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Federated To Close Five Distribution Centers

By Home Furnishings Business in on January 2006 Federated Department stores will close five of its 31 distribution centers this year as part of its ongoing consolidation to realign its Macy's operating divisions.

The closings and consolidation will cost the company about $1 billion over the next three years. The company said it expects to realize about $175 million in cost synergies this year and $450 million in 2007 and beyond because of the May Co. merger.

Distribution center consolidations are consistent with Federated's previously announced estimates to realize approximately $175 million in cost synergies in 2006 and $450 million in annual cost synergies in 2007 and beyond as a result of the May Company merger.

The closings will impact 750 employees. The centers in Manchester, Conn., and Baltimore will close in June. Centers in Aurora, Colo., Portland, Ore., and Salt Lake City, will close in August.

"Advances in logistics and distribution center technology allow us to handle a larger volume of goods more effectively with fewer facilities that are more regional in nature," Tom Cole, Federated vice chairman, said in a release issued this week. "Streamlining our distribution center network to reduce redundancy and expense also is important to our ability to deliver value to our customers and shareholders."

The company will offer affected employees transfers to other Federated facilities, and severance packages will be provided to employees laid off as a result of the closings.

Expanded Outlet for Sleep Number Beds

By Home Furnishings Business in on January 2006 Specialty bedding manufacturer and retailer Select Comfort has expanded its partnership with two of the largest bedding retailers to market its Sleep Number beds in more stores.

Sleepy's and Mattress Firm announced this week a commit to boost the store counts that carry the Sleep Comfort Sleep Number line. The 123 additional stores are expected to have the product in stock by March.

According to a company statement issued Thursday, the additional store count expands the availability of the Sleep Number bed to 431 retail partner doors nationwide.

Minneapolis-based Select Comfort sells its product through about 400 Select Comfort stores, retail partnerships like the ones with Sleepy's and Mattress Firm, through direct marketing and via its Web site.

Sleepy's, based in Bethpage, N.Y., will now carry the Sleep Number bed in 138 stores throughout the Northeast. The retailer introduced the line at 45 of its Long Island stores in August. Sleepy's is Select Comfort's largest retail partner and operates about 400 stores.

Houston-based Mattress Firm, an affiliate of Sun Capital Partners, will add the product to 30 of its Florida stores, expanding its distribution to 75 locations in three states. The retailer also introduced the Sleep Number line to select stores in August.

"We are very excited about the expanded relationship with Select Comfort and believe it will help both companies increase volume and expand market share," said Mike Bookbinder, executive vice president of Sleepy's, in the release.

Mattress Firm, an affiliate of Sun Capital Partners, Inc., will add the Sleep Number bed to 30 of its Florida-based stores, expanding their distribution to 75 locations in three states. In August 2005, Mattress Firm introduced the Sleep Number bed at 45 of its stores located in Atlanta, San Antonio and Austin, Texas. The bedding retailer operates over 250 company-owned stores in 22 markets and supports an additional 50 franchisee locations in eight markets.

"Customer response has been extremely positive to the Sleep Number bed in the markets where we've introduced it, and we're excited to expand its availability within the Mattress Firm chain," said Steve Stagner, Mattress Firm's chief operating officer, in the release. "Our commitment is to offer the broadest selection and best customer experience in the industry, and the Sleep Number bed is an important addition to our mix."

Keith Spurgeon, Select Comfort senior vice president and general manager, said the initial phase of the relationship with Sleepy's and Mattress Firm was on track and the expansion of distribution was on target.

"By gradually increasing the availability of the Sleep Number bed at these retail locations, we are able to provide their sales professionals with the training necessary to support consumer interest in our products and help ensure our mutual success over the long-term," Spurgeon said in the release.

Lifestyle's Big Idea -- Minimarket A Hit

By Home Furnishings Business in on January 2006 By Powell Slaughter

Gary Woodhouse needs another furniture market like he needs "a hole in the head."

