May 2016 RetailerNOW by RetailerNOW

MAY 2016

INSPIRATION+EDUCATION

Licensed Furniture Itâ&#x20AC;&#x2122;s good for celebrities, but is it good for you?

Rachael Ray partners with Legacy Classic Furniture

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MAY2016

TAKEAWAYS 1 Break your staff out of their sales funk. 22

2 Mapping your company’s future. 28

3 Increase mattress sales. 34 4 Securing long-term financing. 36

5 Following recall rules. 41

10 WHAT’S INSIDE

2. HFA President’s Letter 4. Editor’s Letter 18. Member Portrait: Lippmann’s Furniture & Interiors 24. Product Focus: Furniture for Your Changing Life 31. Next Generation: Jordan Boyst 28. Family Matters: The Future of Your Family Business 32. Take 2: China Towne Furniture & Mattress 36. Member Benefit: Long-Term Financing 38. HFA@Market: Highlights from High Point Market 41. Government Action: Product Recalls 44. HFA Community

DEPARTMENTS

Cover Story 10. Celebrity Licensed Products Sales & Marketing 16. Emails to Grow Your Business 22. Breaking the Slump 34. Increasing Mattress Sales

RetailerNOWmag.com

MAY | 2016

“

President Jeff Child RC Willey

The main dangers in this life are the people who want to change every thing or nothing. — Lady Nancy Astor

”

President-Elect Steve Kidder Vermont Furniture Galleries Vice President Jim Fee Stoney Creek Furniture

The one constant to our industry: Change

Secretary/Treasurer Sherry Sheely Sheely’s Furniture Chairman Marty Cramer Cramer's Home Furnishings

Jeff Child

Executive Staff Sharron Bradley Chief Executive Officer sbradley@NAHFA.org

HFA President

Mary Frye Executive Vice President mfrye@NAHFA.org Dan McCann Director of Marketing & Communications dmcann@NAHFA.org Membership Staff Jana Sutherland Membership Team Leader jsutherland@NAHFA.org Jordan Boyst jboyst@NAHFA.org Sherry Hansen shansen@NAHFA.org Michael Hill mhill@NAHFA.org Dianne Therry dtherry@NAHFA.org Kaprice Crawford Director of Education kcrawford@NAHFA.org

was giving my office a much-needed spring cleaning recently when I came across a copy of Furniture Today’s Top 100 Furniture Retailers for 1989. For some of you I’m sure 1989 seems like ancient history. For me, it seems like yesterday. It was interesting looking at the best of the best in the furniture industry from 27 years ago. Imagine my shock when I realized more than 70 percent of the companies on that list are not in business today. I wonder what the list will look like 27 years from now. I’m sure each of the companies has a story about why they’re no longer around, but as I thought about it I realized the ability to change plays a huge part in the success or failure of a business. I thought of all the changes our company has gone through in the last 27 years. If our stores looked like they did in 1989 would we still be in business? If we treated our customers like we did in 1989 would they keep coming back? If our operations ran like it did in 1989 would our service be what today’s customer expects? We know the answer to all these questions. Running a business is hard. Many times we get so caught up in the everyday duties of our business that we don’t really get a chance to think, strategize, and look at what’s going on in the retail world. As leaders, an important part of our responsibility is to be able to look out beyond the day to day and see trends, technology, and changes that will impact our business down the road. Change affects all of us, large or small, and right now things are changing at breakneck speed. Take some time (don’t feel guilty) and study what’s going on in retail—not just in the furniture industry. In order to avoid the same fate as those 70 percent, we need to not only work hard, but work smart. Where will your business be in 2043?

Please call 800.422.3778 for membership inquires.

Jeff Child

jeff.child@rcwilley.com

Twitter.com/retailerNOW Facebook.com/retailerNOW Pinterest.com/retailerNOW

MAY | 2016

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2005_RN_Surya_MECH.pdf

4/11/16

8:34 AM

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MAY | 2016

“

RETAILERNOW STAFF

”

What’s in a name? That which we call a rose by any other name would smell as sweet. — William Shakespeare

Lisa Casinger Editorial Director lcasinger@nahfa.org Robert Bell Editor rbell@nahfa.org

Licensed to sell?

Tim Timmons Art Director ttimmons@nahfa.org

Lynn Orr Business Development Lorr@nahfa.org Cassie Wardlow Digital Marketing Coordinator cwardlow@nahfa.org

Robert Bell

RETAIL ADVISORY TEAM

Editor, RetailerNOW

Carol Bell Contents Interiors Tucson, Ariz. Travis Garrish Forma Furniture Fort Collins, Colo. Rick Howard Sklar Furnishings Boca Raton, Fla. Mike Luna Pedigo’s Furniture Livingston, Texas Andrew Tepperman Tepperman's Windsor, Ontario This Month’s Contributors

Neal Cohen, Ginny Gaylor, Jeff Giagnocavo, Marty Grosse, Mary Martha McNamara, Gerry Morris, Wayne Rivers, and Martin Roberts. Contact Us RetailerNOW 3910 Tinsley Dr., Suite 101 High Point, NC 27265

ho says the stars only come out for the Oscars? Last month’s High Point Market had dozens of celebrities on hand. Kathy Ireland, Paula Deen, Donnie Osmond, Rachael Ray, Donald Trump, Jane Seymour, Sofia Vergara. They were all in town. OK, technically their furniture was in town. OK, that’s not quite true either. The furniture they’ve lent their names to was in town—and for sale. Some retailers are attracted to the category as much as fans are attracted to the stars themselves. Licensing in the home furnishings industry is big these days—by some estimates more than $1.3 billion big. Thomasville made its new collection with interior designer Anthony Baratta a focal point to its showroom in High Point last month. Legacy Classic Furniture and Rachael Ray made a lot of noise over its three collections revealed at the market. Manufacturers don’t invest the time and money unless there’s a market for licensed collections, but there’s one looming question behind the category: Is it right for you? This month’s RetailerNOW doesn’t try to answer that question—that’s for you to resolve—but we’re giving you a lot of information to help you decide starting on page 10. You’ll hear from manufacturers and retailers who swear by licensed collections, and you’ll hear from retailers who want nothing to do with it. I hope you find it informative. One last note: Our annual HFA Networking Conference in Long Beach, Calif., is just a few days away. From May 22-24, you’ll be surrounded by vendors, manufacturers and fellow retailers like yourself eager to lend a hand or ear and help you grow your business. It’s never too late to start strengthen your business and build the right relationships. Your annual conference is a just the place to do both. If you haven’t signed up, you still have time. I hope to see you there!

RetailerNOWmag.com 800.422.3778

Subscription: $70/year RetailerNOW, ISSN# 2166-5249, is published monthly (except March and December) by the North American Home Furnishings Association, 500 Giuseppe Court, Ste. 6, Roseville, CA 95678. POSTMASTER: Address changes to: RetailerNOW, North American Home Furnishings Association, 500 Giuseppe Court, Ste. 6, Roseville CA 95678. If you would like to stop receiving RetailerNOW, please send an email to RNOWunsubscribe@nahfa.org.

Robert Bell

rbell@nahfa.org

© 2016 North American Home Furnishings Association. Published by the North American Home Furnishings Association. Material herein may not be reproduced, copied or reprinted without prior written consent of the publisher. Acceptance of advertising or indication of sponsorship does not imply endorsement of publisher or the North American Home Furnishings Association. The views expressed in this publication may not reflect those of the publisher, editor or the North American Home Furnishings Association, and North American Retail Services Corp. Content herein is for general information only; readers are encouraged to consult their own attorney, accountant, tax expert and other professionals for specific advice before taking any action.

MAY | 2016

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V-commerce: It’s not coming, it’s here

Lowe’s home improvement stores will test Microsoft’s HoloLens virtual reality technology, above, in select stores.

At long last, 2016 is the year virtual reality becomes a consumer reality, giving the technology a fair bit of buzz within mass-market retail. The National Retail Federation’s Big Show featured a handful of virtual reality demonstrations in January, and with virtual reality and augmented reality devices projected to be a $4 billion business by 2018, much is being made of the technologies’ potential to transform the retail customer experience. One such demo at NRF’s Big Show was developed by digital marketer SapientNitro with luxury retailer The Line, a boutique specializing in home décor, clothing, and jewelry. The demo showcased a virtual shopping experience in which customers interact with a virtual display

that uses 360-degree video technology and a Samsung Gear VR headset to tour the showroom and learn more about the items on display. Lowe’s home improvement stores and Microsoft have partnered to test a design tool that uses Microsoft’s HoloLens virtual reality technology to display kitchen remodeling options. Customers can use the HoloLens to view different cabinets, appliances, colors, and finishes in a sample space. Lowe’s plans to pilot the HoloLens remodeling tool in the Raleigh, N.C., market soon. For now, v-commerce, like much of the virtual reality industry, is small and experimental with a focus on getting people to try the technology for the first time. “It’s just the start,” said Matt Lewis, manager of SapientNitro’s Second Story group. “We’re trying to tell our customers that this is the next wave of technology.” According to a recent article by CNET, early indications are that customers don’t just enjoy this gee-whiz technology, but they’re also more likely to buy products for their homes after seeing them in VR. For those stores and brands interested in capitalizing on the VR opportunity, follow the URL below for three strategies for developing a cohesive v-commerce strategy, from SapientNitro’s global innovation lead and managing director Adrian Slobin: http://tinyurl.com/pcxxwpj

 COOL APPS Design Shop

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Design Shop aims to ease beautifying a merchandise post by offering a large number of professionally produced graphics and templates you can use to make your photo—and thus your item—more attractive to prospective buyers. According to its founders, what sets Design Shop apart from other photo editing apps is its simplicity and quality of design. The app includes templates tailored to categories like Sales & Discounts, Must Haves, Handcrafted, Vintage Goods, and more. Each category opens to a series of free designs plus additional ones available for a fee.

The Yelp for Business Owners app makes it easier for retailers to engage with their customers and manage and monitor their Yelp reputation on the go. Retailers can get data about their user views, customer leads, and other activity on their Yelp Business Page. Yelp advertisers can also see their Yelp ad clicks. Retailers can also get real-time mobile notifications of new Yelp reviews and messages. No more realizing a bad review has languished for days. Now retailers can respond quickly to customers and prospects in real time.

 Free; iOS only. Pro subscription available for $1.99/mo. The seller, Overlay Studio Inc., also developed an app called Studio Design, available for free for Android devices on Google Play.

 Free; iOS and Android. NOTE: This app is for business owners to manage existing Yelp business pages. If you haven’t yet claimed your business on Yelp, go to biz.yelp.com, and follow the steps to find your business and create your business user account.

Want to share a cool app? Drop us a line at rbell@nahfa.org 6

MAY | 2016

RetailerNOWmag.com

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HFACHAT

do you market special Q:How orders and what percentage of your business do they comprise?

John Wells III

Wells Home Furnishings Charleston, West Virginia “Special orders are our life blood—they comprise 90 percent of our business. We’re a very “In-home, relationship-important” store with a staff of all designers. We market our value proposition through all channels—TV, newspaper, radio, magazine, billboard, Google, Facebook, Houzz. Our message is the branding of our two locations along with the customer’s ability to get exactly what they want instead of what we have. We have hundreds of styles with thousands of fabrics and leathers to select from.”

