Speaking of the Room & Board store and not knowing how the retail industry works

The Post covered the opening in a brief in the Monday business section, "Home furnishings retailer Room & Board opens D.C. store." From the article:

Room & Board will likely be a cheaper alternative on a corridor known for small, independent furniture sellers, and the chain is projecting $16 to $18 million in annual sales. But can it outlast the sluggish housing market better than West Elm?

The Post's opining misses the point about West Elm vs. R&B. The array of items offered is completely different. R&B is a furniture company. West Elm is a lifestyle store. WE was located downtown, as a lonely lifestyle outpost with a few pieces of furniture--except for the Macy's downtown store furniture department (which I have bought furniture from, when it was Hecht's and as a Macy's).

Room & Board is a furniture company that makes a lot of its own products, therefore has a higher profit margin, plus it is part of a broader but still developing commercial district with other companion stores, thereby drawing on a larger retail trade area.

Plus as a national firm with only one location in the DC region and a deep mailing list, it will draw people to this store on a scale that West Elm cannot, because R&B is exclusive (like how Ikea was when they had only a handful of stores in the entire United States, and one was in the Potomac Mills Mall--remember?).

Finally, West Elm didn't sell much furniture. R&B will sell a lot. And each piece costs a relatively decent chunk of change. Maybe they will sell fewer plates and knick knacks, but each $2,000+ table or couch has a much higher value to the store in terms of gross sales and net revenue.

According to the Post article, the company expects the DC location of Room & Board to generate $16 to $18 million/year in gross revenue. Sure the DC Home Depot grosses between $60 million and $70 million/year, but they have to have much more space, carry and sell a lot more items, and have way more staff in order to do it...

Also see this past blog entry on the failure of West Elm, "West Elm is closing their downtown DC store."