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Top 50 Major Appliance Retailers: Appliance Sales Grow 3.7%

Sears continues slide, but plenty of players there to suck up market share 6/06/2016 08:00:00 AM Eastern

OK, so it wasn’t the strongest year on the record books for major appliances.

In fact, any time CE retail sales (up 4.3 percent last year) surpass white-goods, you gotta wonder.

But after a see-saw decade marked by a housing-market boom, years of soft recessionary business, and then a post-recovery breakout, majap sell-through returned to the mean in 2015.

Related: Obtain The 2016 TWICE Top 50 Major Appliance Retailers Report

According to the latest tally from TWICE market research partner The Stevenson Company, total white-goods sales for the nation’s 50 largest appliance dealers — which account for better than 90 percent of the entire U.S. market — rose 3.7 percent last year, to $27.8 billion.

The reckoning was a bit of a letdown from 2014, when the industry’s top dealers enjoyed a 5 percent sales gain, and was half as strong as the 9 percent rebound garnered in 2013.

Sears’ Fall From Grace

Putting a damper on things last year was Sears. Long the crown prince of appliances, the company’s core white-goods business fell 19 percent in 2015 as a litany of long-term structural and strategic issues at its Hoffman Estates headquarters began to coalesce.

The downturn, which cut Sears’ majap proceeds by a billion dollars, was a drag on Top 50 results, and pushed the company down to third place from second, just three years after giving up the No. 1 spot to Lowe’s.

See also: Sears Slips In Top 50 Majap Retailers

Similarly, sister chain Kmart, which management had believed would benefit from the introduction of Kenmore appliances, saw its majap sales slip 16 percent, and its ranking fall from 24th to 30th place.

Leapfrogging Sears for the No. 2 spot in this year’s lineup was The Home Depot, while Best Buy held fast in fourth place, and Sears Hometown stores — whose spinoff initially led to Sears’ displacement — stayed at No. 5.

Elsewhere within the Top 10, Walmart, now No. 6, pushed ailing hhgregg down a notch to seventh place, while Nebraska Furniture Mart (NFM) joined the inner sanctum at No. 9 with the opening of its third mega emporium, in Dallas.

See also: TWICE's Top 100 CE Retailers Report

What’s Cooking

Sears can’t blame the macro-environment for its predicament, as most of the Top 50 players, with few exceptions, enjoyed higher appliance sales last year.

Leading the pack with a 120 percent surge was Pirch, the super-premium appliance, plumbing fixture and kitchen cabinetry chain, which joins the TWICE rankings at No. 20 with $146 million in sales last year.

The figure is sure to soar even higher with last month’s opening of a three-story flagship showroom in Manhattan, and a ninth location that’s planned for Austin, Texas.

Related: Chill Today, Hot Tomorrow

As mentioned, fresh real estate was also a major driver for NFM, which enjoyed a 62 percent spurt in appliance sales, despite relegating the category to the far left rear of its new Dallas showroom.

Other top gainers included IKEA, another new addition, which enters the rankings in 46th place as sales of Whirlpool-sourced, private-label refrigerators, dishwashers and ranges rose 31 percent last year, to $37 million.

And let’s not forget Amazon, which edged up to 15th place from 17th on a 21 percent sales spike, as third-party sales — by many on this list — contributed to a $205 million payday.

Meanwhile, Lowe’s held fast to its No. 1 spot, buoyed by an 11 percent sales gain within its well-appointed appliance departments.

Hello, Goodbye

Besides Pirch and IKEA, another new addition to the TWICE Top 50 is Hahn Appliance Warehouse. The 51-year-old independent dealer, based in Tulsa, Okla., operates three showrooms featuring fully functional live displays, and is led by CEO Lee Sherman, who last year threw in his lot with the Mega Group USA buying organization. Hahn comes in at 35th place, after posting a 6.6 percent gain that brought in $65 million in white-goods revenue.

Gone but not forgotten from the Top 50 are Yale Appliance & Lighting, the renowned Boston-area chain, and Atherton Appliance and Kitchens of Redwood City, Calif., the premium appliance, kitchen cabinetry and lifestyle dealer, which ranked near the bottom of the listings last year, and missed the $32 million cut-off this go ’round.

Notes From The Underground: What Top 50 Dealers Are Doing

As part of its data collection, TWICE market research partner The Stevenson Company invited appliance dealers to share their latest news and marketplace observations. Here’s a sampling of their responses:

Pirch, San Diego (No. 20): “2015 saw exponential growth in our pipeline with the addition of our Garden State Plaza location in Paramus, N.J. We are expecting the same growth through 2016 with the introduction of our flagship location in SoHo, which opened in Manhattan in May. In addition, Pirch has launched its first digital presence, and we are poised to open a 10th location in Austin, Texas, in February.”

Famous Tate, Tampa, Fla. (No. 32): “2015 was another very promotionally driven year that brought solid volume growth albeit at slightly reduced gross margin. We are optimistic [about] 2016 and will pursue additional market share as we keep aggressive promotional activities in front of our potential customers. Famous Tate is celebrating 62 years in business and will open another store (No. 11) in North Tampa in Q4.”

Hahn Appliance Warehouse, Tulsa, Okla. (No. 35): “Oklahoma was seriously impacted in 2015 by the decline in the oil industry. There was a significant reduction in housing and remodeling projects. We feel OK that we were able to show a small increase in growth while the state showed double-digit declines.

“2016 will still be a tough year because of oil prices and housing starts. We are focusing on reducing costs and optimizing every opportunity we have in front of our customers. Appliances still break and that is our main target. We must do everything we can to get that customer in our store in 2016.”

University Electric, Santa Clara, Calif. (No. 49): “Our focus has been on luxury for the past year and the luxury segment of our sales has increased 20 percent. This year we are looking for a larger presence on the Internet but do not plan to conduct e-commerce due to trade restrictions on many brands we carry; instead, we plan to reach more customers who do not already know us, and drive their business to our store.”

Methodology

The TWICE Top 100 Major Appliance Retailers Report ranks the leading domestic white-goods dealers by sales of major appliances for the 2015 calendar year.

Sales figures are based on information that was supplied by retailers responding to a survey by TWICE and its research partner The Stevenson Company. Absent their input, estimates were developed from Stevenson’s internal market tracking surveys (TraQline) and industry sizing based on wholesale shipment figures from the Association of Home Appliance Manufacturers (AHAM), average retail price points by products, housing market data and other sources.

All estimates were further refined and submissions vetted using public filings with the Securities and Exchange Commission (SEC), TWICE industry analyses, financial analysts’ reports, published data and other sources. Sales figures for 2015 were then compared to 2014 sales tallies and adjusted if necessary to more closely track industrywide revenue growth.

Major appliance dealers must meet the following criteria to be considered for inclusion:

• sell new products directly to consumers;
• have brick-and-mortar retail stores or a significant online presence;
• sell major appliances as one of their principal lines of business;
• do not sell solely to the builder channel or to multi-family dwellings; and
• sell at least one of the following major appliance categories as defined by the Association of Home Appliance Manufacturers (AHAM): washers, dryers, refrigerators, freezers, dishwashers, ranges, cooktops, wall ovens, microwave ovens, room air conditioners and dehumidifiers.

Sales are considered to be the revenue received for merchandise only, and which is sold solely through the retail channel.

Stevenson, based in Louisville, Ky., has served the majap industry for the past 21 years. Its TraQline syndicated quarterly survey of 150,000 shoppers measures retail purchases of consumer durables, and provides estimates of unit and dollar market share and other key data points.

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