Canada could soon see substantially more Ashley Furniture HomeStores. Winnipeg-based Dufresne Group plans to open as many as 16 Ashley locations in Ontario and Alberta over the next few years. We spoke with its Canadian broker to learn more about Ashley's real estate requirements.
Founded in 1945 and headquartered in Wisconsin, Ashley Furniture HomeStore has 551 U.S. locations and retails lines including bedroom, dining room, casual dining, upholstery, motion upholstery, leather, leather match, occasional tables, entertainment centres, home office, youth bedroom, recliners, curios, mattresses and accessories. Remarkably, Furniture Today named Ashley Furniture HomeStore as the number one conventional furniture store in 2015 in the United States, with sales in excess of $3.27 billion. Sales increased 5.1% between 2013 and 2014. Ashley's Canadian stores are located in the provinces of Manitoba, Saskatchewan, Quebec, New Brunswick, Nova Scotia, Alberta and Ontario, as well as in the Yukon.
The Dufresne Group is North America's largest operator of Ashley Furniture HomeStores, with 17 Canadian locations as well as 33 in the United States. Dufresne is a private company with over 1,100 employees in Canada and over 1,400 in the United States. In Canada, Dufresne also operates 11 Dufresne Furniture & Appliance stores in Manitoba and Ontario. The company manages a buying group for over 110 independent retailers across Canada, called Dufresne Retail Solutions Group. Dufresne is one of the largest Canadian-based furniture retailers, and the 34th largest furniture retailer in the United States.
We spoke with Winnipeg-based IC&I Properties/Shindico Realty's John Pearson, who is representing Dufresne in its search for Canadian Ashley store real estate. Mr. Pearson explained that he's looking for retail space in the 25,000 square foot to 28,000 square foot range, ideally in retail power centres with a home improvement and/or fashion co-tenancy. Although his focus is primarily in Southwestern Ontario, Mr. Pearson said that he's also looking for retail space in Edmonton's northeast, as well as in the southwest part of Calgary. Interested parties can email Mr. Pearson or call: (204)928-8229.
Antony Karabus, CEO of leading retail consultancy HRC Advisory, said: "Ashley Furniture is anticipated to be pursuing an ambitious expansion in Canada, which could see the retailer take advantage of the increased availability of retail real estate created by the closures of Target and Future Shop, among others”. Mr. Karabus noted that retail expansion shouldn't be based on available real estate and lower occupancy costs, alone. "Given the significant market share enjoyed by large incumbents such as The Brick, Leon's and Sears, it would seem that Ashley Furniture’s expansion would be predicated more on winning market share from the strong incumbents, with a secondary focus on meaningfully increasing the size of the market", he said. Mr. Karabus noted the opportunity to open urban locations to address the 'micro-sized' condominium trend in growing areas such as Liberty Village and Concord CityPlace in downtown Toronto, as well as mid-to-higher priced condominiums in increasingly-densely populated areas such as downtown Toronto and Yorkville, as well as downtown Vancouver.
Mr. Karabus also noted that “the growth of the furniture and appliances market is typically correlated to new home starts and renovations, so the performance of the economy will be a key macro-economic indicator to the health of this key retail sector."