Homestore plans for more noods

Homewares chain nood's financial controller Clark Richards says "a reduced margin is better than having no margin". Photo / Martin Sykes

Despite the recession, Jan Cameron's new homewares chain nood has opened a store in downtown Auckland's Britomart precinct, and plans to continue expanding.

It's the Kathmandu founder's seventh nood store, the first of a planned 15 to 20 in the next couple of years, and comes alongside her plans to grow her new Dogs Breakfast Trading Company chain - the former Arbuckles manchester outlets - into a chain of 30.

If observers said it was a funny time to be opening a store targeting such discretionary spending as homewares "I would understand their surprise", said company financial controller Clark Richards.

The store has taken over the premises of interiors store Eon Design which went into receivership late last year.

It was a matter of taking an opportunity when it arose, he said. "In a recessionary climate there are some well-priced bargains or sites around."

Because of the location, the outlet has done better than most startup stores.

However, Richards conceded demand was sluggish and times were challenging.

Over Easter, the store, which sells replicas of mid-century modern European furniture, bedroom furnishings, luggage and knick-knacks, held a 50 per cent off sale and Richards said discounting was necessary in this environment to stimulate sales.

"It really is the way to go at the moment. Having a reduced margin is better than having no margin."

But he said the time had not yet come to change the business model or scale back expansion plans.

"The scenario could change but at this stage that is definitely the intention, to keep expanding those brands and obviously hope for a more retailer-friendly climate."

Owner of the competing six-store Nest homewares brand, Pixie McKinnon, said it was evident customers were watching their spending. "Customers are buying less, and buying more carefully."

Nest had stopped importing the British Habitat range of furniture and lighting because of the impact of the exchange rate and of customers not buying big-ticket items.

Instead it was concentrating on kitchenware, dinnerware, fashion homeware and bedlinen with a contemporary look.

It designed its own products, including a new range of 100 per cent cotton textiles, and exported to Australia. "Export of our Nest branded-products is providing our highest growth potential right now."

McKinnon said in this market the top end was getting smaller. "Retailers carrying a medley of expensive imported brands will be doing it pretty tough. Especially if they are to be found in other stores, possibly at cheaper prices."

At Parnell design store Essenze, which sells the products of New Zealand artists such as lighting designer David Trubridge, business had grown 17 per cent in the past six months, founder Clare Mora said. Essenze sold unique products which differentiated it in the market, she said.

It was also focusing more on local retailing because its export business to the United States had been severely hit by the global recession. The closing of Eon Design, its main competitor, was opening up opportunities.

However, Mora said widespread discounting in the homewares sector had created an expectation among customers

"It's almost the norm now to ask for the best price, and it's quite often that we have to refer to the fact that we're just simply not a two-dollar shop."

Daniel Vincent, director/owner of The Homestore which aims at the mid- to upper end of the market, said the wedding season had kept his Newmarket and Sylvia Park stores busy.

Sales were up and average spending was steady. People still got married through good times and bad, "and their guests always want to buy them something nice", he said.

Outside of that business was tracking according to budget and he believed that was because The Homestore was an established brand with a "well-heeled" customer base.

He said winter would be the real test for the seasonal homewares business.