Don Norris Provencal Home Austin, Texas

“It’s known that people can do special orders on just about anything in our store. Everybody who walks in sees a gallery of a couple thousand fabric samples. A lot of furniture stores, because they only buy containers that are imported, what you see is what you get. They may have a dozen containers in a warehouse somewhere and they want to sell what they have in the pipeline. We are more designoriented—you have so many options to choose your fabric combinations, your wood finishes, the sizes of your rugs. Special orders account for about 45 percent of our business.”

Tessa Malette Furniture King Petawawa, Ontario

“We are an Ashley HomeStore Select. There are so many different SKUs—we can’t keep them all on our floor. If people like our product, they can either order off the floor models or from our catalogue. A good 80 percent of our orders are catalogue. We also have a brand-new website that people can order from shopping-cart style. We are not sure what the numbers are going to be yet, but just knowing how many people are doing online shopping now, we knew how important it was to have that for our customers as well.”

TOPSHELF All work and no play? Time to lighten up. (Funny Business, The Career Press, 224 pages) Can we get serious for a minute? According to Christopher Byrne in Funny Business, successfully incorporating the underlying principles of play into corporate life can lead to increased innovation, creativity, and long-range profitability. Using the power of play in your store can also transform individuals’ interactions with customers and change how your store interacts within your community. Byrne is serious about play. He draws upon 30 years of anecdotes from the toy industry to illustrate the power of play in creating innovative ideas, products, and organizations. The book will appeal to store owners and managers as well as those new to the workforce. At the end of most chapters, Byrne offers practical advice for implementing his strategies. Byrne believes an essential ingredient in play is to overcome risk and persevere through diligence and creativity. Harnessing this innate capability is key to unlocking innovation in your store. Of course, inherent in play is the ability to stop playing when fun ceases. However, adults have the propensity to push through even when there is ample evidence to stop. Recognizing when to quit is important in mitigating risk. Also, acceptance of failure as part of the process creates an environment of growth. In general, incorporating lessons learned through play will help businesspeople adapt to changes, tell effective stories, see failure as beneficial, play to win, and have fun both at home and at work.

Attention must be paid (Focus, HarperCollins Publishers, 320 pages) In Focus, Daniel Goleman discusses the many attributes of attention and how important it is in a person’s daily life. Without focus, it is nearly impossible to thrive in the modern world, but paradoxically, the modern world has created so many distractions that it is becoming increasingly more difficult to do so. Goleman’s analysis shows how high-performers in all areas must be masters of three types of focus: inner, other, and outer. By becoming experts in these three areas, leaders in any field will improve their habits, gain new skills, and achieve excellence. Every type of attention—even a wandering mind—has its uses. While it may hurt a person’s immediate focus, it often moves toward resolving problems. A drifting mind also allows for self-reflecting, planning, and organizing memories. Open time where the mind is free to wander can lead to great things. Tight schedules, on the other hand, can kill the creative spirit. Tightly focused attention gets fatigued. The antidote to this is rest. Goleman helps explain when it’s healthy to let the mind drift and how to stay focused in a world always competing for our attention. Book review: bizsum.com

MAY | 2016

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APRIL | 2016

SMASH HIT Country singer Eric Churchâ&#x20AC;&#x2122;s licensing deal with Pulaski Furniture has been a hit for both the singer and the manufacturer.

MAY | 2016

RetailerNOWmag.com

Licensed Products

Can they deliver increased sales? By Ginny Gaylor

ELEBRITY IS MORE A PART of our lives than ever before, from Paul Newman’s sauces and Ellen DeGeneres’ dog food to Jessica Alba’s line of non-toxic household products. If we can’t get our favorite celebs to drop by, the next best thing just might be furnishing our homes with their products. The furniture industry is flush with licensed collections, including those from Eric Church, Rachael Ray, and many more. But can a licensed furniture collection help the bottom line of your furniture store? Or is it a lot of fuss over a name that doesn’t offer equal bang for your buck?

RetailerNOWmag.com

MAY | 2016

RetailerNOW went looking for those answers and more. We spoke to Home Furnishings Association members, as well as manufacturers, to find out how licensed collections are doing around the country and, just as important, whether they’re worth your floor space.

“

If the product is well designed, a value and relevant, then the personality becomes a tie-breaker.

”

— HFA member Eric Easter, president and CEO of Kittle ,s Furniture

Product matters Eric Easter, CEO of HFA member Kittle’s Furniture in Indianapolis, offers six licensed collections, including lines from Trisha Yearwood, HGTV, Paula Deen, Tommy Bahama, William Mangum and Thomas O’Brien. “It is all about the product. If the product is great on its own, buy it. If not, don’t,” he says. Easter adds that when it comes to selecting product lines for Kittle’s, the focus is always on how well designed the collection is, how relevant the pieces are for consumers and what value the designs offer. “If the product is well designed, a value and relevant, then the personality or entity becomes a tie-breaker,” he explains. “We are always looking for tie-breakers.” Styles have changed, but the basic principle of furniture buying has remained consistent—product matters. Brandy Commodore, public relations and communications specialist for Jaipur Living, believes the success of a licensed collection depends on many factors from the licensor itself to the design and authenticity of the licensed collection. One of Jaipur Living’s 13 licensed collections is Kate Spade New York. Commodore credits the brand’s iconic image as creating certain consumer expectations. She explains that when it comes to home furnishings, “Signature Kate Spade New York designs, such as the dots, the stripe and the bow, must translate into new mediums in a recognizable and authentic way that will resonate with consumers.” Just like fashion, consumer tastes in furniture is forever evolving. For that reason, Commodore says Jaipur Living curates its collections to meet the demand of retailers, and ultimately the consumer. “Our retailers are always seeking

MAY | 2016

VALUE FIRST Eric Easter, HFA member and CEO of Kittle’s Furniture, says value always trumps celebrity when selecting licensed products for his Indianapolis store. high-quality product at an affordable price, and value is a very important part of the purchase process,” she adds. It really boils down to the connection between the brand and the licensee. Chris Phillips, Legacy Classic and Craftmaster Furniture’s director of marketing, says both retailers and consumers want to feel that the person associated with the product is valid and on trend, which he believes is the case with Legacy’s recently-launched Rachael Ray collection. “At the same time, the product should be first and offer styles, function and a perceived value to both retailers and consumers that relates back to the license and brand,” he says.

Selling the story Perhaps it’s obvious, but the biggest draw with a licensed collection is the story that the product or line tells consumers. Easter says, “It is a way for the sales associate to tell a differentiating story to the customer. If they know the personality or entity, it adds credibility and value. And if they don’t know the personality, there is an opportunity to educate and connect with the customer and create more value.” Easter finds that typically licensed collections are not what bring people into the store. But for some, that standout story isn’t enough. Jeff Selik, general manager of HFA member Hillside Furniture in Bloomfield Hills, Mich., feels that without a minimum retail pricing policy, licensed collections aren’t worth stocking. “With the internet, licensed products are too easily searchable,” he says. “We want to

RetailerNOWmag.com

try to keep the relationship between the client and us, the retailer, and not give them an opportunity to shop elsewhere.” Hillside offers a private-label licensed line. “We wanted to build the margin rather than promote the name and lose the margin,” Selik explains. He reasons that if consumers find the product available at other locations or online, the collection becomes over-shopped and ultimately results in his store’s profit margin being lowered to a point where it’s no longer financially feasible for the store to carry the line. “We are here to sell furniture and increase our profit margin, not to do anything to give my client the opportunity to showroom us and then buy the product online,” he adds. From a manufacturing perspective, Geoff Beaston, senior vice president of case goods for Klaussner, feels strongly that licensed collections add value to a product. Beaston says, “In all my years in the industry, I have never seen furniture buyers or consumers line up to see any non-licensed products like they have for a

SOUTHERN COMFORT Universal’s Paula Deen line is one of the more popular licensed products with home furnishings retailers.

RetailerNOWmag.com

MAY | 2016

BIG HIT Legacy Classic debuted its Rachael Ray licensed collection, below, in April to rave reviews.

RETURN IN SPADES Find the Hidden Meaning, above, is from Jaipur Living’s Kate Spade New York rug collection. Trisha Yearwood Collection or other licensed collections.” He feels that licensed collections create excitement and emotion around a line, ultimately offering value. “I have never seen a consumer say, ‘I really like this product, but since it is associated with a license, I don’t think I will buy it.’ And I have never seen a retailer not like hearing their name spoken when a celebrity says ‘Come see my collection this week at XYZ Retailer’ on a TV commercial promoting their store.”

Making licensed collections work Making licensed product work for you and your store is possible if you first consider several things. Does this licensed collection provide something to your store’s offerings that is currently missing? Adding a new licensed collection means something else must come off your floor. Do you have a collection that needs to be replaced, or will you be moving off a well-received line of products that may be missed? Therefore relevance is key to any licensed collection. Mary-Price Furr, vice president of marketing for Home Meridian International and Pulaski Furniture, finds that a brand or celebrity frequently comes to the furniture industry at the end of their brand relevance. “Their brand has been ‘milked’ by so many other products that their importance is slowly becoming diminished,” she says. The trick (and the risk) in Furr’s opinion is to find a licensee on the rising spectrum of their “stardom” or relevance. She recommends furniture manufacturers ask themselves: What is the next big name, product or celebrity? Finding that rising star, she adds “is the perfect licensing partnership—to find that—and build the brand together, is what I think Pulaski Furniture has done with Eric Church’s Highway to Home collection.”

MAY | 2016

Of course, a home furnishings store also has to be sure that a licensed collection can sustain the higher prices and margins it requires to be successful, something already mentioned as a potential drawback by some HFA member stores. The key to ensuring that a licensed collection will bring attention to your store is leveraging appropriately the equity of the licensed name. But first you have to make sure that whatever licensed product lines you want to sell appeal to your buyer, because if they don’t, he or she won’t put the items on the floor or promote them. Therefore any extra attention you draw because of the licensee’s name will be wasted. Finally, no matter how big a name is attached to a licensed collection, if the products (or the celebrity) aren’t relevant to your customers, no amount of exposure will make a difference. The product must connect with your customers and feel authentic to them. “Design drives purchase,” says Furr. “Retailers are looking for innovative, inspired and on-trend product. Additionally, these designs must be quality driven.” All these factors drive sales. Without them, not even the biggest and brightest celebrity name will help. Ginny Gaylor is an awarding-winning writer and editor based in Greensboro, N.C. She has more than 15 years experience writing on the home furnishings industry, as well as many other topics. She can be reached at ginnygaylor@gmail.com.

