Bob's Discount Furniture, an East Coast retailer owned by private equity firm Bain Capital, is planning a big push into the Chicago market.
"We'll follow up with another wave of openings sometime in the spring," with three additional stores, he said. "There's a lot of optimism in the air, and people are valuing their living spaces more and more."
Connecticut-based Bob's, founded in 1991, bills itself as an "everyday low price furniture and bedding retailer," with 64 stores mostly in Northeast and mid-Atlantic states. All of its stores have a cafe with complimentary coffee, ice cream, cookies and candy, its website says.
Bob's is at least the second out-of-state furniture retailer to make its presence felt in the Chicago market in recent years. Art Van, headquartered in suburban Detroit, has opened eight stores in the area since mid-2013 and plans three more in 2016.
Bob's announced plans to enter the Chicago market in January 2015 when it disclosed that it had leased a newly built 752,000-square-foot warehouse in Shorewood. At the time, Bob's, which had added nearly a dozen East Coast and mid-Atlantic stores in recent years, said the Shorewood distribution center marked its Midwest debut and would support its "exciting expansion plans into the greater Chicago market."
According to commercial real estate firm CBRE, Bob's has signed leases in: Villa Park, in a former 44,000-square-foot fitness center; Schaumburg, in a onetime 32,000-square-foot office supplies superstore; Aurora, in a defunct 26,000-square-foot men's clothing store; and Skokie, in a 26,000-square-foot store in Orchard Plaza.
Calumet City is among the cities that will get a Bob's store in spring 2016, Flanagan confirmed, while declining to name the other two.
Of the eight Bob's stores planned for the Chicago area, six will fill existing space, one is a "massive" renovation, and one is new construction, Flanagan said.
Bain Capital, the former buyout firm of 2012 Republican presidential candidate Mitt Romney, announced a deal in late 2013 to buy a majority stake in Bob's from another private equity firm. "Bain Capital brings the experience and resources we need to support our continued expansion to serve more customers in more places," Ted English, Bob's chief executive, said in a statement when the Bain deal was announced.
Other Bain retail and consumer investments have included Michaels Stores, Dunkin' Brands, Outback Steakhouse and Burlington Stores.
Adam Foret, associate in CBRE's retail services division, chalks up the expansion of furniture retailers to several factors.
"Chicago is the third-largest market for furniture sales in the nation just behind New York and Los Angeles at $2.5 billion annually," Foret said. "Any furniture retailer would love to get a piece of this market."
Foret also said the Chicago area's housing market continues to improve, which invigorates retailers like furniture chains.
Also, a retail shakeout has presented new leasing opportunities in the Chicago area, he said. Some spaces vacated by the defunct Dominick's grocery store chain, for example, have been fashioned into properties for two or three new tenants.
"We continue to see other retailers move within markets to right-size their footprint and get to a more efficient size for some of their new concepts," Foret said. "This may leave vacancies of 20,000 square feet to 40,000 square feet that furniture groups have been able to take advantage of."
Foret doesn't expect a slowdown in furniture retail expansion, explaining that it's a hands-on shopping experience that's relatively insulated from the impact of online shopping.
"Customers need to feel the couches, lay on the beds and see how the lamp fits with their sofa before they will buy it," Foret said. "We are seeing some mattress retailers like Casper and Leesa figure out how to sell their product online, but unless you can figure out how to stuff an entire bedroom set into a box and ship it to a customer's home, while providing free returns if they don't like it, then I don't see them making a large impact on traditional furniture stores any time soon."
Art Van's eight local stores are in Chicago's Logan Square neighborhood, and the suburbs of Orland Park, Batavia, Bedford Park, Woodridge, Merrillville, Ind., Naperville and Downers Grove, which it considers its flagship location. A franchise location in Rockford will open this month.
Only the Woodridge location was built from the ground up. The flagship Downers Grove location was formerly occupied by a home improvement retailer. Art Van spent $13 million to renovate it.
Art Van in 2016 will open stores in Glendale Heights, Algonquin and Schaumburg, where, according to CBRE, it will take 71,000 square feet in a former Dominick's.
Art Van said it sees "great potential" in the Chicago area, partly because of how fragmented the market is.
"It's the third-largest furniture and mattress market in America," said Art Van spokeswoman Diane Charles. "There is no one furniture retailer that dominates more than 10 percent of the market."