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Biggest in the biz, with room to grow

The furniture giant has entered the celebrity brand game with Cindy Crawford and Disney lines, but rivals are in pursuit.

By MARK ALBRIGHT
Published March 19, 2006

	"I like nice things, but practicality is a big issue to me. Growing up in a small town in Illinois, I know the value of a dollar," Celebrity designer Cindy Crawford.
	Rooms to Go
	Rooms to Go's new line includes a fantasy princess room. Coming next: kids' bedroom sets themed for the movies Cars and the sequel to Pirates of the Caribbean.

Martha Stewart kicked things off at Kmart. Then Target used designer Michael Graves to give its no-name imported home goods some class. JCPenney splashed cable TV decorator Chris Madden's name all over its home furnishing department.

Now Rooms To Go has gone Hollywood in the celebrity brand game, launching a Cindy Crawford furniture line that's halfway to $100-million in sales its inaugural year. The retailer also landed Walt Disney's Co. first license to produce kids bedroom suites with Disney characters.

"So far it's been a great adventure," said Jeff Seaman, chief executive officer of the 15-year-old Seffner and Atlanta-based company that mushroomed into the nation's largest furniture chain.

Seaman, 45, who pioneered selling furniture by the room packaged at a deep discount with matching lamps, rugs and framed art, knew he couldn't rest on his company's laurels.

His success sourcing fashionable, affordable furniture from the Far East was quickly copied by most domestic furniture manufacturers. Rooms To Go's once revolutionary delivery-within-a-week promise was aced out by rivals such as City Furniture's next-day promise in South Florida. Meanwhile, Ashley Furniture and American Signature are elbowing their way into the Tampa Bay market where Rooms To Go battles long-entrenched Kane's. If that's not a crowd, Bartow-based Badcock and More is trying to trade up to the moderate price level.

"In this business you're constantly changing or you fall backward," Seaman said. "We needed a collection with a little more fashion that offered choices of better fabric, leather and finishes to differentiate us and get our pricing options up to the upper end of moderate."

There are only a couple of well-known national furniture brands. So manufacturers are flocking to Americans' obsession with designer and celebrity names for licensed collections.

"It's become a major trend because renting somebody's else's brand name is a lot cheaper than building your own brand," said Al Wight, an industry consultant in Thomasville, Ga. "Rooms To Go is as good at their niche as you're going to get. But all this new competition will make it tougher to grow as quickly in Florida as they had been."

Seaman planned to go with a well-known apparel designer for his company's first venture developing licensed products. But then he spotted Crawford in an Omega watch ad.

"She looked elegant," he said. "Yet she has this All-American, down-to-earth image as a mother of two who's very much identified with fashion, good taste and practicality."

She's also 40. That's about the same age as a generation of women just entering the stage of life when they spend big on furniture. They have watched Crawford's Cinderella-like career as one of the first four supermodels extend into its 21st year.

"She's seen as a real person," said Ken Banks, a Seminole retailing consultant hired two weeks ago as marketing vice president at Levitz Furnishings. "And she is instantly recognizable."

Crawford appeared on 600 magazine covers and sold 2-million exercise videos. For years she was spokeswoman for Pepsi, Revlon and Kay Jewelers. She survived a modeling career no-no by posing topless for Playboy, a move that added young men to her following. More importantly, that helped her land a seven-year gig as host of MTV's House of Style followed by a few forgettable movies and TV shows.

She settled down after her much followed divorce from Richard Gere (including tabloid gossip that both were gay after she posed with k.d lang in Vanity Fair). The bad ink faded once she had two children with second husband Rande Gerber, the creator of the Whiskey Bar, the chic hipster hangouts at Ian Schrager's boutique hotels and Starwood's W Hotels. He's developing a Las Vegas casino with George Clooney.

Age stalled but did not end Crawford's career. She's plugged Kellogg's Special K, Ellen Tracy apparel and her Meaningful Beauty skin care line that's owned by infomercial giant Guthy-Renker.

The rule is celebrities must add something to a product, so Seaman ordered surveys of how 750 women rated Crawford's fashion and decor savvy.

"She was off the charts," said Britt Beemer, president of America's Research Group. "Right up there with Martha Stewart."

Crawford had never seen a Rooms To Go until she met the mild-mannered Seaman for the first time in a Grapevine, Texas, store in 2004. She peppered him for two hours with questions about how the furniture was made so well at moderate price. They shifted to a nearby Chili's chatting about furniture over a shared plate of fajitas for a 90-minute lunch.

"It was clear by then we were going to have a deal," Seaman said. "To be candid, however, she has been much more involved in the design process than I ever expected. She's sending ideas all the time."

