New options for RTA buyers - ready-to-assemble, Bombay Co - HomeMarket Trends: Special Supplement - company profile

Discount Store News, March 4, 1991 by Mary Ellen Kelly

New Options For RTA Buyers

By Adding New Finishes and Home Office Pieces The Bombay Co. Hopes to Rebuild Sales Volume

Consumers will hopefully do a double-take at The Bombay Co.'s stores this month when, for the first time ever, the chain tests a new wood finish in its ready-to-assemble furniture and introduces RTA furniture catering to the home office shopper.

A second new finish will be tested later this spring.

Catching the consumer's eye--and hopefully pocketbook--with the development of new furniture finishes could be crucial for The Bombay Co., a chain that saw sales at stores over a year old plummet 15% this past January.

The Bombay Co. is best known for its commitment to mahogany-finished English reproductions from the 18th and 19th centuries. The development of four items in a Biedermeier finish (a lighter wood finish with black trim) could spark chain sales. The second new finish, to be debuted later this spring, is black with gold pinstriping.

Aagje Nourse, The Bombay Co. executive vice president, said the black and gold style will be joined by several additional sku's this summer, if the initial test--a wine table--proves successful. The initial Biedermeier pieces include a sideboard table, coffee table, end-table and mirror.

The first products The Bombay Co. is introducing specifically geared toward the home office include a credenza and filing cabinet. Nourse said several other new lines would be debuted later this year but provided no details about the type of furniture or furniture finishes it might include.

The new finishes will hopefully stimulate sales which have fallen off sharply in recent months. If the plummeting sales were due to a saturation of demand for mahogony-finished furniture and accessories, the new items could provide at least temporary relief.

Suffering along with retailing in general, comparable stores sales for the quarter ended Dec. 31, 1990, were down 3.1%; in the month of January 1991, sales for stores in existence more than one year decreased 15%. Net income for the quarter ended Dec. 31 was $5.7 million, down from $6.8 million for the period the previous year. Nourse stressed that disappointing sales in both the United States and Canada were a function of the recession, not the stores.

"Canadian people are also suffering from a poor economy. In fact, Canada is suffering perhaps more than in the United States, especially in Ontario. Western Canada is faring somewhat better," he said.

During the year ended June 30, 1990, comparable stores sales had been up 4.7%, and total sales were up 34.7% as the chain expanded its store base by 59 units to 272.

Furniture represents between 60% and 70% of total sales; an exact figure is difficult to pin down because many of the wood accessory items The Bombay Co. sells fall somewhere between being furniture and accent. Developing a winning furniture style is clearly key to a sales turnaround.

The Bombay Co. store is typically 1,800 square feet in total, roughly 1,500 square feet of which is selling space. Presently 304 stores are in operation in the United States and Canada. Thirteen store openings are slated for the first half of 1991, Nourse said; the store opening agenda for the second half of the year is somewhat in question due to the poor economic climate.

The company generally targets 40 to 50 new store openings per year. Most stores are in mall units but Nourse noted that the company is, "looking at street locations that are in an area with other fashion retailers."

While the company's roots were in the mail order business, direct mail fell to a very small percentage of its business as store count exploded. But the tide is again turning, according to Nourse, as consumers are again finding direct mail a convenient way to shop.

The Bombay Co. operates three distribution sites: one in Philadelphia; another in Fort Worth, Texas at headquarters; and one in Missassauga, Ontario. The majority of the products it sells are sourced in the Orient, but The Bombay Co. has signed on one U.S. maker to produce some of its goods.

PHOTO : Like much of the furniture industry, The Bombay Co. is plagued by declining sales.

PHOTO : The new Biedermeier pieces (a lighter wood finish trimmed in black) include a sideboard table, coffee table, end-table and mirror.