The general manager of North Carolina's Colfax Furniture stated his feelings with a smile, though, as he settled in at a table during a Lifestyle Enterprise-sponsored dinner for buyers at the minimarket in High Point this week.

"I have to give Lifestyle credit for getting this going," Woodhouse said. "They did it right. They had some good specials, and we made orders. They gave us a reason to be here, and once we were here, they gave us a reason to buy."

Colfax Furniture also visited about a half-dozen other showrooms, where the retailer also put in some orders.

While some dealers getting comped from Lifestyle for attending minimarket preferred to limit their shopping to their host's showroom, Lifestyle's encouragement of other exhibitors to blow the horn for minimarket had others -- and plenty of walk-in retailers who showed up -- ranging further afield in downtown High Point.

Martin Golaj, president of Avanti Furniture in Sterling Heights, Mich., said he'll definitely return if Lifestyle holds another dealer show. Until now, he'd been attending April's High Point market, and went to last summer's Las Vegas market.

"If Lifestyle does this again, I'll come here for a day or two more, because I hadn't realized there'd be so many other exhibitors," he said.

Golaj also plans to attend Las Vegas later this month.

Lifestyle used the minimarket as a springboard to make it a more important source for its dealer base. National Home Centers of Springdale, Ark. and Dania Furniture in Seattle are two retailers who said they'd probably up their business with Lifestyle as a result of this week's event.

National Home Centers, which operates 12 building materials and home improvement stores in Northwest Arkansas, got into furniture about three years ago, said Dwain A. Newman, CEO. The company currently carries furniture at five operations where square footage averages 70,000, and in those locations, NHC has between 25,000 and 28,000 square feet dedicated to furniture.

"I think we'll probably buy 20 to 25 containers from Lifestyle coming out of this week. This event was just right for us because we'd been thinking about increasing our business with Lifestyle," Newman said. "We have a large distribution center so we can order and store a lot of containers. The timing was right. We've been working to refine our furniture lines and lower our number of SKUs, and some of Lifestyle's collections better fit our long-term plans."

Roy Swedstedt, a general manager with Dania Furniture, said minimarket could build Lifestyle's presence on its floors.

"We had only done a couple of containers with Lifestyle so far, but we found a number of items that will work for us," he said.

The original retailer comp list for minimarket was something more than 300, but other retailers decided to come on their own. Through Monday and Tuesday, Noe estimates Lifestyle had 450 buyers through the showroom, and planned on working a full day Wednesday, though Noe said traffic would be slower the last day, according to buyer travel plans he'd seen.

"We usually have 700 people during an entire High Point market, so we feel pretty good about what we've done in a couple of days," he said.

Lifestyle came loaded for bear in terms of new goods. There were seven new adult and seven youth groups ranging to $1,299 for five pieces, as well as 10 dining rooms in the starting price Lifestyle division. It also had a couple of full collections for the step-up Forbidden City case goods line retailing up to $2,999 for full suites; as well as new casual dining and leather.

"We started working on this event the day market stopped in October, and we didn't get going on product till mid-November," Noe said. "We were essentially three weeks in product development on everything we introduced this week."

There was a surprising amount of new product in other showrooms as well. Hooker, for example, took advantage of moving up its product-development cycle for spring introductions to give dealers this week a firm idea of where the company is going.

Hooker had traditionally held product development meetings for April introductions, which included consumers as well as retail customers, in late January to gather feedback on proposed introductions.

"This time we did it in early December," said Kim Shaver, vice president of marketing communications. "We're truly positioning this week as an April product preview since we'd already decided what we'd come forward with at market. We still need to round out some pieces, but we're 90 percent ready for April in terms of direction, as well as offering a look at actual pieces from the groups we'll bring."

Vaughan Furniture had three new bedrooms -- two domestic and one import.

