Denver furniture stores succumb to the housing downturn

By Joyzelle Davis, Rocky Mountain News (Contact)

Tuesday, May 20, 2008

Ken Papaleo / The Rocky

A sign on the window of Bova Contemporary Furniture signals the end of the Scandinavian retailer's 27 years in Denver.

Ken Papaleo / The Rocky

Cathy McNamara, of Denver, spends her lunch break Monday looking at merchandise at Bova Contemporary Furniture. The Colorado Boulevard store will close at the end of June.

Bova Contemporary Furniture has been a Denver institution for 27 years, surviving oil busts and the dot-com implosion.

But the current housing slump did in the Scandinavian furniture retailer.

"When people don't buy houses, they don't buy furniture," said Merete Mogelmose, Bova's store manager. Bova is holding its final sale, preparing to close its Colorado Boulevard store at the end of next month. Bova joins a list of local furniture retailers that are either closing or are already shuttered, including Furniture Room, Foreign Accents and Dinettes Stools and More.

National furniture and home accessories chains are closing stores in Denver as well, including well-known brands like Bombay Co. and Linens 'N Things. Others are scrambling to remain in business.

"It used to be that you could provide really cool furniture at a great price and that did the trick," said Brian Frenkel, co-founder of the Furniture Room, which closed last week. But as consumer confidence has plummeted since late last year, he said, "it doesn't seem to matter what you do."

The furniture industry isn't the only sector of the retail economy struggling as consumers rein in spending. The International Council of Shopping Centers estimates that there will be 5,770 store closings in the U.S. this year, up 25 percent from 2007.

Adding to the squeeze for furniture retailers, the cost for furniture has spiked suddenly after years of steady declines. Part of that can be blamed on $129-a-barrel oil, which is integral to everything from the petroleum used to make fabrics and foam to the cost of shipping. And China, once a reliable source of low-cost production for furniture makers, is now in the midst of an inflationary uptick.

"You have to pass along what you can, because you can't keep eating those price increases and stay in business," said Jake Jabs, founder and CEO of American Furniture Warehouse. But at a time when consumers are leery of spending, he said, "it's not pleasant."

Furniture retailers catering to middle-income consumers are feeling it most. Bova's Mogelmose said the store's million-dollar-home clientele is still snapping up pricey sectional sofas, but the bottom fell out of the store's bread-and-butter mid-priced items. Denmark-based Bova operates stores in six other U.S. cities, and Denver is the only store to close, she said.

"It's just been consistently slow in Denver, for the past 10 months," she said.

Furniture Room, which for nine years has sold designer furniture at a discount, suffered the one-two punch of a forced relocation from its former Broadway home to make room for the Gates Rubber Co. redevelopment at the same time the housing market turned limp.

"We could've survived one, but not both at the same time," Frenkel said.

The outlook for furniture retailers isn't expected to improve anytime soon. U.S. consumer spending on furniture and bedding is expected to rise just 0.4 percent this year, to $87.2 billion, according to trade publication Furniture Today's annual forecast. If that projection holds true, that would be the worst year for the industry since 2001.

Even so, there are still optimists. Ohio-based Arhaus last week opened a store in Park Meadows' new outdoor plaza, the retailer's second in the Denver area. West Elm is slated to open its first Colorado store in Cherry Creek North later this month.

Boulder-based HW Home late last year opened a store in Greenwood Village, its fourth along the Front Range, and so far this year all the stores have posted sales increases, said Ron Werner, co-founder of the store.

"I tell our employees that customers are nervous today, so you can't stub your toe in front of them or they'll run away," he said. "You have to work that much harder to execute. We're going to come out of this stronger."

Jabs, who founded American Furniture Warehouse in 1975 and has endured several housing slumps, said his sales this month have finally ticked up after several months of declines.

"I think what's happening is people are buying some of those empty houses and renting them, and they need furniture," he said. "I'm knocking on wood right now and hoping it has turned around."

davisj@RockyMountainNews.com or 303-954-2514

Hanging up their dollies

* Furniture stores closing in Denver:

Bova Contemporary Furniture 2121 S. Colorado Blvd., closing at the end of June

Foreign Accents, 326 S. Broadway, closing Memorial Day

* Stores already closed in Denver:

Furniture Room, 1350 Rio Court

Dinettes Stools & More, 5603 N. Broadway

* National chains shutting down:

Linens 'N Things plans to close four stores in Colorado

Bombay Co. closed three Colorado stores in January.

