Bombay ends foray into kid furnishings

Bombay Co. Inc. is dumping its BombayKids brand just five years after it introduced the juvenile furnishings line at its Westfield Downtown Plaza store and 59 other locations.

The struggling home furnisher, based in Fort Worth, Texas, said it will close all of its BombayKids operations over the next 12 to 18 months as part of a multimillion-dollar effort to turn around its fortunes.

Only four of Bombay's 60 Kids stores stand alone. Like the store at Downtown Plaza, the rest are attached to regular Bombay stores, although the company counts them as separate entities.

As each store makes the transition, Bombay will replace the kids merchandise with core furnishings, according to Bombay's most recent filings with the Securities and Exchange Commission.

"To attract customers and drive sales and margins, we need to return to our heritage and capitalize on the niche that Bombay occupies in the specialty home furnishings area," said Bombay chief executive David B. Stewart in a news release.

The firm did not return calls on Thursday seeking specifics about its Downtown Plaza plans.

Bombay's decision to leave juvenile furnishings -- one of furniture retailing's most consistently profitable segments -- reflects the pressure that midpriced specialty retailers are feeling from price-slashing big box stores on one side and high-end niche competitors on the other.

"The middle is ugly," said Doug Fleener, president of Dynamic Experiences Group, a retail consultant based in Lexington, Mass.

Discounter Wal-Mart Stores Inc. is the kid furnishings king with U.S. sales of $2.98 billion in 2005, according to a new report by industry trade magazine Kids Today, followed by Target Corp., Babies "R" Us and Kmart Corp.

Pottery Barn, a subsidiary of San Francisco-based upscale retailer Williams Sonoma Inc., ranked fifth with $615 million in sales.

Bombay's core retail business has struggled for some time. Its 2001 foray into kids furniture, bedding and room accessories was a bid to reconnect with consumers, said Bob Gordman, president of the Gordman Group retail consulting firm in Breckenridge, Colo. "But they never quite figured out what items appeal to kids and their parents," he said.

Bombay, with 472 stores and about 1,900 employees, expects it will save $7 million a year by shedding its junior brand. It also has trimmed 29 jobs at its Fort Worth headquarters, intends to slice $6 million from its advertising budget and cut back on price markdowns to save another $11 million.

But Bombay's 2005 net revenue fell $11 million over 2004 and continues to slide. Bombay's stock has drifted from a 52-week high of $5.25 a share to a new low of $1.36 on Thursday on the New York Stock Exchange.

That the firm couldn't profit from one of home furnishings' most lucrative segments reflects how deep-seated Bombay's problems are, said Steen Kanter, a former executive with Swedish-based Ikea. "The (juvenile) sector is great," said Kanter, who now heads his own Philadelphia-based retail consulting firm, Kanter International. "The problem is Bombay."

About the writer:

• The Bee's Jon Ortiz can be reached at (916) 321-1043 or jortiz@sacbee.com.