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250 of the top names

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2016-01-28 9:47 AM

To grow your business, drop an email in the mail By Jeff Giagnocavo

ou read the headline right. I want you to stuff a printed-out email in an envelope and stick a first-class stamp on it. Don’t get cheap and use pre-sorted postage. Use a real email and a real stamp. Let’s use an example that recently came across my business partner Mike’s desk. It was sent to his wife, Becky, about her car. For this article I will show you how to use this example on the opposite page from a car dealership and successfully swipe and deploy it for profit in your store. Candidly what I am about to share is not the way to do this. The proper way to use this marketing example is to have something like this self-generate via a robust, behavioral-based CRM that uses your point-of-sale data like a sales ninja, silently working in the night while you sleep, to deliver offers to all of your customers consistently, constantly, and automatically for incremental profits and sales that show up with little to no effort on your part. Systems like this are widely available simply by Googling “behavioral-based CRM” or “profit automation” or check out my company in the byline of this article. Now, back to how you profit by printing an email and mailing it. This letter is an offer to buy back Becky’s car, the most recent vehicle she bought from this dealership. I’m not asking you to buy back a sofa or mattress, but think about what else a customer who bought from you might now be interested in buying from you. And no, you are not already doing this by sending out eblasts about this month’s sales event, new introductions, or other special offers. This example is a true private mailing. This is a one-on-one conversation, a private conversation, about what they previously bought from you. In the age of Big Brother data, those age-old mailers

MAY | 2016

you’ve been sending since 1987 with no relevancy and personalization are the equivalent of saying ‘like our store by faxing us at 1-800-OLD-TIMEY!’ I’ve dissected this piece on the opposite page so you can swipe it for profit. Know that this “email” can be replicated in a word document by using the mail merge function, meaning you can print and mail this piece in-house. Or contact me via email for a recommended resource to print and mail this for you. Your message could be an offer for a “freshen up package” for that recently purchased living room set that is still usable but could use some updating. Could you go to those clients who bought a bed, dresser and mirror combo and offer to deliver them the night stands and chest? For those who offer design services, you could likely tap into six to seven figures in sales annually by using this simple marketing piece. Could your designer go out to the home of those who bought a new living room or dining set and offer to complete the entire first floor package? Now before you say it would be too expensive to give away your design services, what would you charge for this service $100? Maybe $200? Remember, you’re paying next to nothing for this sales opportunity versus spending new money on a new sales opportunity. In my stores (Gardner’s Mattress & More) we spend $93 to generate every sales ticket we write. Consider your new acquisition cost and move that money you would spend over to this opportunity which has a much higher chance of turning into a sale and likely a sale that is higher than your average ticket. You can use some time-sensitive value adds to encourage a fast response. Consider a P.S. line that offers free delivery, free mattress protector, discounted or free furniture protection if they come in within 7-10 days of getting the mailer.

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Some last thoughts on this piece. You may have gathered that this piece wasn’t truly a one-off email between Paul and Jeff about Becky’s car. This was a mailmerged, variable data printed mass piece that was generated from an existing customer database of those who own cars of a certain make and model. I don’t like the legal disclaimer at the bottom of this letter. I beg you not to use one yourself. Either you know your customer and what you’re offering them or you don’t. Demerit points for the dealership, gold stars for you if you avoid it. I also feel they miss the mark by showing a cheap base model American made car with a low ball lease offer when they “know” that Becky drives a very nice Acura MDX. Wouldn’t it have been better to show other newer Acura’s and cars of the like? Don’t you dare show someone who bought a $4,000 bedroom a $399 mattress, or a $299 recliner to someone who bought an all leather sofa for $3,500. Lastly the “handwritten” part of this is not handwritten, and my business partner Mike has a great solution called CopyDoodles (copydoodles.com) that helps you to accomplish this part of the piece. This certainly isn’t critical. I welcome your feedback and would love to see you implement this marketing piece in your store. In fact the first three people to let me know they did this and show me their examples with some success stories will be given a CopyDoodles Mattress Edition CD chock full of mattress specific CopyDoodles for your mattress-focused ads! Jeff Giagnocavo is coowner of Gardner’s Mattress & More in Lancaster, Pa. He is also the co-owner of Infotail, a sales and marketing agency. He regularly speaks at industry events on successful retail strategies. Jeff can be reached at jeff@infotail.com

Be sure to include the customer’s name as listed on their sales invoice. Your customer will appreciate the personalization.

2 Paul Fiedler is the sales manager at the dealership. Your “Paul” should be the salesperson who originally sold to the customer.

The send date can be the date you print your letters. It can be the same for all customers.

You’re not interested in buying back furniture or mattresses so consider what you might say here. In the last six to 12 months, who bought a sofa but not a loveseat or recliner? Who bought a dining set but no sideboard, buffet/hutch, or barstools? Who bought living room furniture but not accessories? There’s your message!

5 6

This “handwritten” note isn’t actually handwritten, but it sticks out and gives another personal touch to the letter.

Here’s your chance to show product. Just make sure it’s in line with what they bought and of the same or better quality.

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MAY | 2016

Long-Running Act For 67 years, Lippmann’s Furniture & Interiors has been a smash hit in Peoria. By Robert Bell

HICAGO CAN’T CLAIM IT. NO ONE'S ASKING it of Los Angeles or New York either. Indeed, you’d be pressed to find a city that has its name framed within a simple question that, since the days of vaudeville, serves as a barometer for typical American values. “Will it play in Peoria?” is a question unique to Peoria, Ill., and has been asked by politicians, marketers, actors, and others for generations in an attempt to gauge the pulse of the country. The thinking goes, if the good folks of Peoria, a river town in the heart of Illinois farm country, embrace what you’re selling, the rest of the country will follow. What does that say, then, about Lippmann’s Furniture & Interiors, a Peoria fixture these past 67 years? “It says we must be doing something right,” says Mike Wiesehan, who, along with his sister Kathy Wiesehan Crank, represents the fifth generation of family furniture dealers. “I think it says we’re providing a need, something our community wants. For me personally that makes it so much more enjoyable getting up in the morning.”

MAY | 2016

The company has expanded and contracted over the years, experimenting with different lines along the way, but one thing has remained constant. “We still believe in making our customers feel like they are important and their needs are important,” says Crank. “We really believe that. You have to if you want to be around for as many generations as we have.” About those generations: Wiesehan and Crank are only the latest chapter to Lippmann’s Furniture. They are the third American generation of home furnishings retailers, but the story traces its beginnings back to Germany, where Moritz Lippmann, Mike and Kathy’s great-grandfather, earned a living making kitchen cabinets and tables in the early 1900s. Lippmann’s son, M. Walter Lippmann was a textile engineer who spoke four languages. For years he offered his services to the U.S. Army as an interpreter and eventually worked out a deal to move to the United States a few months before Germany invaded the Soviet Union in 1941. As Mike Wiesehan tells it, M. Walter Lippmann, like his father, “had furniture in his blood.” Lippmann eventually settled in Peoria where he soon found a job

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working for a furniture store downtown. After a few years and saving up some money he opened his own furniture store. There are days when Mike Wiesehan wonders what life must have been like for his grandfather, a German immigrant in the United States during World War II. “He was determined not to fail, I suppose,” he says. “I think (Kathy and I) have done a lot to move the company forward, but we owe a lot to him.” Wiesehan always knew he’d be a part of the family business. His first job at the store was patrolling the outside of the building, looking for weeds to pull in the summer. Eventually he was promoted to filing papers, unpacking furniture, and helping out on deliveries. Wiesehan was part of the first graduating class of High Point (N.C) College’s—now High Point University’s—furniture marketing program. Crank, who earned degrees in fashion merchandising and business administration at Columbia (Mo.) College, went out on her own as a buyer for a major department store chain for

eight years before joining the family business. Wiesehan says brother and sister “feed off each other’s unique skill sets to keep the company moving forward.” Lippmann’s is the oldest family-owned home furnishings store in Peoria, a city known for being the headquarters to construction-equipment maker Caterpillar. At one time the Lippmann family owned three home furnishings stores—the original Lippmann’s flagship store in Peoria, a second store in nearby Bloomington, and a Thomasville store in Peoria. After about 10 years of stagnant sales at their Bloomington store, Wiesehan and Crank realized expansion in a secondary market like Peoria wasn’t a good idea. Only adding to their woes was the Thomasville store wasn’t growing either. Wiesehan and Crank closed both stores bearing the family name and moved the Lippmann brand into the Thomasville store. Looking back, Crank says she and her brother learned a valuable lesson: Bigger isn’t always better. Two lessons, actually. “If something has run its course, it’s OK

ACT V Mike Wiesehan and sister Kathy Wiesehan Crank are the fifth generation of family members to sell home furnishings.

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MAY | 2016

“

WHAT HFA MEANS TO ME

We’ve always taken advantage of the discounts on products through the association, but I was never as happy as when you started RetailerNOW. The magazine just speaks to us as independent retailers trying to grow our business. There’s always some topic in every issue that has to do with business in today’s world that I learn from and become a little smarter. Kathy Wiesehan Crank, Lippmann’s Furniture & Interiors, Peoria, Ill.

to cut back and try again later,” she says. “There’s nothing wrong with trying something, making a mistake, and learning from it.” The Peoria market isn’t big enough to accommodate two independent high-end furniture stores, says Crank. The Thomasville store never caught on with shoppers who were looking for more than one manufacturer. “We’ll never put all our eggs in one basket again,” she says. Looking back, Crank says both stores should have closed years before they actually did, but the family was reluctant. “We felt bad about closing stores that were a part of our legacy,” she says. “Our grandfather put his heart and soul into this business and we felt we were letting him down, but our mother told us not to worry and close them down. She said, ‘Grandpa would have closed it down, too, if it wasn’t working.’ That was the biggest lesson learned. That nothing is set in stone. You can always go back and try again in a few years.” Today, Lippmann’s Furniture & Interiors is one of the largest independent home furnishings stores in the tri-county area comprised of Peoria, Tazewell and Woodford counties. The store carries lines across all price points from Flexsteel to Durham, Stickley, Henredon, and others. Wiesehan has always thought Lippmann’s Furniture and Interiors was misnamed. “We’re an interior design store that happens to sell furniture,” he says. That philosophy has been the cornerstone to the store’s success over the years. With so many independents struggling to compete with the larger chains, Wiesehan says Lippmann’s finds its niche by teaching consumers about quality and value. 20

MAY | 2016

”

“We want to be open and educate the customer so that they can make an honest decision,” Wiesehan says. “We think we offer the best quality and value in the area—certainly better than a (big) box—but you’ve got to educate the consumer. We’re not the cheapest in town, but we strike a rapport with our clients and teach them early that it’s not all about price. The best marketing is education, but you really have to work at it.” Wiesehan and Crank are proud of the relationships they’ve built through the years—not just with their clientele, but manufacturers, too. “There’s something to be said for being able to pick up the phone and call Alfred Audi (the late Stickley Furniture president) or his son Edward. I know Peter (Bjerregaard) at Ekornes and have walked the factory floor with him in Norway.” “If a customer wants to see how something from Ekornes is built, I tell them I was at the factory in Norway and pull out my phone to show them how it was built,” Wiesehan says. “You can’t get that service from a chain. That takes years of relationship building.” Both Crank and Wiesehan haven’t ruled out other options for growing their business. Crank says a new store might be out of the picture for now, but branching out to a bridal registry or staging homes is a possibility. So is the notion of e-commerce. “I still say if you see a sofa or chair on the Internet, you need to sit in it and rub your hands across the fabric,” Wiesehan says. “A lot of people don’t understand the concept of brickand-mortar stores and the durable goods like we have. Maybe there’s a way to bring the two together (brick and mortar and e-commerce) to keep us growing.”

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Breaking the Slump! By Marty Grosse

hen I was first promoted to a furniture store manager, I was more than a little wet behind the ears. I was 24 and confident I had all the answers. Roy Cochran, a 60-year-old furniture veteran, was the top salesperson in the store, and a top producer in a company of 21 stores. Imagine my dismay one busy Saturday afternoon when Roy came to me and announced he was going to take a break, smoke a cigarette, then come back and sell something. With smoke rolling off my ears I informed him how busy it was in the store and now was not the time for a break. Besides, I told him, smoking isn’t good for you! With a calm voice and many more years of wisdom, Roy told me he was in a “selling slump” and wasn’t able to close anyone today. “I will not be long,” he said. “And I promise when I come back I will make a sale.” Of course I knew about slumps. Baseball players, basketball players, golfers—all athletes, really—go through slumps. Growing up in downstate Illinois a Cubs fan, I knew all about baseball slumps. But this selling slump was something foreign to me. Now as I approach that golden and wise age of 60 I’ve seen many individual sales slumps including store sales slumps. Here’s what I’ve learned about slumps and ways you can avoid them. First, you should know selling slumps can be sneaky. They creep in without notice. They start slow, but before you know it, a selling slump mires an entire staff. It’s easy to allow a salesperson, yourself, your store, or group of stores off the hook. The excuse game is a prelude to the slump. These are common excuses we’ve all heard before. “The weather’s so nice, no one is interested in buying furniture today.” Or “We have the wrong merchandise in our store and what is selling is not in stock.” Then there’s always this favorite chestnut, “Advertising has been cut and store traffic is down.” Failure to take responsibility is the first step towards a selling slump. Sure you can have an off day at any given time.

