House2Home opens 17 stores in L.A. market - Brief Article

Home Channel News, May 21, 2001 by Brae Canlen

Completely remodeled former HomeBase stores include subtle changes from prototype

HOLLYWOOD, CALIF. -- Home-Base began its rollout of House2Home this month with 17 Los Angeles-area openings on May 26. The former HomeBase stores, which have been completely remodeled, follow the same design and merchandising concepts as House2Home's initial test stores. But a tour of the North Hollywood location by an NHCN reporter showed some refinements gleaned from eight months of selling home furnishings and decor to selected markets in California and Nevada.

Outdoor Living is still the signature department at House2Home which has expanded its patio furniture selection to 50 different sets, most of which are on display. "No other chain in the West has this many," said Scott Richards, executive vp-merchandising, marketing and distribution. During the holiday season, patio sets and entertainment islands will give way to an extensive array of trim-a-tree merchandise, Richards said. But the 11 working fireplaces -- House2Home dubs it "The Wall of Fire" -- will become a permanent fixture.

A new juvenile section called "Room2Grow" features kids' furniture storage accessories and bedding. This department has proven especially popular with Hispanic shoppers, who make up 25 percent of the population in the majority of House2Home's Los Angeles locations, according to vp-marketing and advertising Ginger Silverman. Personal care products -- such as lotions and bath oils -- have also been added. "You won't find those in many of the vertical channel retailers we compete against," Silverman noted.

The lighting department has been reset with lower gondolas in the newer stores, a change that creates better sight lines and allows for more vignette displays. Lamps are grouped on long wood "sofa" tables that can also be purchased by consumers. Other furniture includes home office, which has its own department; sets for living rooms, dining rooms and bedrooms, and mattresses and entertainment centers. Warehouse space left over from its former incarnation as HomeBase will enable House2Home stores to offer a quick, three-day to five-day turnaround for special-order upholstered furniture, something few retailers can match.

The furniture section has a small selection of Oxo-brand band tools and a key-cutting service. These are House2-Home's only nod to hardware, a category the company would like to soon forget.

After struggling for years against Home Depot, Lowe's and other DIY chains, HomeBase reinvented itself last year as a home-furnishings retailer. The Irvine, Calif.-based chain has since closed 47 warehouse stores in Washington, Oregon, Idaho, Utah, California, Colorado and Texas. The remaining 42 outlets, which average 100,000 square feet, will introduce home decor shoppers to a bigger-is-better format that can support 5,000 square feet of silk flowers and 17,000 square feet of candles.

"Big boxes have not really penetrated the home-furnishings market," Richards observed. One of House2Home's closest competitors, Bed, Bath & Beyond, peaks at around 40,000 square feet. Although House2Home is frequently compared to The Great Indoors and Expo Design Centers, these two specialty chains -- owned by Sears and Home Depot, respectively -- carry merchandise With higher price points and aim at the remodeling market, according to Richards. House2Home's target customer, women between the ages of 35 and 54, is seeking a way to instantly change her home decor -- which partly explains why paint, wallpaper, faucets, locksets and electrical parts will no longer be sold in House2Home. "Anything that smacked of home improvement did not do well in our test stores," Richards stated.

Home centers will still have to compete with House2Home in several categories, however. The flooring department -- though limited in selection --carries ceramic tile, hardwood, laminates and carpeting. Many of major window treatment brands arc offered, and outdoor nurseries will range in size from 13,000 square feet to 25,000 square feet. House2Home's large assortment of towels and bedding won't worry hardware dealers, but its storage, cleaning and pool supplies cross both retail channels.

HomeBase cut back its original makeover plans to 42 stores from 67, most of them concentrated in California. (The Phoenix market will get five units, and Las Vegas has two of the test stores.) New locations will be reopened in phases over the next few months, with all stores operating by this July.

The conversion plan has left HomeBase with some real estate on its hands. Of the 47 HomeBase locations not slated for reformatting, 14 are owned by the company and 33 are leased. Although Richards would not comment on current negotiations, he told NHCN that several retailers -- among them Home Depot, Lowe's and Best Buy -- have expressed interest in purchasing vacant HomeBase stores.