Soft sales plague furniture retailers

Back to TopCommentsE-mailPrintBookmark and Share

Marty McDermott has worked the floor of his south-side furniture store more than 40 years, usually seven days a week and 10 hours per day, and he’s never seen business this slow.

Plenty of customers still file through Martin Fine Furniture, but most say they won’t take the plunge on a new sectional or dinette set until the economy improves or they feel more secure in their job, McDermott said.

Furniture is one of the easiest big-ticket purchases for consumers to defer when money is tight. Couple that with a housing bust that left demand for new couches on the curb, and tight credit markets that continue to prevent retailers from financing customers without perfect credit, and you’ve got the worst market for furniture since the Great Depression.

“We’ve been hit with a triple whammy and we don’t have the government buying our clunkers,” said Jerry Epperson Jr., managing director of Mann Armistead and Epperson Ltd., a Richmond, Va.-based investment firm that specializes in home furnishings and has published a monthly newsletter on the topic for more than 35 years.

Furniture sales this year are down about 19 percent, or more than $2 billion, from a 2005 peak fueled by the housing boom. Many retailers have slimmed their inventories and begged banks for loans to help them survive. Some local stores including Gerdt and Kittle’s saw modest sales improvement in August, but not all will make it to 2010.

For McDermott, 77, the slow pace of sales means waking up a little earlier for his daily bowl of Wheaties and orange juice so he can have more time to turn shoppers into buyers.

He used to have five locations but closed the outposts about 10 years ago, tired of the hassle, and stuck with the main Martin Fine Furniture showroom at 5420 U.S. 31 South. The city’s oldest furniture store, it was founded by McDermott’s great-grandfather in 1854.

A shopper peruses the Kittle's Furniture showroom in Castleton. Local retailers report sales are beginning to stabilize after a nasty drop. (IBJ File Photo)

“If I’m overworked, I just fall asleep in a chair somewhere,” said McDermott, who gets a ride to work every day with one of his children. “If the place fills up with customers, they just shake me and I go.”

Stores shut down

Several furniture chains have shut down this year, including Columbus, Ohio-based Sofa Express, which in January closed its four central Indiana stores. The biggest locally based furniture retailer to fold was Indianapolis-based Today’s Bedroom One and Mattress Gallery chain. A Marion County judge in March ordered the 16-store chain liquidated after the owners missed multiple payments on a bank loan.

The closings don’t necessarily boost surviving retailers since new competitors always are eager to enter the market. Howell, Mich.-based Mattress World acquired seven former Mattress Gallery locations and reopened them as Mattress Worlds in June. And Lombard, Ill.-based The RoomPlace has opened stores this year in Avon, Castleton and Greenwood.


Epperson expects another wave of closures next year. The problem: Many retailers are surviving by selling off their inventory without restocking and are worried banks won’t lend them money they will need to profit from a recovery. Consumer expenditures on furniture dropped at least 10 percent per month through June, compared to the same month last year.

“I tell people to look at their own eight-month record and ask themselves if they would lend to themselves,” Epperson said.

The local chain Gerdt Furniture opened a 65,000-square-foot store along U.S. 36 in Avon in late 2006, but expenses quickly outpaced sales. Gerdt, with stores in Castleton and Southport, had to close the Avon store in August.

“When consumer confidence is in the toilet, our business is in the toilet,” said John Gerdt, 60, whose father, Edward, a police detective, saved for years so he could open the first Gerdt location, in Southport in 1959.

Customers lately seem less worried, so business is picking up, Gerdt said. He declined to provide numbers.

Poised for rebound?

Another well-known locally based chain, Kittle’s Furniture, also saw its sales jump in August. Across the chain’s 14 locations in Indiana and Ohio, sales rose about 10 percent.

For the chain’s flagship store in Castleton, it was the highest sales month in at least 30 years. But the commission check in that case goes to Mother Nature. After a storm flooded three-fourths of the 135,000-square-foot showroom, the company bought back its floor-sample inventory at salvage cost from its insurer, then began advertising the mother of all sales.

Customers waited outside the doors that first day and eventually more than 7,500 people filed through the store in search of deals, said Jim Kittle Jr., the company’s chairman.

The flood also gave the company a chance to completely redesign and restock its store—with an eye to the changing demands of furniture customers, Kittle said.

About 60 percent of the old store’s sofas were priced above $999. Now, more than 60 percent are under $999. The store now will feature six sofas at $499, while the old store had just one.

“Everyone has changed their spending habits,” Kittle said. “We still have everything we had before; we’ll just have a broader selection at the beginning through middle price point.”

A test of whether the market truly has turned comes during Labor Day weekend, traditionally one of the busiest times for furniture retailers, as people prepare to spend more time indoors during the winter months, said Mike Pierce, a spokesman for the National Home Furnishing Association, a High Point, N.C.-based trade group with more than 2,500 member retailers.

Individual stores or chains with clean balance sheets, good locations and demographics, in-store design assistance and a “flawless” back-end operation including delivery are most likely to survive, Pierce said. Another factor is the availability of credit: Even though lending markets have eased from a few months back, in some cases only about 25 percent of customers can get credit for new furniture.

“It’s just tough out there,” Pierce said.

McDermott isn’t fazed. At the end of each long day at his second home, selling sofas and love seats to customers who feel like family, he pours a scotch on the rocks with a splash of water and thinks about tomorrow.

He’s claimed for years he wants to retire. Don’t bet on it.•


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

  2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

  3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

  4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

  5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.