MAY | 2016

However, allowing your team, your store, and even yourself to make and accept excuses is a start down the slippery slump slope. As a leader, you must listen to the supposed reasons, discern what might be legitimate, and adjust. More importantly don’t let anyone off the hook. If this sounds like tough love, you’re right. Sales management calls for a steady, but firm hand.

Sometimes selling is all between your ears In sports we often hear that it is mental or attitude. Selling is the same way. When you or your team show up with a poor attitude, results will be poor. Have you stopped having dynamic and positive sales meetings before the selling day begins? Are you holding the same old, same old meetings? You know what I’m talking about. The same person gets up and drones on and on about the same old issues. Freshen up your meeting schedule, change the meeting venue and provide new content. Put some fun back into your efforts. Sales games and contests provide new challenges and stimulation for your sales team. Make a strong effort to transition the sales team from personal to professional. You can’t control someone’s personal life but don’t let a personal slump at home determine a sales slump at work. Make sure your sales team is focused, fired up, and ready to sell. Never forget the importance of praise and encouragement.

Back to basics Slumping baseball players take extra batting practice. Basketball players shoot, shoot, and then shoot some more. Shift your efforts to focus and train your sales team on product knowledge. Get out on the floor and review the features and benefits of specific

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products with your salespeople. Let’s face it: Confidence of knowledge and enthusiasm by a salesperson go a long way with customers. Enthusiasm sells. Nothing breaks a slump like making a sale. Not sure what category to focus on? Study your merchandising reports and train on products that aren’t performing well. How’s your credit business? It is fact that customers who use financing buy more. Train your team on financing and how to better use it in the selling process. How are customers being greeted when they enter the store? “Can I help you?” isn’t an engaging or effective way to start a new relationship with a customer. You need to engage the customer, build a relationship. Selling is a distinct psychological process that every customer goes through. Stand back and watch your team members. Have they become lazy or lackadaisical on greeting, qualifying, presenting and closing customers? Start them role playing and get back to the basics of the selling process.

bring fresh ideas. Make these changes quietly or announce them with your intent. Regardless, find better combinations of players by balancing strengths and weaknesses. Do you have players who need to be traded or rotated? We owe it to our people to help them improve or grow. However, sometimes the best thing for all is to make a change. The real key to avoiding sales slumps is to help each salesperson recognize their lack of or declining productivity and how to adjust accordingly. Roy Cochran knew when he was slipping into a slump and had his own unique way of adjusting. Finishing the story, he took the break, smoked a cigarette, returned and made a sale. For more than 10 years I watched him use that approach and he continued as a top producer. Roy left this earth many years ago but left a lasting impression on me. He taught me many things about selling, retailing, and life. More importantly he taught me that I did not know everything at the ripe old age of 24.

Change player positions Is your sales staff broken into selling teams? Look at the dynamics of the teams you’ve put together and change their positions to try new combinations. Fresh relationships often

Marty Grosse has held executive positions at six furniture retailers. His website, Furniche.com provides furniture shoppers with relevant, timely advice . Email martygrosse@furniche.com to learn more.

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MAY | 2016

Furniture that adapts to your changing life As the U.S. population grows older or faces living with a disability, some furniture manufacturers are stepping in to meet this population’s lifestyle needs. By Ginny Gaylor

FACE LIFT David Olinde, manager of HFA member Olinde’s Furniture, says power lift beds from a decade ago looked like they came straight from a hospital. Today’s models are sleek and contemporary. Olinde is next to Mantua Contempo, one of his store’s best sellers.

MAY | 2016

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.S. Census figures for 2013, the most recent year available, show that 44.7 million Americans were over the age of 65. That figure represented 14 percent of the country’s entire population, and it’s expected to increase to around 20 percent by 2030. Additionally, the Census revealed that, in 2010, more than 56 million people reported living with some level of disability. Half that number indicated their disability was severe. Even taking into account that those two figures overlap to a degree, the numbers indicate that a significant portion of the U.S. population could benefit from furniture that enhances their lives or assists them with mobility.

Changing trends in seating and more In the last decade, HFA member Olinde’s Furniture & Mattress Superstores in Louisiana has seen a dramatic change to what manager David Olinde likes to call “lifestyle enhancing products.” Most obviously the biggest change is in increased selection. “Ten years ago, a power lift bed looked like it came straight out of the hospital,” says Olinde. “The ones they make now are sleek, contemporary and look like a regular bed.” Olinde also has seen significant changes in the seating options this category includes. “I don’t even recall a power recliner that wasn’t a lift chair 10 years ago. Now, power recliners account for over 50 percent of our sales in our motion department—and some of the items even have a power headrest. Lift chairs are pretty much the same as they were 10 years ago, but the industry has created console sofas that lift on each side.” Randy Coconis, HFA member and owner of Coconis Furniture in South Zanesville, Ohio, says both lift chairs or recliners and adjustable beds are important and growing categories for his store. A few years ago shoppers were lucky to find three or four styles of lift chairs in his store. “Today I think we show 12 styles on our floor,” Coconis says, adding that the increase in popularity of the category is due to the new sizes, technologies, and features manufacturers are offering. He has seen the same growth in the options for adjustable beds—where the store once offered only three options, today they have eight. For Coconis’ store, power reclining chairs represent more than 60 percent of his reclining furniture sales.

Meeting mobility needs and more What’s caused this change? Certainly older members of the U.S. population are looking for furniture that is not only comfortable for them, but also can assist with any agingrelated mobility issues they may have. But Olinde feels that the increase in interest and options goes beyond that. “Every age group wants to enjoy these products. Who doesn’t want a power recliner or an adjustable bed with massage?” Coconis agrees: “Adjustable beds are another category that has seen tremendous growth for us, and it’s not just the older or handicap customer asking for them. All ages are interested in the features.” One example of the expanded options available in this category comes from Cozzia. While the company’s entire line is centered on offering seating solutions that provide a positive health impact, its mobility seating especially is suited

EXPANDED SEATING A few years ago, HFA member Randy Coconis showed four lift chairs in his Ohio store. Today he shows 12 different models. to helping anyone who needs assistance getting in and out of a chair. Features such as an electric lift function and fully adjustable armrests allow for easier entry and exit from the chair. They even are equipped with air cell massage and heat, both of which are beneficial to blood circulation, as well as therapeutic overall. Certainly lifestyle enhancing products or accommodating furniture offerings such as lift chairs and lift beds are items many people may be aware of, even if they don’t know of the increased choices available now. Typically, older adults with mobility issues have been the ones using these kinds of furniture designs. But what about the 3.6 million Americans who are wheelchair users? Are there special furniture designs to meet their unique needs? The late Freemon Borkholder, company founder of Borkholder Furniture, was injured and wheelchair bound later in life. As a result of his personal need, he developed Borkholder Furniture’s Samantha Table. Most dining tables are not high enough to allow the arm rests on a wheelchair to fit under the table. Additionally, table legs or trestles can block space, creating another difficulty for someone who cannot bend their legs easily. Thomas Halvorsen, vice president of Borkholder Furniture, has seen a slow growing awareness in this product arena that didn't exist a few years ago. “We’ve had very satisfying responses to the table. A couple of retailers have focused on it and promoted that table with veterans’ groups in their area and have gotten a good response.” What Halvorsen is most proud of with the Samantha Table is that it doesn’t appear any different than any other dining room table. The table just offers added functionality through its floating top, which has a sliding feature that enables it to move as much as 18 inches to slide over wheelchair arms. Borkholder

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MAY | 2016

OPEN END Borkholder Furniture’s

Samantha dining room table can accommodate a wheelchair on one end.

Furniture offers another dining table design, the Settlers Table, with the same functionality. “We are very sensitive about putting a label on that product, it is more about the function and adaptability of the product,” Halvorsen says, adding that he thinks there is a growing awareness of how wounded individuals are treated and recognized that he feels is simply the “right thing.” Chris Newell, owner of Chris Furniture, Livonia, Michigan, has praise for Borkholder Furniture’s table design, both as a retailer and from her own personal experience. “The Samantha table is like a miracle for someone in a wheelchair,” she shares. Newell’s late husband was paralyzed for 33 years and it was difficult for him to join into group dinners at a traditional table while in his wheelchair. “The top of this table slides over the top of the wheel chair so the person is able to eat in a normal way with the group,” she explains. “It’s an uplifting item for someone who is already down and out.” Olinde feels the main challenges facing this market are for the manufacturers to come up with more state-of-the-art products to help address the needs of this older segment of the population while keeping the choices affordable.

Affordability is definitely a consideration for many consumers in need of these accommodating furniture items. Coconis explains that in the past there were Medicare programs to help customers with the cost of lift chairs and adjustable beds, if they had a doctor’s prescription. “That’s something that we don’t see anymore,” he says. “Maybe a program or coverage is still available, but we cannot seem to tap into it.” Finally, maybe the most important thing is simply to raise awareness that options are available for the elderly or handicapped with mobility needs. For instance, Borkholder Furniture’s two table designs have been in their line for years, but only recently have garnered significant attention. The need for these products is certainly there according to the U.S. Census figures, and it’s only expected to grow in the years to come. Ginny Gaylor is an awarding-winning writer and editor based in Greensboro, N.C. She has more than 15 years experience writing about the home furnishings industry, as well as many other topics. She can be reached at ginnygaylor@gmail.com.

Featured Manufacturers Borkholder Furniture | borkholderfurniture.com | 574.773.4083

Cozzia | cozziausa.com | 877.977.0656

Mantua Manufacturing Co. | bedframes.com | 440.232.8865

MAY | 2016

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2015 RN

KNOW

NOW Our industry always ad changing. 1/2 ispage The minute you think you know it all, that’s when you’re in trouble. Fortunately there’s RetailerNOW to keep you informed and on track. We’re the only association magazine dedicated to educating and inspiring retailers just like you to stay in the know. Subscribe now. Visit Retailernowmag.com.

INSPIRATION+EDUCATION

2015 RNOW ad campaign half page horiz.indd 48

6/18/2015 1:56:30 PM

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MAY | 2016

FAMILYMATTERS

Seeing into the Future of Your Family Business It doesn’t take a crystal ball. But it does take planning. Here’s how you get started. By Wayne Rivers

ike a fair number of our clients, one of our consultants is on the board of his country club. His club, as is the case with a great many around the country, has come face to face with the realities of the new normal economy, and how to serve the changing needs of a new generation of club members. His committee has been charged with defining (redefining?) who they are as a club and what they envision for the club over the next 25 years. In short, they’re developing a strategic plan for how to stay in business for another generation or two and for how to be as successful in the future as they have been in the past. The club is faced with plenty of challenges. The club has largely been run by older golf members who are very set in their ways and don’t like change. These older golf members are often financially comfortable. That means modest dues increases or assessments aren’t likely to trouble them all that much. The same increase to dues or assessments might not be received so well by younger members with growing families. Older members won’t be around forever, so clubs need to find ways to attract new members.