"Our plans were to photograph them and bring them out in January, but we went ahead and showed the actual goods here," said CEO Bill Vaughan. "We'll bring out three more in mid-February. Our hope is to have all these bedrooms off the ground in time for April market so we can concentrate on dining."

The reaction of Vaughan, which had more than 10 customers through the showroom on Monday alone, to minimarket was typical of exhibitors who bought into Lifestyle's idea for a January showing.

"I think what (Lifestyle) did is phenomenal," Vaughan said. "I know it got retailers excited, and I know we are, too."

Lifestyle was happy to have other suppliers open their showrooms in conjunction with Lifestyle's invitation-only event, but Noe had particular praise for Tom Mitchell, senior vice president and general manager of Merchandise Mart properties, whom he credited for organizing transportation services and gift bags that included a portable DVD player.

"He's really been a huge help," Noe said, adding that reaction from other exhibitors has been very favorable. "Competitors have been calling me and asking to contribute money to what we did"

While minimarket cost Lifestyle more or less the same as it's participation in last summer's Las Vegas Furniture Show -- around $600,000 -- the company anticipates a much greater payoff from this week's event.

"We generated around $1 million in business from Las Vegas, but we believe this week could essentially double our business this year," Noe said. "We shipped around $300 million FOB last year, and after this week we believe we'll easily hit $500 million this year."

Noe went on record last week that he wants to keep High Point as the furniture industry's major marketing center, and is confident that Lifestyle's gambit soaked up a considerable amount of 2006's early open-to-buy capacity at retail.

To grab that business, Lifestyle put together an ambitious package of incentives. Those included floor sample discounts and volume rebates -- plus a price guarantee.

"We're locking prices for a year if a dealer orders by January 27," Noe said.

For those who are watching dates, that's the week before Las Vegas market.

"There are several retailers we saw who said they'd planned to go to Vegas, even made their bookings, but have decided they don't need to," he said.

Will Lifestyle put together another minimarket? Probably not this year, Noe said.

"I'd love to do an event like this all the time, but there are already too many markets," he said. "As far as next year, we'll look at it and see how successful this week ended up being after all's said and done. In this industry, everyone seems to wait for something to happen. In a $70 billion industry, we really aren't that large, and you have to wonder how we could influence 60 other people to show this week. It just shows that the industry is begging for leadership."

Lexington Plans Private Show in Vegas

By Home Furnishings Business in on January 2006 Lexington Home Brands will capitalize on a critical mass of retailers already making plans to attend the Las Vegas market later this month with an invitation-only introduction of Jimbaran Bay, a new phase of its Tommy Bahama brand.

LHB will invite around 200 retailers to the Desert Pine Golf Club in Las Vegas for a preview of the new Tommy Bahama line, which is set for general introduction at April's market in High Point.

"Retailers purchasing the new collection at the private showing will have delivery on the goods by mid-year," said Lexington Home Brands CEO Bob Stec. "People who order it in April will receive it early in the fourth quarter."

Lexington will host dealers to examine Jimbaran Bay on Sunday and Monday, Jan. 29-30, and follow that up with a golf tournament on Tuesday, Jan. 31.

Retailers Gain Seats On Market Authority Board

By Home Furnishings Business in on January 2006 The High Point International Home Furnishings Market Authority is expanding its membership in the hopes of gaining greater input from retailers.

The group -- a non-profit organization created five years ago to oversee ancillary support for the biannual markets held in High Point, N.C. -- voted Wednesday to add new seats to their board of directors.

According to Thursday's edition of Greensboro, N.C.'s News & Record, the by-laws of the organization were changed to include two seats that will be filled by retailers and additional seats for an another independent showroom operator and officials with the High Point Chamber of Commerce and the High Point Convention & Visitor's Bureau. Those future board members have yet to named,

Since its inception, individual retailers were not included on the board, rather their concerns were represented by the National Home Furnishings Association, a trade organization devoted to the needs of retailers.
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