Paul TV’s Format in Furniture Stores Runs into Roadblock

As Paul’s TV expands a store-within-a-store format with furniture retailers, it has run into a roadblock in Michigan. The dealer launched the concept in 2008 at five-store Living Spaces Furniture in the Los Angeles area and added four-store Jordan’s Furniture in Massachusetts last year. But a similar agreement with 30-store Art Van Furniture brought conflict with ABC Warehouse, which shares many strip malls with the furniture dealer.

Art Van’s, which has locations stretching from Traverse City, Mich., to Detroit, has the 3,000-square-foot Paul’s TV sections in 21 stores and will have them chainwide by late summer, the retailer has said. Art Van’s typically has 60,000-70,000 square foot stores. At the same time, Art Van’s for years packaged its furniture with TVs sold at nearby ABC Warehouse locations. But as the Michigan economy soured, Art Van’s began looking for new lines of business, adding patio furniture, carpeting, hardwood flooring and forming an alliance with Paul’s TV. As a result, 13 Art Van’s locations added Paul’s departments in March, but with a more limited assortment of JVC, Mitsubishi, Panasonic and Sharp TVs. Samsung and LG Electronics products so far haven’t been part of the Art Van’s mix in Michigan, although the brands are carried at Living Spaces and Jordan’s. Living Spaces and Jordan’s carried a broader assortment of brands because the chains were smaller and didn’t produce the conflict that Art Van’s did with ABC, sources said.

The Paul’s TV sections have been aggressive in recent weeks in Art Van’s stores. Art Van’s circulars have been promoting Mitsubishi’s 73-inch DLP-based rear projection TV at $1,497, down from a $1,999 minimum advertised price and bundled with a Callaway Diablo brand golf driver. Mitsubishi executives wouldn’t comment. Many CE vendors thought that all their competitors would move forward with Paul’s TV/Art Van’s plans, and were caught short when that didn’t materialize, one executive said. Art Van’s initially tried to land direct distribution agreement with CE manufacturers, but were turned down, sources familiar with the plans said.

Before Paul’s was even thought of, Art Van’s reached out to CE vendors and tried to get set up directly and were turned down, CE manufacturer executives said. “It was kind of like why would you put two McDonald’s on the same street corner?” one said. “There was the proximity to the ABC stores and Van’s offered nothing new” for CE companies since both chains had commissioned sales floors, the executive said. But sources close to Panasonic said the company felt that allowing Paul’s TV to sell its products at Art Van’s promoted fair competition. ABC and Panasonic officials declined to comment. Paul’s and Art Van’s officials weren’t available for comment.