MAY | 2016

In today’s world where the nuclear family is often the focus, the time commitment to play golf (let alone be good at it) can be a huge barrier, one that frequently scares away many young families from joining and using club facilities as previous generations had done. Country clubs carry considerable legacy costs including golf courses, aging buildings and physical plants, meeting spaces, bars and restaurants, banquet facilities, etc. Many private clubs are afflicted with a form of schizophrenia and will need to decide their core missions going forward: Are we a golf club? Are we a tennis club? Maybe we should just focus on being a pool and swim club? What about a social club? Or maybe even a family and fitness club? Establishing a new vision and determining the solutions to these challenges will help the club define what its offerings to members and potential members will look like going forward.

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PASSING THE TORCH

(WITHOUT GETTING BURNED)

I’m thinking of retiring and want to sell the business to my daughter. Fatherly intuition tells me it could get sticky, and my wife doesn’t need that in her life right now. How do I keep this smooth and orderly on my end?

While we were discussing the challenges of country club management, we also blundered into the subject of church management. Our consultant said “if you don’t have young kids in your church, the church is one step away from the grave.” Bruce Stanley, president/CEO of the Methodist Home for Children, put it a different way: “60, 40, 20 is a dangerous predictor. If 60 percent of your people have been Christians for 40 years and part of that church for 20 years, change will be almost impossible to effect.” The discussions of challenges facing country clubs and churches brought me back to my favorite subject—family business. If setting a strategy for country club or a church is so challenging—and it is!—why is that any different from running and planning for the future of a family-owned home furnishings business? If a family business has older leaders who are

There are so many assumptions in this question that my head is spinning! “Thinking of retiring?” “Sell the business to my daughter?” “Fatherly intuition?” “Wife doesn’t need that?” Why is it that senior generation family members assume they have to devise A to Z plans and present them fully formed to the rest of the family business team? If you genuinely want to keep this smooth and orderly, you will involve your wife, daughter, other children (whether employed in the family firm or not), and your senior non-family employees in the discussion. The likelihood is they all have good brains, and they have opinions about what they’d like to see happen. If you ask them in a sincere way, they’ll be happy to share those opinions with you, and you’ll get some terrific ideas and angles about which you hadn’t thought. If you’re running a dictatorship, develop whatever plans you and your attorney like. If, on the other hand, you’re running a family business where you actually care about the thoughts and feelings of the other stakeholders, get them involved right away.

set in their ways and don’t like change and who are financially comfortable, if the family business has legacy costs in terms of aging buildings, physical assets, and people, and if the family business is afflicted by a form of schizophrenia in determining its mission for the future, how is that any different from your church or your country club? Are not the afflictions of a mature business populated by aging people crying out for the same kind of reflection and reinvention our consultant and his committee are putting into his club? A few years ago, a third-generation family business executive, we’ll call him Stan, called wondering how he and his cousins were going to be able to achieve the same kind of success their parents and grandparents had enjoyed. We talked for an hour or so, and we settled on a solution: The family business should undertake a vigorous round of strategic planning to define what

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continued on page 30 MAY | 2016

it stood for, its purpose and mission, and what business they were in so they could set goals and develop long-range plans. He was excited! His dad, again like many of our clients, was on the board of directors of the local bank and was jazzed about the recent successful strategic plan the board had put into place. Stan saw the parallel and thought it would resonate. It didn’t! Dad loved the strategic planning process and the plan the bank had developed, but saw no reason why the family business should do anything of the kind! He didn’t see the parallels at all! Stan was flabbergasted to say the least. If it makes sense to peer into the future and do long-range planning at your club, or church, or bank, doesn’t it make sense to do the very same on behalf of your family business? Doesn’t your business deserve the same tender loving care when it comes to redefining and reinventing itself to serve different customers and constituencies in a different future? Start by carving out some time—at least a half day per month in the beginning—to bring together family and key employees to talk about the future. It might sound nebulous and “touchy-feely,” but the first thing you’ll need to establish is your vision for what the family business should look like when you’re finished with it in 25 or 35 more years. What’s the purpose of your business? What parts of the business bring you the most joy? How are you uniquely able to serve your customers, and what makes you different from every other furniture retailer in town? What are you better at than the competition, and at what are they better than you? You don’t necessarily need a four-page agenda for starting these discussions; you just need to block out the one crucial ingredient that family business leaders never seem to have enough of: TIME. Get the conversation started, have someone in the group take notes to make sure you capture important information and revelations, and get back together regularly to build on what you’ve accomplished. Eventually you might want to bring in an outside facilitator to help you take your informal conversations to a higher level and build out the specific plans you’ll need to achieve the goals your team has envisioned. Wayne Rivers is president of The Family Business Institute. He has appeared on The Today Show, CNN, CNBC, and is an expert panelist for The Wall Street Journal. Email your questions to Wayne at wayne.rivers@familybusinessinstitute.com.

MAY | 2016

YOUR FIRST CHOICE FOR SECONDARY FINANCING

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NEXTGENPROFILE

MINUTES with Jordan Boyst

come from a background of sport and exercise psychology. I played almost every sport growing up and continued through college, where I won three team handball national championships at the University of North Carolina. So I guess getting my masters in a sport-related field seemed like the next logical step. I fell into the furniture industry by accident in 2010 when the former membership director was a training client; now I’m part of the HFA membership team making sure our members’ daily needs are met. My drive to succeed athletically has carried over to this job. That same passion I had for helping my teams win I now have for helping our retailers succeed and grow. I do my best to help with any questions or problems they may have so they can get back to doing what they do best…selling furniture. I’m still heavily involved in sports like soccer, rugby, and team handball.

What impact can Next Gen have on the industry? In the few years I’ve been involved with the HFA, I’ve noticed a distinct gap between the older and younger home furnishings professionals. Next Gen helps bridge that gap, not only for spurring the younger generation’s involvement, but for creating a common ground for the ideas of both generations to flourish.

Jordan Boyst

Membership Specialist Home Furnishings Association

Words to live by “If it doesn’t challenge you,

HOME FURNISHINGS

Photo credit: Heide Ecklund Newby

it doesn’t change you.”

5 Minutes is a monthly profile of a Next Generation Now member. Next Gen NOW is an HFA-hosted community of young industry professionals whose mission is to give voice to the needs and goals of the industry’s next wave of leaders. Connect with members at nextgenerationnow.net or Twitter @ngnow.

APRIL | 2016

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MAY | 2016

TAKE2

An old factory gets a new life (and new look) By Martin Roberts

hina Towne Furniture & Mattress didn’t always sell furniture and mattresses. Forty-six years ago, owner Jay Yennock’s father John bought the abandoned Iroquois China Company’s factory in Solvay, N.Y., for his kitchen cabinetry business. It wasn’t until 1999 when Jay Yennock turned the building into a full-fledged home furnishings store. When we started the design, China Towne’s entrance was in the corner in a little 1960s-era add-on, which obscured the strong design of the original warehouse building. The entrance forced customers to enter at a corner, meaning they had to zig-zag through each of the many warehouse buildings to reach the diagonally opposite corner. My first idea was to move the entrance more to the center, and to rebuild it to allow the customer flow to move straight through five buildings from front to back, creating a mall of retail stores—from mattresses to upholstery to bedrooms, and finally into the kids’ department. The new design is all about traffic flow. My new retail plan for China Towne ensures customers reach all departments of the store in the minimum number of steps. This allowed us to place the most frequently purchased items at the front of the store and create strong destination areas like kids and recliners in the back, thus drawing the customers through the entire shopping experience.

MAY | 2016

, the store China Towne o t , n ig s e d w re t of space With the ne square fee 0 . 0 nd ,5 a 2 xp e ra xt to gained an e attress department m enabling the

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g left of the buildin nd e r a f on the store. old entrance through the rip t g BEFORE: The in d in w h a long, shoppers wit

AFTER: The redesigned exterio r to China Towne Furniture & Mattress in Solvay, N.Y., has made the store a retail destination for shoppers, who onc e thought the store was a furniture outlet.

It wasn’t easy, but by making the changes to the store in phases, we were able to keep China Towne open during the entire conversion of the 60,000-square-foot space. Sales have continued to develop at an anticipated rate—especially in the expanded mattress department. We were also able salvage enough interior walls, providing each department with the number of walls they needed. China Towne’s offices were moved to the second floor freeing up precious retail space on the first floor. Stairs and access to a lower level were eliminated and sales operations were consolidated, all improving the customer retail experience. Despite all the changes, China Towne has gained about 2,500 square feet of retail space. The new storefront and exterior signage has created a retail destination that has increased credibility with consumers. The improved traffic flow has drawn many compliments from customers. Best of all, a store that was once perceived as a warehouse destination, is now seen as a valid retail consumer destination with great value and selection. Martin Roberts, a retail and design veteran, has more than 40 years of design projects to his credit around the world. His company, Martin Roberts Design, includes an award-winning team of retail consultants, architects and graphic designers. Roberts can be reached at martin@mrobertsdesign.com.

Recliners and kids’ furniture were move d to the back of the store, mean ing shoppers had to pass through all departments befo re reaching them.

ere salvaged interior walls w t. s’ ie or ct fa e Many of th y departmen splay for ever to help with di RetailerNOWmag.com

MAY | 2016

This is

or years, mattress sales represented a small sliver—roughly 10 to 12 percent—of many stores’ total sales. It’s an understatement to say things have changed. While that percentage slowly edged up over time, in recent years it has taken a dramatic increase with many companies approaching or even exceeding 25 percent of total sales in mattresses. What’s responsible for the growth? And just as important, what can you do to breathe the rarified air of top retailers raking in record sales and profits from this steamroller category? Let’s examine these issues and then I’ll offer suggestions for your consideration.

the year

your mattress sales jump By Gerry Morris

No more doing business as usual As a category, home furnishing stores’ market share had actually been stagnant or in decline for years due to many factors, most notably the explosion of competition. New categories of companies wanted to get a piece of the pie. Appliance stores, warehouse clubs, big box, and especially sleep specialty stores jumped into the market, giving consumers a multitude of shopping choices. An explosion of new manufacturers, especially in nontraditional products, has given consumers even more choices. During that time, complacency on the part of many home furnishing retailers was a significant factor. Mattresses were just one of many product categories. While profit margins had always been strong and sales steady, dollars were commensurate with the other goods so market share was relinquished to the new breed of competitors. All that is changing.

We’re not gonna take it It doesn’t take a marketing genius to realize that mattresses make dollars and sense. More and more home furnishings retailers are deciding not to relinquish any more market share. Conversely they’re

MAY | 2016

growing their overall business by making mattresses the engine that drives the train. Additionally, many have realized that they have some distinct advantages over these new competitors in growing their market share and have developed a “can-do attitude.” “We are not new to the mattress business. We can compete with the best of them. We have lots of products to drive traffic into our stores. We can add on mattresses to furniture sales and vice versa. Let’s do it!” Here are some things that have enabled home furnishings retailers to grow their mattress business.

