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60.3 F
San Diego
Wednesday, May 22, 2024

Pirch Finds Prime Luxury Position in New SoHo Location

Jeffery Sears

After less than seven years in business, San Diego-based home furnishings retailer Pirch recently landed its first location in New York City, in lower Manhattan’s trendy and upscale SoHo neighborhood.

The location, in a gentrified area increasingly home to arts and design-savvy consumers, fits nicely in the wheelhouse of Pirch, which lets customers “test drive” and view live demonstrations of an array of kitchen, bathroom, living room, patio and other designer fixtures on display in its showrooms, before buying them.

Operators said the newest store has 30 live “vignettes” in action, including indoor and outdoor kitchens and state-of-the-art spas, where the utilities are hooked up and operating.

Manhattan is also a proving ground of sorts for upscale retailers aiming to burnish their brands with their target national audience. “There are companies that are 100 years old and still don’t have a store in New York City,” said Pirch co-founder and CEO Jeffery Sears in a recent interview.

Property With a Past

Pirch’s ninth and largest U.S. store recently opened in a historic former ironworks buildings at Broome and Lafayette streets, converted to retail uses by the property’s current owner, Chicago-based General Growth Properties Inc.

General Growth, which owns more than 100 retail properties nationwide, also worked with Pirch in recent years to get the retailer into other centers where it was looking to bolster its roster of high-end tenants, including the Glendale Galleria near Los Angeles and other centers in Chicago and Dallas.

The latest available numbers, from the U.S. Census Bureau and the website City Data, indicate that SoHo has a median age of 36 and a median household income of just over $115,000.

However, since its May opening, Sears said the new 32,000-square-foot store has attracted a wide swath of customers from well beyond the immediate “South of Houston Street” neighborhood, with visitors from throughout Manhattan’s East and West sides, along with Brooklyn and Long Island.

The age range of customers has been from “36 to 81,” he said, reflecting the melting pot that typifies that city’s urban core. Its customers are looking to keep their current homes for the long term, and willing to spend a little more for amenities that help them cocoon, cook meals at home, and entertain guests in style.

Name Change

The privately held company, started in 2009, was originally known as Fixtures Living before changing to Pirch — a variant on “perch” — in 2013. Its San Diego corporate offices and retail store are located at Westfield Corp.’s Westfield UTC mall in University Towne Center.

In addition to live, interactive demonstrations of furnishings and fixtures, Sears said the company recently beefed up its web presence to help its customers connect with its in-store educational offerings, letting them register, for instance, for cooking and other home improvement classes that help maintain customer loyalty and engagement well beyond purchases.

The company said it had more than $200 million in sales in 2015, which it said represented growth of 60 percent over the prior year. Pirch is projecting similar growth for 2016.

Sears said the New York store was the result of more than a year of planning, and its next market targets for new stores include Miami, Fla., Boston and Washington, D.C.

Sector Sees Improving Profit Margin

According to a recent report by industry research firm IBISWorld Inc., U.S. furniture stores continue to rebound from the severe spending downturn spurred by the housing market crash and Great Recession of 2007-09.

Sales for U.S. furniture retailers are expected to reach $59 billion in 2016, after growing annually by an average of 2.5 percent since 2011. Over the next five years, revenue is expected to grow by a slower 0.7 percent annually, reaching $61 billion by 2021.

The industry’s total profit is expected to reach $3 billion in 2016, for a 5 percent profit margin — an improvement over the 3 percent margin posted in 2011.

Rising consumer sentiment and discretionary spending have encouraged consumers to ramp up purchases of big-ticket home goods, including furniture. That consumer confidence is expected to help grow sales in the coming five years, in spite of concerns about falling home ownership rates, which have dropped 3.2 percent nationwide in the past five years.

Investing in Luxury

Since 2013, Pirch has been minority-owned by Catterton Partners, a private equity firm based in Greenwich, Conn. Earlier this year, Catterton announced that it has partnered with the private equity arm of luxury goods maker LVMH and Groupe Arnault to create a new global private equity firm called L Catterton.

Pricing on the deal was not disclosed. Officials of the three firms said the combined entity, after the deal closes later in the year, would have total assets of approximately $12 billion, making it the world’s largest consumer-focused investment firm.


CEO: Jeffery Sears

Founded: 2009

Headquarters: San Diego (UTC)

Revenue: Approximately $200 million in 2015

Employees: More than 600 nationwide; more than 200 in San Diego County

Company description: Operates nine upscale stores selling furniture and related home fixtures, with showrooms allowing customers to test products and view live demonstrations before buying


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