Paul's TV's Stores Within Stores

The retailer is looking to partner with furniture dealers

While the furniture industry logged one of the worst economic years in history last year, at least one specialty retailer sees the industry as a holy grail for growth.

Paul's TV, an Irvine, Calif.-based home electronics retailer, is looking to partner with home furnishings retailers to create stores within stores to sell consumer electronics—most specifically televisions, speakers and anything related to home theaters.

Since 2007, the small, growing company has partnered with a number of high-profile furniture retailers, most recently Art Van Furniture in Warren, Mich. The retailer, also known as "The King of the Big Screen", is also a partner with Rancho Cucamonga, Calif.-based Living Spaces and Jordan's Furniture in the Boston area.

The Living Spaces deal was struck in 2007, and Paul's TV stores rolled into Jordan's stores in May 2009. The store-within-a-store concept is in the midst of being rolled out chain-wide to the 31 Art Van stores thoughout Michigan. In addition to the 14 stores that are now open in furniture stores, Paul's operates two freestanding locations—one in La Habre, Calif., and one in West Los Angeles.

Babak Ghaznavi, president of Paul's, has high hopes for the growth opportunities by partnering with furniture retailers, and he views the partnerships as a win-win-win for Paul's, furniture retailers and the consumer.

"We know televisions and home theater equipment," Ghaznavi said, adding that the company does a hefty amount of advertising in markets in which it operates. Those advertising dollars send consumers into the furniture stores in which Paul's TV's are located.

The partnership approach may not be for everyone, Ghaznavi admits, emphasizing that Paul's approaches each potential deal cautiously.

"Retailers can be stingy with floor space, and they want to be sure our level of customer service is equal to their level of customer service," he said. "We operate with caution because we're working in someone else's kitchen."

Ghaznavi's goal for Paul's is simple and to the point: Partner with financially sound, big-box retailers who are major players in their markets and roll out those stores-within-stores for maximum consumer exposure.

"This is not a new concept," he said. "It's similar to Starbucks in a grocery store or a bank in a super store. It's not a new approach, just different product."