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Brand Source Gains Mkt. Share

3/19/2008 01:43:00 PM Eastern

Dallas — Brand Source, the nearly $11 billion home furnishings buying organization, continues to take share in nearly all of the categories in which it competes, and is poised to consolidate its gains as big-box category killers lose momentum amid a changing retail landscape.

That was the view from the top provided by Brand Source CEO Bob Lawrence, who is presiding over the majap, CE, furniture and flooring group’s four-day Spring Summit and buy fair this week in Dallas.

Indeed, the group has “taken back share” for the past three years and readily outpaced the industry sales averages in 2007, with white-goods volume up 3 percent in a down market and CE sales up 16 percent, Lawrence told TWICE. Majaps comprise fully 50 percent of Brand Source volume, he said, followed by CE at 30 percent and furniture and floor coverings at about 15 percent each.

During Tuesday’s general session, Lawrence told attendees that box stores are no longer the end-all and be-all for vendors. As chain stores near saturation levels and consumers’ demands and service needs grow, “The prevailing belief that bigger is better will break down, and aggregation of small will be the new big,” he said.

Despite some “choppiness” during the first quarter, particularly in the hardest-hit housing markets of California, Florida and Michigan, Lawrence’s take was borne out by the generally upbeat reports coming from the member rank-and-file.

“My business is doing very well, and MARTA is doing better than we ever have,” said Herb Weisblatt, principal of Ft. Worth, Texas-based Sam’s and a longtime member of the Brand Source affiliate. “Through our association with Brand Source, MARTA has increased its services and decreased its overhead. I was pleasantly surprised at our MARTA meeting. There was not nearly the pain I expected to hear.”

Similarly, Barry Kindy of North Canton TV & Appliance in Ohio is enjoying strong CE demand and a robust custom install business. “We serve a discerning customer,” he told TWICE. “We’ve been in business a long time and have a name in the community, and when the more affluent people upgrade their homes they come to us.”

For Bill Arnold of Sound Investments in Morgantown, W.Va., it’s the premium appliance segment that is “paying the bills.” While the strict distribution policies of luxury majap brands provide protection from mass merchants, his smaller size allows a “personal expertise” and marketplace nimbleness that regional and national chains can’t match.

“I can keep my overhead down and my inventory cleaner,” Arnold said. “You either learn to live on less or you’re out of business.”

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