Forecast

$87.2 billion will be spent on furniture and bedding in 2008, predictions say, with much of it coming in the year's second half. The figure marks a 0.4 percent increase.

5.9 percent is what the producer price index is expected to climb in 2008, compared with a 2.1 percent increase last year.

• May 21, 2008

  8:35 a.m.

  Suggest removal

  goodheart writes:

  The home furnishings stores that will survive this are those that prepared for it years ago. The stores that had good business practices and great reputations for quality products and customer service. The lack of all of that is what put the Furniture Room out of business Mr. Frenkel. Maybe a little less time at The Palm and a little more attention to what people were paying you for and you might still have a business?

  Survival of the fittest. Those that are no longer doing business were destined to fail.

• May 21, 2008

  9:06 a.m.

  Suggest removal

  PajamaPulitzer writes:

  Ms. Davis: Too bad you weren't around during the Carter Administration for you could have written about some real doom and gloom instead of writing this contrivance.

  I guess you weren't able to find a furniture store owner living under a bridge or we would have heard volumes about that.

• May 21, 2008

  9:08 a.m.

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  rg52 writes:

  Before much longer, more businesses and those who are self-employed at going to go out of business. Gas prices are really hurting everything and everyone. It is a domino effect. As a world, we need to come up with alternative travel and fuel. The price of houses went up and up for years, of course there was going to be a drastic downturn. That market could not sustain that kind of increase forever.
  President Bush will never acknowledge that we are in a remission, that would only be admitting to failure somehow on his part. Just like he never acknowledged any question put to him about lying about the was in Iraq. He will never admit to any kind of failure or mistake. The economic stimulus package is a joke.

• May 21, 2008

  9:35 a.m.

  Suggest removal

  FloydHill writes:

  Glad that the Furniture Room closed. They were the worst!

• May 21, 2008

  9:57 a.m.

  Suggest removal

  lappy writes:

  Unfortunately food, mortgage, gas, bills and neccessities come before replacing a 10 year old lounge suite, an uncomfortable bed or a broken kitchen chair...

• May 21, 2008

  10:40 a.m.

  Suggest removal

  FloydHill writes:

  I have ZERO sympathy for the Furniture Room. I doubt that I was the only customer who they treated with contempt and delivered poor service to.

  It was their hatred of the customer that did them in.

  How do I react to the news of their closure?

  YEEEEE HAAAAA!

• May 21, 2008

  11:59 a.m.

  Suggest removal

  reddog writes:

  ahhhhh too bad!

• May 21, 2008

  12:29 p.m.

  Suggest removal

  huffdiver writes:

  Time to check out Jake Jab's "starter furniture empire" for some good deals!

• May 21, 2008

  1:47 p.m.

  Suggest removal

  goodheart writes:

  Don't buy furniture at AFW unless you want it to disintegrate at 12 months. He only carries junk. Depending on your style, wait for a sale and go to Arhaus, Crate & Barrel or the new West Elm. They are national chains and stand behind what they sell. Actually with the down turn you can probably create a "sale" just by asking since everyone's business is down. It would be nice to support a good local comapny but the choices are Kacey (too tradional)or HW Home where the products are good,they just aren't as friendly.

• May 21, 2008

  3:46 p.m.

  Suggest removal

  huffdiver writes:

  Or, go to some true local boys from Longmont, Woodleys!

• May 21, 2008

  8:39 p.m.

  Suggest removal

  tulip552 writes:

  goodheart- I disagree. I've had good experiences with AFW- good quality and reasonable prices. The staff was nice as well and I'm happy with the dining set and living room furniture i bought from them. Crate & Barrel might actually be the worst alternative- their "furniture" is horrible quality, they have great marketing that tricks consumers in to thinking their furniture is actually worth something. I bought a buffet at C&B and it started falling apart about 6 months later- the veneers started lifting and one of the doors came loose.

• May 21, 2008

  9:44 p.m.

  Suggest removal

  jacka writes:

  We buy almost everything from AFW and Furn Row - all decent quality, fair price.

• May 21, 2008

  10:23 p.m.

  Suggest removal

  gkb2008 writes:

  It looks like local furniture buyers will largely be down to just three choices - Jabs' American; Woodley's; and Furniture Row. These three will have the bulk of the market even more so as the smaller competitors fail. American is really a behemoth as they expand into more communities regionally such as Cheyenne, Casper, Greeley, Grand Junction, and Durango. Furniture Row is not far behind in their growth. Hopefully this oligopoly of furniture retailers will keep their prices reasonable and fair in spite of their growing market share dominance.