American Furniture Warehouse to expand to 3 Houston suburbs 300,000-square-foot store and warehouse complexes in the works. Originally published in Furniture Today March 13th 2018
The American Furniture Warehouse store in Glendale, Ariz., that the new Houston-area stores will be modeled after.
ENGLEWOOD, Colo. — American Furniture Warehouse is planning three large warehouse showroom stores in fast-growing Houston suburbs to the north, south and west, President and CEO Jake Jabs confirmed this week.
While the land deals have yet to be finalized, AFW expects to open 300,000-square-foot buildings in Webster, Texas, to the south; Conroe, Texas, to the north; and Katy, Texas, west of Houston. Each will feature 100,000-square-foot showrooms with attached 200,000-square-foot warehouses.
None of the land deals are finalized, and Jabs said the Katy piece is particularly complicated, but he hopes to have a Webster store up and running by this time next year. The others would follow as soon as possible.
“We’ve got the money. It’s just a matter of getting approvals,” Jabs said. He didn’t want to disclose projected sales for the market, but said annual sales between $75 million to $100 million per store would be a fair ballpark estimate.
AFW previously confirmed its interest in the market but has been reluctant to elaborate on the details as none of the projects have been finalized. However, bits and pieces of the plan have surfaced this year, leading Jabs first to confirm he was negotiating for land in Webster.
This past week, Conroe City Council approved an incentives package for a future AFW store in that market, and the mayor officially welcomed the retailer to the community. But even there, Jabs said the deal is not done and that the retailer awaits approval from the U.S. Army Corps of Engineers, which owns the land. That could take months or years, he said.
While AFW has opened satellite stores in Colorado — the result of acquiring other retailers — the Houston locations will be built from the ground up and modeled after the large warehouse showrooms it operates in greater Phoenix, Ariz.
“The reason we’re so successful in Arizona is because we’re like the (brick-and-mortar) Amazon, offering immediate fulfilment,” he said. “You come in and buy it. You can take with it with your or have it delivered in a day or two. That’s today’s customer.”
Houston is an appealing new market for the retailer partly because AFW works best in big-city markets. “We’ve had stores in Montana and Wyoming, but I’ve learned we’re geared for big populations,” he said. “To make our thing work, we’ve got to do a lot of volume.”
As it has before previous expansions, Jabs said AFW rented a helicopter to get a better view of housing developments and where the city’s population was heading. All three suburbs fit the bill for fast growth, including Conroe, which posted the fastest growth of any large city (population of 50,000 or more) in the nation in 2016, according to PBM Strategic Insights. Conroe’s population grew 7.8% over 2015 to more than 82,000 people — 11 times the national population growth rate.
Jabs called Houston a “good city with a lot going on.”
“The economy is strong and growing, and there are a lot of roof tops,” he said. “That’s what we need — rooftops.”
AFW is No. 19 on Furniture Today’s most recent Top 100 with estimated furniture, bedding and accessory sales of $640 million at 14 Colorado and Arizona stores. Total sales reached $668.6 million in 2017.