Show me the money Retailers can’t deny the average ticket prices on mattress sales today is a huge factor in the growth of percentage to total, and, more importantly, in the desire to focus on mattress sales. More units at higher prices is a pretty attractive incentive. It wasn’t all that many years ago that the average queen set had no traction above the $1000 barrier. Just like the 4-minute mile, once it broke through, it was Katy bar the door. While mattresses

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don’t lend themselves to the dramatic innovation of many big-ticket consumer goods, our industry has done a great job creating new styles, categories, comfort materials, fabric choices, and an array of profitable ancillary products that increase average ticket prices. Beginning with memory foam mattresses, the alternative to inner springs got everyone’s attention. Thanks in large part to Tempurpedic, retail prices have gone through the roof. They floated all boats. Everyone knows that. Memory foam regenerated latex and inspired gel. Latex mattresses, while a desirable product, were marginalized because of price compared to innerspring mattresses, whose improved polyurethane foams are now on most floors. The addition of gels created buzz and the combining of all these great foam products with innersprings has created a whole new category of hybrids. But it’s adjustable beds that are taking average ticket prices through the roof now. Clunky cumbersome adjustable beds that used to be associated with hip surgery, are now just hip, having been replaced with sleek new models. Who would have ever thought millennials would buy ‘hospital beds,’ but they are. Just last week, I visited a small retailer who was consistently selling sets with adjustable bases for well over $3,000. Wow!

Awareness All these things have increased consumer awareness. Increased competition not only among retailers, but also among manufacturers, has further aroused consumer interest. The mattress business isn’t a zero-sum game. Increased awareness can actually increase the size of the pie. The amount of advertising in all its forms has exploded. Consumers can’t help but notice. This awareness has helped shorten the replacement cycle from around 10 years to roughly seven years. Couple that with the increase in population (from 282 million in 2000 to 324 million this year) and the numbers

start to add up. Correct me if I’m wrong, but I think most of these people sleep. They need something to sleep on, and that something seems to wear out and get replaced. It’s the old supply-and-demand thing.

Suggestions Focus and feature—Demonstrate that you’re in the business of selling mattresses. Feature mattresses prominently in your stores. Every shopper should become quickly aware that mattresses are an important category to consider.

Feature mattresses prominently and consistently in your advertising. The frequency of impressions has a cumulative effect on consumers, increasing the likelihood that they’ll visit your store when ready. It can also prompt their awareness of the condition of their mattress, increasing the possibility they’ll replace it sooner. Eeny meeny miny…uh oh—The problem with so many choices is that it can be overwhelming not only to shoppers, but your sales staff, too. Ironically, the more choices there are, the more likely staff will hone in on a few “best sellers” fabricated by limiting the models they show to the ones they had success in selling.

With too many choices, some consumers can’t decide, so they keep shopping at other stores. It’s called analysis paralysis. Knowing they didn’t even try the majority of models can leave them wondering what they missed. Consider offering fewer choices with more discernible differentiation. Even with a smaller selection, your sales staff must help narrow choices to around three models and have the shopper take the time to decide on one they prefer. The great untapped potential. —One distinct advantage home furnishing retailers have over other types of competitors is the daily traffic they draw for the variety of goods they sell.

It always seemed funny to me that many retailers spend lots of money trying to lure shoppers in to buy mattresses while neglecting those who are right under their noses walking their floors browsing and shopping for furniture and accessories. One of the best and most effective ways to grow your mattress business is to have every sales associate mention mattresses to every shopper. It’s the one category that makes sense to do so. It’s contagious.

Salespeople can present mattresses to more relaxed shoppers who aren’t on a value seeking mission and this helps their confidence when they do work with mattress shoppers. I’ve tried this myself. I once asked a shopper about her mattress. She tried out a few to see how comfortable they were. She ended up buying. I then discovered she’d already purchased a sofa and love seat and was on the way out the door. Curiosity killed the cat?—With nine lives at his disposal, he must have been a really curious cat. I’ve never heard of curiosity actually killing a cat, but I have seen it increase mattress sales. You’ve seen it too. What do you think was the biggest driver for the meteoric growth of air and memory foam products? It was (and is) curiosity.

People reluctant to lie down on traditional mattresses willingly seek out and dive on to these products in showroom windows just to see what they’re all about. It just makes sense to use it to your advantage. Curiosity is an emotion that compels action. It can change consumer motivation from needing to wanting to buy. We all understand how powerful that can be. If someone wants something badly enough you can try in vain to talk them out of it. Meow! Your salespeople should be inviting shoppers to try something new, different and, yes, exciting. There are so many new things to talk about; green mattresses, air mattresses, adjustable bases, new cool foams and gels, hybrids, new types of pillows, protectors, comfort, pressure point and sleep sensors, scents, sights and sounds. If you aren’t offering these products, you’re missing out. Want to increase your mattress sales to 25 percent or more? Make shopping for mattresses fun, interesting, and exciting for your shoppers and your sales crew, too! Imagine your customers telling all their friends to go to your store to buy a mattress. It can happen!

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Gerry Morris has more than 20 years of experience in the mattress industry. In partnership with The Furniture Training Co., he offers a premium online training course, “Sell More Mattresses with Gerry Morris.” To view the course, visit furnituretrainingcompany.com

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䰀䄀匀嘀䔀䜀䄀匀㨀䄀㠀㌀ MAY | 2016

MEMBERBENEFIT

Finding the Value in Long-Term Financing

Shoppers like the value and flexibility extended financing offers By Kaprice Crawford

hoppers looking to buy furniture are taking their time and doing their homework before making a purchase, including carefully researching value and financing. Consider some of the findings from Synchrony Financial and its 2015 Fourth Annual Major Purchase Consumer Study. The study reflects the experiences of shoppers making or planning to make a purchase of $500 or more: • Furniture shoppers surveyed conduct 85 days of research, on average, before making a purchase • 77 percent of those shoppers begin their research online, and 80 percent of those conduct in-store research • 39 percent of furniture shoppers also research financing options • 74 percent of Synchrony Financial furniture cardholders surveyed said they “always” seek promotional financing options when making a major purchase • 88 percent of furniture cardholders said they believe that promotional financing makes their large purchases even more affordable • Nearly half (46 percent) of furniture cardholders said they would have not made the purchase, or gone to another retailer who offers financing, if it had not been available These findings track closely with past major purchase studies, and underscore the value of financing for consumers considering large purchases such as furniture. This also aligns with other research conducted by Synchrony Financial that shows the value of specific types of promotions. Synchrony Financial’s analysis of retailer financing promotions indicate that offering a private label credit card issued by Synchrony Bank with longer-term financing (18 months and longer), in conjunction with a minimum purchase strategy, can have multiple benefits, including generating higher average purchases, incremental sales and increased credit applications. Offering longer-term financing also helps retailers stay competitive, since customers who are ready to buy may look for flexible options that help make their purchases more affordable. Forty-four percent of all HFA member sales through Synchrony Financial during 2015 were on 18-months or longer financing promotions.

MAY | 2016

Advertising longer-term financing promotions for a short period of time may also help attract new shoppers, build awareness among existing customers, and drive store traffic. Synchrony found that setting a minimum purchase price for the longer-term promotions can help increase average ticket price. Consumers drawn by promotions who don’t want to purchase the required minimum may still want to take advantage of shorter-term promotional financing options. Customers like the value and flexibility that financing over a longer term can offer. Some customers value deferred-interest promotions (no interest if paid in full within the promotional period) while others prefer having an equal-pay promotion with no interest to help with budgeting. For example, offering a 36-month term on a $3,500 purchase brings the equal monthly payment down to less than $100. Finally, it’s important to note that longer-term promotions typically cost more than shorter terms. When implementing a longer-term promotional strategy, it’s critical that retailers have an effective minimum purchase strategy in place to ensure the incremental revenue driven by a long term promotion covers the extra cost of that promotion. Through the Home Furnishings Association, Synchrony Financial offers a range of attractive financing options to help meet the needs of your customers so they can purchase the furnishings they need and desire for their home in a way that fits their budget. By offering options, furniture retailers can help ensure customers are able to plan their purchase and choose what’s right for them. For more information about HFA and Synchrony Financing please email our membership team at membership@NAHFA.org.

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Kaprice Crawford, the Home Furnishings Association's director of education, can help answer your questions about Synchrony financing and other HFA membership benefits. Call 800.422.3778.

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HFA@MARKET High Point Market HFA Highlights It was a busy High Point market for Home Furnishings Association members who took advantage of many of the HFA’s benefits from the Retailer Resource Center to the Lunch with Leaders program.

Retailers, vendors and media gather outside the HFA’s Retailer Resource Center on the first day of market to hear HFA president Jeff Child announce David and Joey Gunn, and Mike Wo as the Association’s Retailers of the Year award winners.

Synchrony’s Bill Theis, HFA CEO Sharron Bradley, Furniture/Today senior retail editor Clint Engle, HFA executive vice president Mary Frye and Storis president Don Surdoval meet outside the Buyer’s Lounge in the RRC.

MAY | 2016

HFA members David Gunn (left) and Dennis Novosel (center) and IMC’s Scott Eckman take part in a roundtable discussion with HPMA officials about ways to improve market for attendees.

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HFA@MARKET HFA member Eric Easter (far left) meets with Next Generation Now members (L to R) Cade Wheeler, Erin Donaghy, Jordan Boyst, Greg Strosnider, Ryan Lindsley, Shane Lalji, and Jacob Shevin at Klaussner’s showroom in High Point as part of the HFA’s Lunch with Leaders program.

Former Jerome’s president Lee Goodman (center), also took part in the HFA's Lunch with Leaders program with (L to R) Dana Helms, Lance Zeto, Goodman's wife Amy Kyle, and Robyn Malinovsky.

Clockwise from top left, HFA members Wendy Kolceski, Danielle Passage, Kaylin Krowicki, Erin Donaghy and Alicia Cobb of Dunk & Bright in Syracuse, N.Y, take a break from Sunday’s Next Gen Now beer crawl. More than two dozen NGN members visited five showrooms during the crawl.

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MAY | 2016

HFA@MARKET Jeff Fontain (left) of Spectrum Marketing meets with Sid Shenkan, president of Haneyâ&#x20AC;&#x2122;s Furniture, at the HFAâ&#x20AC;&#x2122;s RRC during High Point Market. Spectrum was one of three dozen vendors offering their wares and services to HFA retailers.

Industry guru Jerry Epperson drew a packed audience for his state-of-the-industry talk at the RRC. Afterwards, retailers lingered to get their pictures taken with the industry icon.

Like many vendors, Versatile's Kevin Lawrence, left, was busy throughout High Point market at the Retailer Recourse Center.

MAY | 2016

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GOVACTION

Double Trouble for Retailers: Your Role in Recalls

By Mary Martha McNamara and Neal Cohen

hairman Elliot Kaye of the Consumer Product Safety Commission (CPSC) recently said he wants the commission to aim for a $15-million-dollar civil penalty against a single company this year. The CPSC issued $12.2 million in cumulative civil penalties against multiple companies in 2014, more than double the fines it issued in 2013. This aggressive statement from Kaye positions the CPSC as a formidable enforcement agency. This merits your attention. The Chairman was referring to the provision in the Consumer Product Safety Act known as Section 15(b). This provision imposes a reporting obligation on manufacturers, distributors, and retailers of consumer products when they receive information that suggests, among other things, that the product is non-compliant

or could contain a defect that creates a risk of injury to consumers. Furniture retailers are required to report to CPSC and to cooperate with manufacturers who are conducting recalls. This article is intended to help ensure your company doesn’t become the target of a CPSC investigation that could result in a large civil penalty for violation of these twin duties.

Your Duty to Cooperate Congress has clearly signaled that it holds retailers and manufacturers equally responsible when it comes to product safety matters. Why? Because in the now global chain of commerce, retailers are most often the last link to the consumer. You’re the ones who hear the customer’s preferences, problems, and complaints. Retailers are expected to pass along that feedback, especially safety-related issues,

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to their manufacturers. If the manufacturer notifies you there will be a recall on a product it has sold you, then you’re obligated to disseminate that recall information to all your customers. Failure to pass along recall information could result in a charge of “negligent recall” under Section 23 of the CPSA or in a subsequent product liability suit if one of your customers is injured by the recalled product. To cooperate with a recall, you have to be prepared. • Designate a person as the recall czar and instruct staff to funnel recall information to that person. • Create an area in your warehouse to quarantine recalled products from inventory and from consumer returns. Instruct staff on the importance of tracking recalled products in quarantine so they don’t get mixed in

MAY | 2016

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with good inventory or “lost” in the transition. • Develop a system that lets you track which SKUs you’ve sold to which customers, even cash customers; this system should also be able to block sales of certain SKUs at the register. The more detail you can track, the stronger your system will be. It’s no longer sufficient to maintain paper files for such transactions; CPSC expects to find electronic files that can easily be tapped for a list of customers with affected products. When requested, promptly provide a list of affected customers with last known contact information to the manufacturer (most manufacturers are happy to execute a non-disclosure agreement with their retailers or use third-party mailing houses to insure the confidentiality of your customer list) or send the manufacturer’s CPSC-approved direct notification letter to all your customers. • Keep records of all the actions you take so you can demonstrate your cooperation with the recall. One of the best ways to do this is to have a written recall plan prepared in advance that can be quickly deployed in the event of a recall. Advanced planning will lead to a more effective solution for you and your customers. In addition to being ready, you also need great patience. Commission rules require manufacturers to notify distributors and retailers immediately to stop sale upon filing a report with the agency. You’ll be contacted by the manufacturer (or your sales rep) asking you to stop sale of a particular product. After that you won’t receive further details for months. That’s because the manufacturer has to have its proposed “fix” first approved by a CPSC engineer and has to have its draft communication materials, including its retailer notification letter and retailer poster, subsequently approved by the CPSC compliance officer. It’s not uncommon for these approvals to take several months now. The manufacturer is as frustrated by these delays as you are; but to date no one has found a way around

TEMPOE.com/RetailerNOW 42

MAY | 2016

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these obstacles. Also remember there are many reasons for a manufacturer to conduct a recall. A recall doesn’t always signal a “defect” or a “substantial product hazard” as those terms are defined. Many recalls may be for simple quality or reputational reasons. Be sure to remove any recalled items from the sales floor but don’t penalize a manufacturer by taking away any more floor space. Remember the company is also caught between “the rock and the hard place” of CPSC rules and practices and is doing its best to do the right thing. Once the recall has been publicly announced by the commission, you need to publicize the recall in any way you can. Place the recall poster in a prominent location in the store, such as by the entry way or at the point of sale. If you maintain a website, set up a recall tab for all of the notices you’ve received. Keep the recall notices on your website “forever”. Furniture has a very long useful life, so go back as far as you can to retrieve old recall notices. Use social media to give as much air time to recalls as to sales.

Your Duty to Report Besides cooperating with recalls, retailers have an obligation to report non-compliant/defective and/or unsafe products to the CPSC. Section 15(b) of the CPSA states that companies (manufacturers, importers, distributors, and retailers) must notify the CPSC within 24 hours of obtaining information that reasonably supports the conclusion that a product meets one of the following triggers: • Fails to meet a consumer product safety standard or banning regulation • Contains a defect which could create a substantial product hazard to consumers • Creates an unreasonable risk of serious injury or death • Fails to comply with a voluntary standard upon which the CPSC has relied under the CPSA As to the first and last triggers for a Section 15 report, Congress has made clear that compliance with all mandatory and some voluntary safety standards is a shared responsibility between manufac-

turers and retailers. Manufacturers are the ones required to test their products and issue a certification of compliance. Even though it is the manufacturer’s duty to furnish you with a copy of the certificate of compliance, retailers should always ask for the certificates of compliance when they place an order or receive a shipment in order to assure themselves that they only sell compliant products. Although it’s not required by statute, retailers should strongly consider maintaining these certificates of compliance in their own records to protect themselves. If you can’t obtain a certificate of compliance for a product and its underlying testing from your vendor, or, if what you are provided looks suspect, then return the product or cancel the order. If neither of those options are available to you, then you most likely will have a reporting obligation to the CPSC. The certificates of compliance are critical protection for retailers. This is especially true if you sell youth furniture as this product category is subject to a plethora of mandatory regulations. Therefore, retailers must educate themselves on the regulations and standards that apply to the home furnishing products they offer for sale. Section 19 of the CPSA prohibits the sale of noncompliant products so, in addition to a Section 15 reporting civil penalty, a violation of this provision also could result in a civil penalty of up to $15 million or five years of imprisonment for willful violations or both. With respect to the middle two triggers, in a majority of the cases it will be the manufacturer that reports such issues to the CPSC. Manufacturers tend to have more data to determine whether there is a “pattern of defect” or “an unreasonable risk of serious injury or death” with the product. However, retailers are not off the hook. Retailers with customer safety returns and information may very well have to comply with this requirement unless the retailer has “actual knowledge” that the CPSC has already been adequately informed by the manufacturer or someone else. So retailers must document consumer complaints, warranty returns,

and repair requests, particularly if there is an injury or a potential for injury. Then the retailer must notify the manufacturer immediately of such incident reports because the statute only provides 24 hours for a responsible party to make a report under Section 15(b). If the manufacturer fails to make a report, then the burden falls on the retailer to make a report, especially if there are multiple incident reports on the same product. The perennial subject of recall-effectiveness is once again a hot topic in Congress and at the CPSC. Historically the CPSC has been satisfied with the removal of recalled products from the chain of commerce. Thanks to consumer advocates, attention is now on ways to increase the removal of recalled products from the hands of consumers. Since retailers are the first line of contact, you can expect a lot more attention focused on retailers and the role you play in protecting consumers from unsafe or non-compliant products. Be aware of the risks posed by the Section 15(b) reporting obligation and the consequences of a failure to comply with this two-edged sword. For more information, visit CPSC.gov/retailer.

Mary Martha McNamara, partner at McNamara & L’Heureux, P.C., has represented manufacturers, distributors, and retailers in CPSC matters for more than 30 years; she can be reached at mmcnamara@mclh.com. Neal Cohen, principal at Neal Cohen Law LLC, is the former CPSC small business ombudsman; he’s also served in the CPSC Office of General Counsel and the Office of Compliance. Neal can be reached at Neal@NealCohenLaw.com, on Twitter @ NealCohenLaw, and at NealCohenLaw.com. No information contained in this article should be construed as “legal advice.” You should consult competent legal counsel before acting on any of the information in this article.

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g, n i s i t ver to d A bow puzzle tress e L r cto of the nd mat e H h e a Horic last piec urniture vel. the your f next le take s to the sale

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HFACOMMUNITY Knight Furniture, C.S. Wo & Sons named HFA’s top retailers On behalf of Michael Wo of C.S. Wo & Sons, Daphne Oliveros represents the retailer recognized by HFA president Jeff Child as the 2016 Retailer of the Year for stores with sales of more than $10 million.

The Home Furnishings Association named the owners of Hawaii-based C.S. Wo & Sons and Knight Furniture of Texas its 2016 Retailers of the Year, celebrating both stores’ outstanding customer service, leadership and commitment to their communities. David Gunn and his son Joey, who run Knight Furniture in Sherman, Texas, were recognized as the nation’s top retailers with a sales volume under $10 million. Knight is a 103-year-old full-line furniture and bedding store now in its fourth generation of family ownership. The Gunns operate two stores in north texas outside Dallas. C.S. Wo & Sons took home the title for businesses with a sales volume of $10 million or above. Michael Wo leads a group of five brothers who are third-generation family members running a business that started as a general merchandise store on Oahu. The family now owns a furniture conglomerate that includes C.S. Wo & Sons,

Joey Gunn, left, and David Gunn, center, meet with HFA president Jeff Child. The Gunn’s were named the HFA’s 2016 Retailers of the Year for stores with sales $10 million or less.

HomeWorld Furniture, SlumberWorld, Ashley HomeStore and Red Knot. The company also includes a C.S. Wo & Sons store in California. The winners were announced during last month’s High Point market at a brief ceremony outside the HFA’s Retailer Resource Center. HFA president Jeff Child said both winners “are showing other retailers how to thrive in the industry while at the same time giving back to their communities.” “We’re very proud of our 2016 winners,” said Child, president of RC Willey Home Furnishings in Utah. “They’ve

worked very hard to get where they are and deserve this recognition today.” More than two dozen HFA members in good standing were nominated by members of the home furnishings industry—fellow retailers, vendors, manufacturing representatives and others—based on their commitment to the industry and their communities, as well as the exemplary service they provide their customers in their stores. Both retailers will be celebrated at the 2016 Home Furnishings Networking conference this month in Long Beach, Calif.

Art Vann completes it’s purchase of Hillside Furniture; keeps Hillside name to contemporary store HFA member Art Van Furniture has reached a deal to buy fellow HFA member Hillside Contemporary Furniture, giving the Top 100 retailer a contemporary store brand in Southeast Michigan. 44

MAY | 2016

The Warren, Mich.-based Art Van purchased Hillside in March after months of negotiations. No purchase price was disclosed, but Art Van officials said the store will continue to be run using the RetailerNOWmag.com

Hillside name. “Hillside Furniture has been one of metro Detroit’s most respected names in contemporary home furnishings for many years,” said Art Van founder and chair-

HFACOMMUNITY

Winner in the category of over 10 million

Winner in the category of under 10 million

Congratulations! “It is a great honor to be awarded the HFA’s Retailer of the Year award. To be recognized by your peers as the best says a lot about your company. Congratulations to both our winners” —Jeff Child, HFA President, RC Willey CEO

HOME FURNISHINGS Recognizing excellence and outstanding achievements RetailerNOWmag.com

MAY | 2016

HFACOMMUNITY man Art Van Elslander. “This acquisition is a wonderful opportunity for us to serve new customers, and we’re honored to be entrusted with the brand (Hillside founder) Bruce (Selik) has worked so hard to build.” Art Van said it will hire all of Hillside’s associates, and said Selik’s son, Jeff Selik, will serve as general manager of the business. “Hillside has been my passion for the

last four decades, but it was time for a change as I decided to retire,” Bruce Selik said. “Our family took great care in identifying the right company to partner with for a successful future. We were drawn to Art Van Furniture largely because of its reputation as an iconic furniture retailer and corporate steward throughout the Midwest, and I am confident our customers are in the best hands. They will continue to find

the exclusive contemporary furniture in our store that they have been accustomed to throughout the years.” In unrelated news, Art Van announced it will build a two-level, 80,000-square-foot showroom in the Detroit suburb of Canton. Art Van officials say the store will be the company’s first built from the ground up since 2003. Construction is expected to begin this year with an anticipated opening in spring 2017.

Art Van Furniture’s acquisition of Hillside Furniture gives the chain a strong contemporary brand.

