profit margin, said Britt Beamer, chief executive and founder of Charleston-based America’s Research Group, a consumer and market research firm.
“It’s a growth category, but there’s no easy way to do it,” Beamer said. “Furniture retailing is not as easy as it looks because the warehouse space it takes to do it right is extremely expensive.”
Too much competition?
Southeastern Galleries has managed to flourish in Charleston’s furniture arena since 1955, even while national chains such as Rhodes and Heilig-Meyers have come and gone.
Mounting competition in the area has not affected business, said owner-operator Bill Cooper.
“Our business has grown more significantly in the past five years than it has grown in times before,” Cooper said. “We’ve got people that are third generation (buyers) that we’re dealing with, and we’ve got people that have come here this past week that moved here from Singapore and London.”
On Charleston’s upper King Street, several blocks have evolved into what has become known as the “design district.”
Leigh Meadows-McLain, co-owner of Dwelling, a retailer of furniture and decorative accessories on upper King Street, opened her store 4 1/2 years ago, when there was little competition.
“Now, we have more than 30 businesses that have some emphasis on design, including some of the national (chains) such as California Closets, Waterworks and Maine Cottage,” Meadows-McLain said.
She chose the location because she needed a large space to display and stock furniture and there were few downtown locations that offered enough space that was affordable. It was also within blocks of six architectural firms and several interior designers.
Now other home furnishing retailers have caught on to the area.
“Here in the design district, it’s a draw,” Meadows-McLain said. “It’s not just a local draw, it’s a regional draw and a national draw. We service private clients and trade professionals all over the world.”
Krugman of NRF said retail sales in the home furnishings sector have been performing strongly on the national level for several months.
“Obviously, you’ll be taking a look at the housing market in your particular area and, ultimately, that will dictate how well that category will perform,” Krugman said. “Usually there’s about a six-month lag time between a slowing housing market and slower gains in the home furnishings market. You’re still in a very strong housing market and that can be part of the reason why you’re seeing such an explosion of home furniture in that particular area.”
The Charleston Metro Chamber of Commerce is forecasting about 12,000 new jobs for the tri-county area this year.
“That’s a lot of jobs, and they’ve got to live somewhere,” said Scott Moore, manager of the chamber’s Center for Business Research. “You build a house, and you’ve got to put something in it.”
Kathleen Dayton is a staff writer for the Business Journal. E-mail her at kdayton@charlestonbusiness.com.
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