Wal-Mart tests furniture store; Bud's Warehouse spins off a specialty concept

Discount Store News, June 6, 1994 by Richard Halverson

FARRAGUT, TENN. - Wal-Mart is moving into furniture in a big way. The world's largest retailer opened the first test unit of a furniture specialty store named Bud's Furniture & Appliances Center here May 5 and has vastly increased the furniture and appliance offering at its 83 Bud's Warehouse Outlet stores across the Sunbelt.

To supply the Bud Warehouse Outlets as well as the new furniture test stores, Bud's has developed its own furniture and appliances buying staff.

The Bud Furniture & Appliances center is the latest test of ways in which the retailer can recycle small, old Wal-Mart stores that have been replaced by larger discount store or supercenters. It is a way to gain some return from unsaleable lease of stores that measure 40,000 sq. ft. to 65,000 sq. ft, such as its 65,000-sq.-ft. Farragut unit.

Last year, Wal-Mart opened a County Farms farm store in a former discount in Kirksville, Mo.. But that test remains at one store.

In contrast, Wal-Mart appears poised to moved rapidly with the furniture specialty concept, because it has, in effect, been testing furniture and appliances for the past year at its Bud's Warehouse Outlets.

Bud's is prepared to open 15 more furniture units over the next 12 to 18 months if the results of the first 60 days from Farragut meet expectations, said a Wal-Mart source.

Wal-Mart right now has 85 vacant stores that could be put to use, and more will fall vacant this year as Wal-Mart relocates units.

The Farragut store carries a full line of appliances from Westinghouse, including washers. dryers, refrigerators and diswashers.

In consumer electronics, all of its stock consists of refurbished equipment that manufacturers have taken back for warranty defects, repaired and reboxed. In VCRs and TVs, the brands are Sanyo, Emerson, Daewoo, and Hitachi. Its microwave brand is Magic Chef.

All refurbished CE equipment comes with a one-year warranty.

Bud's furniture also has open-stock lines of living room, dining room and bedroom suites, as well as patio furniture grills and decorative items such as lamps, silk flower and plants. It also stock unfinished furniture.

Price points for upholstered sofas range from $299 to $599. Bud's carries a line of Dixieland leather sofas at $499 and $599. A dining room set of a table and four chairs ranges from a promotional price point of $199 to $799.

Other suppliers include Southwest, Imperial, El Rancho and Dan River. In RTA, the major suppliers are Sauder and Ameriwood.

In its marketing, Bud's specialized in furniture groups, such as an upholstered chair, sofa and love seat from vendors that include Stanton, Barkel, Summitt, and Astro-Lounger. Opening price points start at $499 for a group and range to $1,900.

In recliners, Bud's suppliers include Superior Chair, Best Chair and Pullman. Case goods vendors include Orleans, Ashley and William A. Baskel.

In bedding, Bud's carries two lines of private label Bud's mattresses and box springs made by Universal as well as the Bassett and Spring Air national Brands. Bedding is the only private label product

Most of the rest furniture mirrors the selection found at other furniture stores, except that discounted prices range from 15% to 50% less. None of the product are made specially for Bud's.

Bud's Furniture is applying the Wal-mart idea of quality merchandise at low everyday prices to the furniture industry. In its merchandising, Bud's appears to be targeting middle American consumers.

The new furniture & appliances store test will be under the supervision of Bob Hart, Wal-Mart vice president and director of the Bud's division.

Bud's Warehouse has hired it s own furniture and appliance buyers under Rick McClintock. The furniture test store will use the Services of its existing buying staff.

Illustrating the new emphasis on furniture in Bud's Warehouse Outlets, the Greenville, Tenn., store devotes about 10% of its 50,000-sq,-ft. of selling space to furniture and appliances.

Three-piece groups of Astro-Lounger upholstered furniture range from $599 to $799 while Helig-Meyers furniture store across the street carries an identical three-piece group for $300 more than the Bud's price of $779.

Despite the outlet name, about 80% of the merchandise in Bud's is fresh goods bought expressly for the chain. Only 20% of its offerings are surplus Wal-Mart merchandise.

The Greenville Bud's stock lines of Tappan and Kelvinator appliances.

As an example of refurbished CE equipment. Bud's carries a 25-inch Sanyo color TV for $129, compared to a price of $189 for a new Sanyo at Wal-Mart.