Where’s Jake Jabs going next? His strategy revealed

ENGLEWOOD, Colo. — In choosing sites for its next two stores in Arizona, Top 100 retailer American Furniture Warehouse is letting the population guide its moves.

The Englewood, Colo.-based retailer has plans in place for a fourth store in the greater Phoenix metro area as well as its first store near Tucson, Arizona’s second-largest city. In both cases, the retailer is putting down roots in areas of high growth.

As first reported by the Phoenix Business Journal, AFW aims to build a 200,000-square-foot facility in Surprise, northwest of Phoenix. Of the square footage, 150,000 will be for a showroom with 50,000 square feet of warehouse space. The property is located at the northeast corner of Loop 303 and Waddell Road, north of a planned 700,000-square-foot retail, restaurant and entertainment center.

“What you look for is fast growing areas,” Jake Jabs, AFW’s founder and CEO, told Furniture Today. “They built this new freeway in Phoenix, 303, and I decided to drive it one day. I was amazed with the houses going up there; builder after builder after builder. I found out it’s one of the fastest growing areas in Phoenix.”

Plus, he said, the American Furniture Warehouse name doesn’t need much of an introduction there. Jabs said AFW trucks make deliveries to that area often, and the name recognition showed through in a recent poll of consumers’ wants. “They did a poll and one of the most requested stores that people wanted in Surprise was American Furniture Warehouse,” Jabs said.

American Furniture Warehouse currently has two stores open in the Phoenix area, in Gilbert and in Glendale, with a third store expected to open this fall in a former Costco in Phoenix. Geographically, Gilbert is in the southeast of the Phoenix metro and is close to Chandler and Mesa while Glendale is in its northwest. The Surprise store would be further to the northwest, opening additional opportunities in the city’s northwestern suburbs. The third store is in Phoenix’s uptown.

AFW’s location strategy in Phoenix mirrors the approach the retailer took when entering the Houston market in 2018. In both instances the retailer surrounded the city core with locations in rapidly growing suburbs, almost literally forming a circle around the cities’ center. Jabs noted at the time that the company targets high density population centers where its large stores and product assortments enable it to capture a broad base of customers. “We’ve had stores in Montana and Wyoming, but I’ve learned we’re geared for big populations,” Jabs told Furniture Today at the time of the Houston opening. “To make our thing work, we’ve got to do a lot of volume.”

That strategy is also in full view in Marana, which is one of the northernmost cities in the greater Tucson area. The company has purchased 19.24 acres of land northwest of the city in Marana for $8,085,400 in Twin Peaks, near Interstate 10.

“We’ve been looking at Tucson for a long time. We just couldn’t get a good location. It’s the fastest growing new area in Tucson. It’s a good freeway location and access,” Jabs said.

Jabs went back to his bag of tricks to pick the Marana site, taking to the skies to see which areas are growing and primed for more. He said Tucson presents plenty of opportunities.

“We rent a helicopter and look at where the rooftops are going. I’ve done that in every location, sometimes more than once. You spend a couple thousand on a helicopter and see what’s going on,” he said. “In Tucson, the main stores there are Ashley stores and Sam Levitz but there aren’t many others so I think it’s wide open.”

Jabs said both locations are out for bids, but with today’s difficulties in getting raw materials, he wouldn’t be surprised for it to take close to a year before the stores are open.

 

See also: