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Jose Toledo, left, and Jose Delgado load furniture onto a truck from the new 175,000-square-foot warehouse Walker Furniture has leased at Dermody Business Center. With $45 million in annual sales, Walker has outgrown its warehouse on Martin Luther King Boulevard, said Larry Alterwitz, president and chief executive officer of the 45-year Las Vegas furniture retailer. Photo by Clint Karlsen. Related Story Consignment stores offer bargains

Sunday, October 01, 2000
Copyright © Las Vegas Review-Journal

FURNITURE SALES: Table-and-chair affair

By HUBBLE SMITH

REVIEW-JOURNAL

The home furniture business in Las Vegas is getting as crowded as the coffee counter at a truck stop diner.

Walker Furniture, a 45-year-old local establishment, is expanding with 175,000 square feet of warehouse space at Dermody Business Center to supply its store on Martin Luther King Boulevard.

Salt Lake City-based R.C. Willey Home Furnishings is moving dirt for 126,000 square feet of retail showroom and 60,000 square feet of warehouse and office space at Traverse Point, a 100-acre retail center being developed by The LandWell Co. at Stephanie Street and Interstate 215 in Henderson.

Ethan Allen Home Interiors owner Bob Fischer is looking for the right location in Henderson for a second store he hopes to open in 2001.

And a group of businessmen from Los Angeles led by Jack Kashani of International Furniture Mart LLC is working to buy 24 acres on the northwest corner of Martin Luther King and Alta Drive to build 600,000 to 1 million square feet of retail showrooms.

"I don't see how it's going to work," said David Estes, general manager of the 116,000-square-foot Levitz furniture store a couple of blocks north on Martin Luther King. "That's a lot of space to fill. I'm not sure if he can fill it."

Bob Riley, assistant manager for Krause's Custom Crafted Furniture in the Rainbow Design Center, questioned the relationship between the retail mall, Furniture Mart of America, and a proposed large-scale wholesale showroom to be developed by International Furniture Mart on 56 acres of Union Pacific Railroad land.

Kashani recently announced his letter of intent with Union Pacific to acquire the land, but is still trying to line up tenants, which is key to financing the project.

Fischer, whose family brought Ethan Allen to Flamingo Road and Eastern Avenue in 1975, moved the store to its current 21,000-square-foot showroom on Rainbow Boulevard's "furniture row" about eight years ago to serve the growing northwest Las Vegas Valley.

Now he's determined that Henderson and Green Valley are a separate market, and he wants a piece of it, too.

"Furniture retail in general has grown very nicely over the past five-plus years," Fischer said. "I happen to be a person who believes strongly in competition. Competition breeds excellence and keeps people on the up-and-up."

Las Vegas Valley, with its phenomenal growth spurt, is a place where retailers who aren't in the market yet wish they had been here yesterday.

"We're excited, but we're awfully anxious. It's going to be a while," said Bill Child, chief executive officer of R.C. Willey, which has nine stores in Utah and opened its 10th in Boise, Idaho, about a year ago. The company had annual revenue of more than $400 million last year.

"There's a lot of rooftops out there and we need to expand. We took a helicopter cruise over the city, and Henderson and Green Valley seemed to look the best. We always like to be near a freeway. We're quite content with where we're at."

"I feel a lot better about that," said Estes, who claims his Levitz store is No. 4 in sales among the Boca Raton, Fla.-based company's 64 stores in 13 states.

Larry Alterwitz, president and chief executive officer of Walker Furniture, said R.C. Willey's entry into the market did not factor into his decision to move into a larger warehouse.

Walker was doing $11 million in sales in 1991 when it built 45,000 square feet of warehouse adjacent to the existing store, figuring it could handle up to $24 million in sales.

Nine years later, sales have ballooned to $45 million.

"We don't want to let go of our market share," Alterwitz said. "Our goal is to be one-stop shopping. We want to make it easier for people from Green Valley and Summerlin to come to us."

Walker has dominated the mid-range furniture market in Las Vegas, but Alterwitz said the company is moving up a notch with an exclusive agreement to sell a Ralph Lauren line of furniture made by Henredon.

"We're going to make a big splash toward the higher-end buyer and keep our focus on the middle market," he said.

Two of the larger national furniture chains with a presence in Las Vegas -- Levitz and Heilig-Meyers -- are struggling to emerge from Chapter 11 bankruptcy protection.

In July, Levitz completed a sale of the bulk of its real estate holdings, reducing debt by $18.2 million. It also eliminated high-interest debt with a $58 million sale-leaseback transaction and closed stores in its lowest-performing markets to focus on stronger markets such as Las Vegas.

Burdened by sagging sales and debt, Richmond, Va.-based Heilig-Meyers Furniture Co., with four local stores, filed for Chapter 11 bankruptcy in August. The company announced plans to close 300 of its 870 stores in 29 states and lay off 25 percent of work force.

Keith Vier, division supervisor for Heilig-Meyers in Las Vegas, said stores were remodeled in March to keep up with consumer demand, opening up the showrooms and grouping furniture in sets. Heilig-Meyers also changed its credit program.

"It's kind of tough in Las Vegas because there are so many furniture stores," he said.

Whereas Alterwitz is quadrupling Walker's warehouse space to keep his best-selling items in stock, Vier relies on twice-weekly shipments from Heilig-Meyers' warehouse in Athens, Texas.

Alterwitz said he holds about $10 million to $12 million in inventory in his existing warehouse.

"We take a risk by ordering before it sells. Usually, if it's a trend we don't have to step on (buy) it right away, because most trends come and go, unless it's something you have to step on.

"The problem with the furniture industry ... it's a medium to small business. Most (manufacturers) were started 25 years ago in a garage and now they're in a factory. You may only recognize Broyhill and Ethan Allen, but there are thousands of them. It's not like a car company where there's four or five of them."

R.C. Willey, which employs about 160 people at a typical store, will serve the Henderson location from its 900,000-square-foot central distribution center in Salt Lake City, Child said.

The store will display a full line of home furnishings, a complete flooring center, appliances and computers, and fitness center equipment, he said.

"It's all in-house. We carry all of our own accounts," he added.

Largest furniture stores

in Las Vegas:

1. Walker 220,000 sq. ft.

2. R.C. Willey* 186,000

3. Levitz 116,000

4. La-Z-Boy 109,000

5. Heilig-Meyers 80,000

6. Terri's 65,000

* Projected to open in 2001

(total square feet)Xyxy xyxy xyxy xyxy xyxy Xyxy xyxy xyxy xyxy