Furniture Firm to Get Another Name Change : Failure of Brick Warehouse Title Leads Cousins to Switch Again--Now It’s Furnishings 2000

Shoppers at Cousins Home Furnishings’ furniture stores might well be wondering what’s in a name.

A little more than a year ago, San Diego-based Cousins closed its 24 home furnishings stores--which operated as both Family Furniture and Cousins Home Furnishings--for a costly remodeling before reopening as a furniture store chain under the Brick Warehouse name.

Last week, Cousins announced it was abandoning the Brick Warehouse name in favor of Furnishings 2000. In addition to the name change, Cousins will add furniture which could give the San Diego-based company entree into middle- and upper-middle income homes.

Will shoppers be confused by Cousins’ abrupt name and merchandise switch?

“We don’t think there’s going to be any confusion,” said Daniel P. Selznick, director of Cousins’ executive committee. “We think our position in the market will come across immediately.”

Unlike its arrival a year ago, the Brick’s demise will be quiet: “No closing sales and no hoopla,” Selznick promised. However, Cousins will trumpet Furnishings 2000’s arrival with a $10-million first-year advertising campaign.

“We wouldn’t be doing this if we didn’t think it would work,” said Selznick. “We were limited to the lower-end warehouse operation with the Brick. What we’re attempting to do with Furnishings 2000 is go after the overall market . . . (with) more upscale furniture and a better selection across the board.”

Although the company reported $6 million in net income for the second quarter ended Dec. 31, the black ink was generated by an $8-million, non-operating, pretax gain from the sale of a wholly owned subsidiary.

From operations, Cousins reported a $1.3-million loss for the quarter and a $3-million loss for the first half.

Those losses followed on the heels of a $6.1-million net loss for the fiscal year ended Sept. 30, 1984--Cousins’ first year as a public company. During fiscal 1983, Cousins reported $862,000 in net income.

The red ink was generated by a rapid expansion during 1983 and 1984 that transformed Cousins from a company with three stores to a chain with 24 stores in Sacramento, San Francisco and San Diego.

In 1984, Cousins founder Sid Levitz acknowledged that the company “grew too fast and we couldn’t digest it as quickly as we thought we could.” In August, 1983, Cousins sold more than half of its stock to the Brick, a Canadian furniture and appliance retailer.

Cousins’ new owners installed a new management team and, last year, secured a private equity placement to help stem the flow of red ink.

Although Selznick maintained that the Brick name and merchandising mix had Cousins “moving in the right direction,” he said that the Furnishings 2000 name and a more upscale merchandise mix will fuel a “six-to-eight-month leapfrog” toward profitability.

Despite Cousins’ operations in San Diego--considered a “tough furniture town” by industry experts--the company appears to be on track toward regaining profitability, said Wallace Eperson, an industry analyst with Wheat, First Securities in San Francisco. “If they use the kind of product promotion and employee training that they’ve been using with the Brick Warehouses, they should succeed” with the new product mix, he said.

However, Cousins will not raise its low margins to become profitable, said Selznick, who added that Cousins is “happy with the margins we’ve got.” Instead, Cousins hopes to build revenues by “getting more people through the turnstile and ringing the cash register more.”

Selznick acknowledged that Cousins “is not ecstatic with the losses. We’d like to be generating profits without selling the subsidiary. But we are in fact heading in the right direction.”

Cousins likely will not build new stores to build its revenues, however. With the exception of a soon-to-open store on Union Square in San Francisco, Cousins will rely on increasing volume at its existing stores.

Selznick said Cousins will not be forced to repeat the hefty losses that began when Cousins closed stores before reopening them as the Brick Warehouses.

“We will see some very limited closure time . . . the primary reason being that we need to get the stores set up and get displays moved in with the newer merchandise,” Selznick said.