Rooms To Go dispatched designers to her Malibu mansion with cameras and sketch pads to learn her tastes. They exchanged hundreds of ideas.

"I like nice things, but affordability and practicality are big issues to me," she said. "Growing up in a small town in Illinois, I know the value of a dollar. I have kids, so I always ask, "can my kids throw up on this fabric'?"

She insisted over Seaman's objections on a denim sofa. It took five tries to find a fabric that could be acid-washed to the softness of broken-in jeans. Seaman prevailed in making the denim a removable slip cover.

Some of the pieces were lifted right out of Crawford's house, a oceanfront-front Malibu manse that resembles a Jamaican sugar plantation. Her furnishings are all custom-made or 19th century antiques. The best seller at Rooms to Go is a scaled-down copy of her West Indies bedroom set.

"But I'm switching to the Presley Bed we developed for Rooms To Go as soon as it comes out," she said. "I love it."

Of the dozen rooms to hit the sales floor, only one contemporary living room was a dud.

The Disney line helped Seaman broaden the reach of the Rooms to Go Kids offering to teens, thanks to Lizzie McGuire bedroom sets that are aimed at 10- to 13-year-olds. The chain's 18 kid furniture stores were renamed Rooms to Go Kids and Teens because the children of baby boomers are growing up. Seaman's designers added versatility to the novel cartoon-theme bedroom suites by using hand-painted panels of Disney images that can be reversed to a plain surface. That way kids are not embarrassed by the images of Mickey Mouse or Winnie the Pooh as they mature. Coming next: kids' bedroom sets themed for the movies Cars and the sequel to Pirates of the Caribbean.

While Cindy Crawford is an e-mail away from a decision, Disney, which rigidly controls how its characters are portrayed, is far more bureaucratic. Decisions are chewed over by committees for weeks. Nonetheless, Rooms To Go's Cinderella, Winnie the Pooh and Pumpkin Carriage bedrooms were nominated as the most innovative new products launched under the Walt Disney Co. label in 2005.

Rooms To Go overcame Disney doubts that the company was too small to handle the job.

"We have a winner here that exceeded all our expectations," said Stephen Teglas, Disney vice president of product development home and infants.

Seaman says his company's first two bold steps in licensed brands are just the start. The Cindy Crawford and Disney lines are being offered wholesale to noncompeting retailers.

Seaman slowed the company's rampant growth in 2003 to retool before trying to take Rooms To Go to the next level. He pulled out of a $350-million acquisition of struggling Wickes Furniture with Sun Capital Partners that would have put Rooms To Go in big Midwest and Pacific Coast markets. After rivals set a new industry standard of next-day delivery, Seaman followed by improving distribution and beefing up the night shift. Now next-day delivery at no added charge is available from most stores and over the Internet, which is 3 percent of Rooms To Go's business.

The aftermath of Hurricane Andrew in 1992, which wiped out his first store in Miami, taught Seaman that disasters create repopulation shifts that linger for years as the displaced rebuild.

"Furniture follows housing and the last few years have been very good to us," he said. "I thought we were going to be in deep doo-doo after Hurricane Katrina, but I've changed my mind."

He won a bidding war for Rhodes Furniture, a Georgia chain he bought out of bankruptcy for $45-million. Once the dust settled, Rooms To Go emerged with 11 stores in the Florida Panhandle and a distribution center strategically located to support stores for the rebuilding of New Orleans and the Gulf Coast.

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

WHAT IS IT: The nation's largest furniture retailing chain.

WHERE IS IT: Based in Seffner and Atlanta.

HOW BIG: 110 stores and revenues of $1.6-billion in 2005. Stores are in eight states, but thanks to an online presence, it delivers 4,000 rooms of furniture a day to 32 states.

ORIGIN: Creation of the second generation of a long-time furniture retailing industry family.

INNOVATIONS: First furniture retailer to stick with top-tier real estate for stores. Leaped to Far East factories for wood products long before other American furniture makers did. Pioneered packaging fully accessorized furniture by the room at a discount price. Delivered in a week while competitors delivered within weeks. Shed the cheap suit look by dressing the sales force in casual polo shirts and khaki. Used stand-out primary colors in marketing and logos while rivals stuck with drab greens and browns.

NEW TACTICS: First furniture retail chain to develop its own celebrity brands with Cindy Crawford and themed Walt Disney characters for its kids furniture. Experimenting with next-day delivery.

QUOTE: "The Rooms to Go concept was to simplify decision-making to "I want that room,' " says Jeff Seaman, chief executive officer. "We're trying next-day delivery so we can say "You want it. We've got it.' "

[Last modified March 19, 2006, 01:34:47]