KANSAS CITY - Minnesota-based Slumberland Furniture is opening its first St. Louis-area flagship store. The company already has two traditional locations in the region and has 122 stores throughout the Midwest. Current CEO Kenny Larson's father Ken founded Slumberland in 1967.
KMOX's Michael Calhoun talked with Kenny Larson about expanding inside the St. Louis market, retail today, and the state of the American consumer.
First, let's start off with your big news.
We had the ribbon cutting for new Sunset Hills location. This is our third location in the market. New store design, certainly a bigger presence. And we're looking forward to having this be the first of a few more.
Why was this the right time to really move into the St. Louis market with a flagship store kind of investment?
There's a couple of reasons.
St. Louis is one of the markets that's similar to the Twin Cities in size and scope. I think there's a lot of similarities from a customer standpoint, too.
We had two stores there and it needed to be more. I shared with a couple of people at the ribbon cutting that we'd been working on this particular location at Sunset Hills for about 18 months. When both Bed Bath & Beyond and David's Bridal went out, we saw the opportunity. Now, with real estate, it takes some time to put it together, but we got it and couldn't be happier.
On our flagships, we've got a handful we've built and remodeled over the last couple of years. I'm sure you can appreciate, when you try something new, you don't get it perfect on the first one. We learned a lot with the last couple.
Can you talk a little bit more about that Midwestern similarity?
I think there is something about the... I'll just say the middle part of the country... that's different. It's where I grew up, went away for a little bit to school, and did some other things, too. I think part of it is a feeling of it. There's also the demographics around it. And I think there's just a lot of, you know, similar sensibilities.
We are fully committed to the 'middle part.' We're in 12 states now. I'll just say, never say never. But I really don't see us going out to, you know, the coasts or southwest or southeast for better weather, if you will.
So no national ambitions to become 'America's furniture store'?
At least not right now. We want to be plugged into communities and make sure that we're doing things really well. We're going to continue to grow, which we have been. But we like the pace that we're on right now.
In terms of St. Louis specifically, there have been some changes; local mainstays like Dau and Rothman are now out of business. How do you shape up the opportunity in St. Louis?
We've talked about this. There is a great opportunity in St. Louis for sure. I certainly wouldn't wish anybody to not make it or make the decision to close. When you have fewer people in the home furnishings category, it puts more of the responsibility on the ones remaining to be able to tell the story. To keep home furnishings on people's minds. So we've always been a big advertiser. We're in multimedia and we're going to tell the story the best that we can. But there is a benefit when you have lots of companies talking about the category; that's different than just one or two.
As someone who's marketing big ticket items, what kind of insight are you getting about the consumer today? How are sales? Are more people financing? What observations do you have?
Oh, Michael, this could be a long conversation! I would tell you, the home furnishings industry has had a tough couple last years after the pandemic. But the biggest impact that we see right now is the slowdown in housing.
One of the biggest determinants is when people are moving, for life events, could be new job, could be new family, could be change in family, all those things. And the housing industry is about 25% behind what normal levels are. That's not just new home starts; it's the selling of existing homes.
The other challenge is consumer confidence.
Between those two, I would tell you the industry has struggled some. But anytime that you have changes like that, it presents opportunities. Last year we had a solid year. We were ahead of our plan. We were ahead of what I think the industry was. We think this year is going to be the same.
I certainly wouldn't be honest if I didn't say I wouldn't like a little tailwind now and again from some of those macro issues. We do think there's an opportunity from a desire for each family to be able to make their home a great spot for them. That doesn't change. But some of the natural catalysts of making those changes like new spaces, new homes, has changed it.
We hear all about the 'trade wars.' I can remember when many of the big furniture lines were owned by St. Louis County-based Furniture Brands International and they did a decent amount of domestic manufacturing. But that company is long broken up. Is a lot of it still made in the United States? And how has it been for you trying to get your hands on sofas and tables?
It really depends on the category, Michael. There's no question that a lot of product moved overseas into other countries. Tariffs aren't necessarily a new thing. They've been in place with China for some period. But the volatility of it and the inability to put long-term plans in place, I would say, would be our biggest challenge.
We have continued just to keep running the business the best that we can until there's a little bit more certainty on it. But our product flow hasn't missed a beat, and we continue to get a fair amount of product domestically, too. But there's no question when you have big, bulky products, that it presents other challenges which some other retailers don't have.
You mentioned this was a former Bed Bath & Beyond space. All the changes in retail mean many more empty storefronts are available for lease. Is that an expansion opportunity for you?
Yes. Retail is going to continue to change. The impact of online certainly has been significant for every category. As every company tries to figure out how to navigate the challenges, some are going to have to make the decision they can't keep going, which will present more real estate opportunities.
When you take a look at Bed Bath & Beyond, for example, I always liked them as a retailer. I thought they did a great job. The size of their stores would be pretty similar to ours; they had some variation. But when we were able to combine the Bed Bath & Beyond and the David's Bridal spots together, it couldn't have worked out better for us. I know that that's always a little tricky to say when the impact of those companies closing was real and significant.
Many years ago, at the University of Missouri, I'd drive back home on I-70, see the Slumberland Furniture on the outer road and think, 'well, we don't have that in St. Louis.' So you've been in Missouri for a long time, just not the big cities.
We're also in Springfield. Columbia for sure. We've had some stores in St. Louis for, oh, it's probably nine years now. As we take a look at our growth and where we're located today, we're in 12 states, and we want to continue to grow contiguously.
I would tell you both Illinois and Missouri would be our two biggest states where we've got an eye for additional growth.
When you take a look at Minnesota, for example, we have essentially filled it up. There isn't any place else we can go. We're in large markets like Minneapolis-St. Paul, some of the smaller markets like Duluth, all the way down to pretty small markets. We have a store in International Falls, which is right on the border of Canada, about as small as you can get.
Any final thoughts on your new St. Louis flagship?
I would just say huge thanks to the community around Sunset Hills. We've been open not even a month yet and the amount of people coming in and the comments that we've received have been really encouraging and just makes us want to do more in St. Louis.
We've got a lot of really fun events planned throughout the grand opening between this past weekend all the way through into July. So it's going to be a fun couple months for sure.
Kenny Larson is the CEO of Slumberland Furniture. Michael Calhoun covers business and innovation and anchors the hourly news at KMOX.
This interview has been edited for length and clarity.