Dallas-area competitors react to Nebraska Furniture Mart's billion-dollar boast
North Texas furniture stores are preparing for a championship-level competition when Nebraska Furniture Mart opens its 560,000-square-foot store in The Colony.
Dallas is the fourth-largest U.S. market and growing. Furniture and mattress sales in Dallas-Fort Worth totaled just over $2 billion last year, according to annual research published by Furniture Today.
The big game’s trash talk salvo came from the world’s third-richest man, no less.
“I believe the store will do over $1 billion,” Warren Buffett coyly said in a recent television interview. Nebraska Furniture Mart is owned by Buffett’s conglomerate Berkshire Hathaway, and store management didn’t want him to reveal that nugget, he said.
Nebraska Furniture also sells in categories other than furniture, such as appliances, electronics, flooring and fitness equipment, but Buffett’s annual sales forecast of $1 billion is huge, and everyone in the furniture business heard it.
“That $1 billion number has to come from somewhere,” said Brad Schweig, a manager of Sunnyland Patio Furniture. “It’s not going to be all new business.”
For shoppers, this may be the best year ever to find deals on furniture in North Texas as established furniture retailers put up a fight for their share.
The Schweig family has outfitted patios in North Texas for 45 years, and its Dallas store, which has 37,000 square feet, is the largest patio furniture store in the U.S. Sunnyland has shipped to commercial and residential customers throughout the U.S. and as far as Abu Dhabi.
Sunnyland just spent about $200,000 to enclose a 2,000-square-foot patio area for more climate-controlled display space.
“We’ve been to their [Nebraska Furniture Mart’s] Kansas City store. We’re in a niche business, and we do it well,” said David Schweig, Brad’s father. “But it was time to get a fresh look.”
Brad Schweig, who is also the founder of ShopLocalDFW.com, said stores that are already struggling here won’t make it.
“Others are going to take a dip and then recover,” he said.
It will be hard for Nebraska Furniture to match the experience of Sunnyland’s 25 employees, he said. Local established chains all mentioned their longtime employees as the secret sauce against the newcomer.
Nebraska Furniture says it’s still hiring the estimated 2,300 people it needs to run its store.
In the last two months, Farmers Branch-based Weir’s Furniture has added 6,000 square feet each to its Plano and Southlake stores and 16,000 square feet to its Farmers Branch outlet store.
“They [Nebraska Furniture Mart] are very good operators, and they will bring a lot of awareness to the market of all kinds of home needs,” said Weir’s CEO Jamie Hawley.
Hawley said he checked out the new competitor Friday. Nebraska Furniture has been opening for small groups to help train its staff.
Nebraska Furniture reportedly has a $100 million annual advertising budget, and Dallas’ share will likely be significant this year.
“That’s going to create a lot of excitement, and we think we’ll participate in the growth of some categories,” Hawley said.
Weir’s is filling some voids as it stocks its 30,000 square feet of additional space, he said, adding home office and reclining sectionals and chairs.
Grapevine-based Stacy Furniture is remodeling its Grapevine store. It remodeled its Allen store last year after a hailstorm destroyed the roof and everything in the store.
Stacy hasn’t lost any of its 180 employees to Nebraska Furniture, said Dorian Stacy Sims, president of the family-run company. Eighteen family members work in the chain of three stores and one outlet.
“We have a very strong custom-order business and have in-house designers. It’s a relationship business with repeat customers,” Sims said. When Gabbert’s closed in 2005 and Robb & Stucky left the market in 2011, Stacy hired their staff members and gained product lines.
Dallas was already a competitive market for furniture, Sims said.
Furniture Today retail editor Clint Engel confirms that assessment.
Less than three years after Nebraska Furniture Mart opened in Kansas City, that region’s largest furniture retailer went out of business. Benchmark Furniture had sales of $87 million in 2002, the year before Nebraska Furniture Mart opened there. The 40-year-old business called it quits in early 2006.
“I’m sure NFM’s entrance into Dallas will lead to shifts in the retail furniture landscape, just as it did in Kansas City, where the company knocked out then-largest player Benchmark,” Engel said.
But North Texas is a bigger market than Kansas City. And Dallas-Fort Worth has more national chains and locally owned furniture stores than Kansas City had, Engel said.
“It has many more strong competitors, including Rooms To Go, Havertys, Ikea, Ashley Furniture HomeStores, the Dump and strong home-market retailers such as Stacy, Freed’s and Weir’s,” he said.
“NFM will challenge them all, but it will also be challenged in a way it hasn’t experienced before,” he said.
Weir’s just had a record sales year, but everyone may take a little bit of a haircut, Hawley said. “$1 billion is a big number no matter what business it is.”
“We’re a 67-year-old company with a very strong brand, deep-seated relationship with our loyal customers and salespeople with 30 years of experience,” Hawley said.
The locals have some trash talk of their own.
“What I’ve been telling our people, we’re the Whole Foods and they’re the Wal-Mart,” Hawley said.
Stacy Furniture’s Sims also had a response to Buffett’s boast: “You can call Mr. Stacy if you need to. There’s no Mr. Nebraska.”
Follow Maria Halkias on Twitter at @MariaHalkias.