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FEATURE ARTICLE, NOVEMBER 2005
HOME SWEET HOME
Driven by the hot housing market, the retail sector is seeing upward momentum for home furnishing stores.
Chuck Lanyard
The post-9/11 world in which we live in is a much different place than in the past. Our psyche as a nation today is focused much more on living well and taking comfort in the home and in relationships with friends and family. For many, vacations spent in different countries and on tropical islands have turned into cross-country drives and day trips spent hiking or at the beach. The result is that consumers are investing more in their homes and family life. The impact of this phenomenon clearly has been felt in the retail sector, with consumer spending dramatically increasing for furniture, home entertainment and computers.
As America's spending habits turn towards the home, family life and home entertainment, the retail marketplace is experiencing a dramatic increase in the presence of furniture and electronics stores. Furniture and home furnishing retailers are rapidly expanding throughout the country, with new stores opening and many existing stores expanding.
Americans continue to focus on their homes as both a haven and an investment and they are expected to spend some $200 billion or more on remodeling and renovating this year, according to industry sources.
New Jersey is one state that is feeling the effects of this market trend dramatically. Over the past several years, The Goldstein Group has closed numerous lease transactions with big name furniture and home furnishing retailers, as well as those new to the marketplace. Some of the companies making a huge splash in the New Jersey marketplace include La-Z-Boy Furniture, Thomasville Furniture, HomeGoods, Pier 1 Imports, Storehouse Furniture, Raymour & Flanigan, Levitz, Norwalk Furniture, Best Buy, Circuit City, PC Richards and Electronics Expo, to name a few.
New furniture and home furnishing retailers are popping up all over New Jersey. Raymour & Flanigan, a 75-store chain, recently entered the Northern/Central New Jersey market by taking over a former Huffman Koos store on Route 1 in Woodbridge, New Jersey, and a former Futurama Furniture store on Route 46 in Fairfield, New Jersey. Storehouse Furniture, a 70-store chain, recently opened locations in Paramus, Shrewsbury and Wall, New Jersey. Another new player from Long Island, Bob's Furniture, took over a former Huffman Koos store on Route 46 in Totowa, New Jersey, and recently signed a deal for a location on Route 17 in Paramus, New Jersey. Homegoods, a division of Marmax Companies, has opened new stores in Secaucus, Woodbridge, Manalapan and Neptune, New Jersey.
Attractive financing advantages offered to consumers is fueling the growth of the furniture and home furnishings sector. Many stores are offering zero percent financing, and others have additional financing incentives available. Other retailers offer manufacturer rebates and store discounts to attract the consumer.
Another factor fueling this trend is the strength of the housing market. With home sales continuing at record numbers, more homebuyers are in a position to redecorate and remodel their homes; thus, furniture stores as well as accessory stores supplying items such as carpeting, lighting, tile and home accessories are reaping the rewards.
New Jersey is a great place to do business. The state was ranked number one for the highest median household income in 2004 at $61,859. According to the New Jersey census, housing prices continued to soar by 18 percent to a median $291,294 for owner-occupied homes, ranking the state fifth in the nation, a consistent showing behind perennial leaders California, Hawaii, Washington, D.C., and Massachusetts. The State has five counties — Somerset, Morris, Monmouth, Bergen and Middlesex — that are in the top 20 of United States' counties of 250,000 or more people with the highest median household income. Somerset County was number two at a figure of $84,892, while Morris County was number three at $83,583. Additionally, one in six New Jersey homeowners live in homes worth more than $500,000.
We can expect that this trend of furniture and home furnishing retailers' aggressive growth in the marketplace to continue for the foreseeable future. With more and more consumers investing in their homes and family life, and the national psyche still in a “nesting and shelter” mentality, the home furnishing industry is destined to benefit from these trends.
Chuck Lanyard is a director of brokerage services with The Goldstein Group, a full-service retail brokerage firm headquartered in Glen Rock, New Jersey.
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