City Furniture re-opens 2 stores and Habitat for Humanity benefits HFA member City Furniture has donated $5,000 to several Habitat for Humanity affiliates. The financial gift is part of the chain’s celebration and reopening of redesigned showrooms in the South Florida town of Pembroke Pines and Wellington, Fla. City Furniture president Keith Koenig attended the opening of the chain’s Pembroke Pines store and presented a $2,500 check to ReStore, a home improvement thrift store in nearby Fort Lauderdale. City also opened its redesigned Ashley Furniture HomeStore at the Mall at Wellington Green and made a similar $2,500 donation to Habitat for Humanity of Palm Beach County. “Our team loves helping families create homes where they can thrive and fulfill their dreams,” Koenig said. “That goal drives the success of our stores, and through Habitat for Humanity, we can help hardworking families in need create the homes they envision.” City Furniture and Habitat for Humanity of Broward County are longtime 46

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City Furniture’s renovated Pembroke Pines store has a more contemporary look.

partners. In addition to financial contributions, City Furniture has donated furniture and its employees have worked on a Habitat home. City Furniture’s outdated Pembroke Pines showroom was completely renovated on the inside with dramatic energyefficient lighting, expanses of glass, new flooring, wall covering and sleek fixtures to reflect the chain’s—and South Florida’s— contemporary, Florida casual and RetailerNOWmag.com

traditional feel. In Wellington, City Furniture moved its Ashley HomeStore showroom to adjacent space within a mall to accommodate the mall’s addition of a movie theater. The store is the first in South Florida built to Ashley Furniture HomeStore’s new design standards and boutique feel. The top 100 company has 15 City Furniture and 11 Ashley Furniture HomeStore locations.

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HFACOMMUNITY Emerald expands its reach outdoors Signs deal with Merchandise Mart

Emerald’s deal with Merchandise Mart in Chicago will help the manufacturer display its outdoor line, including this Reims dining set.

Emerald Home Furnishings is making a huge commitment to its line of outdoor furniture. The full-line furniture manufacturer and HFA member will open its first showroom dedicated entirely to a new line of outdoor furniture this summer at Chicago’s Merchandise Mart.

Emerald Outdoor will debut its 5,500-square-foot permanent showroom in space 16-116 of the Merchandise Mart at the ICFA Preview Show in July with a comprehensive assortment of sling, woven, cast iron and wood furniture collections, fire pits, mixed media goods and fabrics from Sunbrella and other perfor-

mance fabric suppliers. David Beckmann, an HFA board member and president of Emerald, said committing to the Merchandise Mart and the casual furniture industry “is the next logical step for our outdoor furniture division. We have grown significantly in a short period of time, and our permanent showroom will assure our continued growth. I look forward to meeting new dealers in Chicago and showing them all we have to offer.” Conversely, signing Emerald to a longtime lease is a nice coup for The Mart. “Emerald Home Furnishings has been a fixture in the furniture industry since the early 1960s, and we’re excited it chose to open its first outdoor furnishings showroom in Chicago,” said Byron Morton, vice president, Vornado/The Mart. “Emerald realizes that Chicago is the place to reach the top casual specialty retailers in the U.S., and we are thrilled to welcome it to the Mart.”

Morris Furniture Co expands its Ohio footprint

What’s in a name? HFA member Morris Home Furnishings is about to find out. The store has announced plans to open two more showrooms in Columbus, Ohio that will operate under a new-tomarket brand: Morris Home. The new name is part of a branding by Dayton-based branding and retail design agency ChangeUp. “We are thrilled to bring our Morris 48

MAY | 2016

Home brand to the fastest growing market in Ohio,” Larry Klaben, president and CEO of Morris Furniture Company, said recently in a statement. Within the next year, Morris Furniture Co. will open a showroom by Easton Town Center and a second one near Polaris Fashion Place in Columbus. The 43,900-square-foot showroom near Easton Town Center is expected to open

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this summer. The second location will be built near Polaris, Columbus’ largest mall. Construction on that showroom will begin this summer with an anticipated opening of early next year. Morris started in 1947 in Dayton and operates Morris Home Furnishings stores in Dayton, Cincinnati and northern Kentucky, but to date has operated only Ashley HomeStores in Columbus. The two brands serve slightly different customers with different budgets, said Beth Korab, director of advertising. “We believe that Columbus is underserved in the furniture and mattress category,” Korab said. “It’s a growing metropolitan city with a lot of young professionals. We just think it’s a great market.” All of the stores include Better Sleep Shop mattress departments, which feature Sealy, Stearns & Foster and Tempur-Pedic products. Existing Dayton and Cincinnati Morris Home Furnishings showrooms will be rebranded and updated to mirror the new look and feel of the Columbus showrooms.

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HFACOMMUNITY HFA member Baer Furniture announces executive changes Baer’s Furniture has named Jerome Baer the Florida company’s new president and chief executive officer. The announcement came last month from Robert Baer, chairman of the board of the family-owned company. Robert Baer will continue on as chairman of the board while Allan Baer was moved from president to vice chairman of the board. The changes were first reported by Florida Today. In other company news, Ronald Baer became executive vice president and will also serve as chief operations officer. Cathy Baer Haubenstock, Laurance Baer and Ira Baer all assumed senior vice president positions with the company while Ira Baer remains the company’s chief financial officer. Robert Baer also announced the addition of two vice presidents of the company: Danielle Baer, manager of the company's Boca Raton, Fla., store and David Baer as operations manager; both

assumed their new titles last month. Jerome Baer, the new president, also said the company, which maintains 16 stores throughout Florida, wants to expand into the Jacksonville, Miami, Orlando and Tampa markets.

“Our strategy remains the same,” Jerome Baer said in a statement. “We will continue to offer exceptional value and great customer service on famous brand furniture throughout Florida.”

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In Pennsylvania, Wolf Furniture clears the air on the air: Store wants your business, not your vote. This election season, HFA member Doug Wolf wants to be perfectly clear: “We don’t want your vote. We just want your business.” Wolf says as much in a new television commercial he hopes will clear the air in Pennsylvania. Specifically, Wolf wants constituents to know he is the CEO of Wolf Furniture and is not related to Tom Wolf, the governor of Pennsylvania. Doug Wolf says some residents have associated the 114-year-old furniture retailer with Gov. Wolf since campaign

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season got underway. That’s when Wolf decided to set the record straight that his chain of stores has no political or family connection to Pennsylvania’s governor. “Some customers see this as positive, others do not,” said Doug Wolf. “All we want to do is provide quality home furnishings to all parties and anyone else who’s looking for terrific value and great service.” To view the commercial, go to http:// tinyurl.com/h5dkftq.

AHFA’S Furniture Foundation announces 2016 grants The Furniture Foundation, an education fund established by the American Home Furnishings Alliance, has awarded 2016 grants to Appalachian State University, in Boone, N.C., and Catawba Valley Community College Alexander Furniture Academy, in Taylorsville, N.C. The 2016 awards include $18,000 to ASU to continue the school’s scholarship program for furniture design students. The grant will fund six $3,000 scholarships for the 2016-2017 school year. ASU’s furniture design program is housed in the Department of Applied Design and provides students with a bachelor of science in industrial design focused on product development, creative problem-solving, environmental concerns and manufacturing requirements. Several past foundation scholarship recipients have gone on to work in product design and development within the furniture industry. The foundation also has awarded $7,500 to the new CVCC Alexander Furniture Academy. The academy is modeled after the highly successful

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CVCC Furniture Academy launched at the school’s main campus in Hickory last year. The industry-driven training program was designed by local furniture manufacturers to prepare students for sewing operator and upholstery craftsmen positions that are in high demand by the region’s largest employers. The CVCC Furniture Academy in Hickory trains about 30 workers every 6 to 9 months, while the Alexander County program will graduate about 30 students every six weeks. Tuition for the CVCC Alexander County training program is $250 per student per semester. The foundation grant allows scholarships to be awarded to 30 applicants to complete the training at no cost this year. The foundation was established in 1948 to support research and educational programs aimed at improving management, manufacturing and marketing within the home furnishings industry. Since 1990, the foundation has distributed more than $3.5 million in scholarships and grants.

Jerome’s, Los Angeles Angels agree to sponsorship deal at stadium

Jerome’s deal with the Angels includes furnishing a suite for the team’s 81 games.

The Los Angeles Angels of Anaheim have a new teammate: Jerome’s Furniture. The HFA member has signed a multiyear sponsorship deal with the Major League Baseball club, making San Diegobased chain the “Official Furniture store of Angels Baseball.” As part of the sponsorship, Jerome’s will host a new Jerome’s Furniture Lounge at Angels Stadium for the 2016 season. The deal includes several advertising elements, notably coveted-signage behind home plate, social media posts and more. In addition, Jerome’s will sponsor “Best Suite in the House,” a contest that offers fans the chance to watch an Angels game in a fully-furnished Jerome’s suite at Angel Stadium. Winners will receive tickets to the game, have access to VIP parking,

enjoy the game on sofa seating, and enjoy free food and beverages. Contestants can enter on iPads located in any Jerome’s store in the Los Angeles and San Diego area, including Jerome’s newest store, which opened this month in Fountain Valley, Calif. This Angels partnership marks the third professional sporting relationship for the retailer, which also has partnerships with the NBA’s Los Angeles Clippers and baseball’s San Diego Padres. “The Angles are proud to work with a Southern California-based company like Jerome’s Furniture and are looking forward to our fans experiencing Angels Baseball from the comfort of Jerome’s new luxury suite,” said Angels Chairman Dennis Kuhl.

Arthur Gallagher acquires Association Insurance Services Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, has acquired Association Insurance Services and has assumed management of a one-of-a-kind insurance program, developed in coordination with the Home Furnishings Association. AIS, acquired by Gallagher in October, has maintained a strong partnership with the HFA for more than a decade, and has been the exclusive broker for the HFA’s Business Insurance Program for years. “Our acquisition by Gallagher has allowed for the rapid expansion of the Home Furnishings Association (HFA) Business Insurance Program,” said Jim Saris, Area Vice President in Gallagher’s Retail Property-Casualty Division and former Principal of Association Insurance Services. “This expansion will greatly

enhance the program with new product offerings, risk management resources and preferred access to the insurance marketplace on behalf of HFA members.” The Business Insurance Program, the only one of its kind in the industry, gives HFA members a special group classification with the program’s carrier, The Hartford, which provides improved group rates and better coverage. On average, clients save upwards of 25 percent on policies, while also improving the quality of their coverage, according to Saris. Designed to protect against the specific exposures of the home furnishing industry, the HFA Business Insurance Program offers competitively priced plans for property & casualty, general liability, commercial auto, workers’ compensation, employment practices liability, umbrella and medical.

Do you have something for the HFA Community? Send your information and hi-res photos to Robert Bell, rbell@nahfa.org. RetailerNOWmag.com

MAY | 2016

Tip-over prevention is everyone’s business! Every two weeks, a child dies in the U.S. when furniture, an appliance, or a TV tips over on them, according to the U.S. Consumer Product Safety Commission. By working together, we can help reduce the risk and prevent tragedies involving our industry’s products.

Together, we can reduce the risk. MANUFACTURERS:

RETAILERS:

SALES REPS:

INTERIOR DESIGNERS:

Make sure the furniture you produce or import meets the ASTM Standard Safety Specification for Clothing Storage Units (F2057-14). This is an international, voluntary consensus standard for furniture stability developed by a broad group of stakeholders, including manufacturers, retailers, regulators and child safety advocates.

Make sure all products you sell meet the voluntary stability standard. Educate your customers on the importance of using the supplied tip restraints that come with all compliant products.

Make sure the lines you represent meet the voluntary stability standard. Help your retail customers understand the importance of the standard.

Find in-store resources at:

When working with clients who have small children, emphasize the importance of anchoring furniture, appliances and televisions. Don’t source products that fail to meet the voluntary stability standard.

ahfa.us/issues/ product-safety

anchorit.gov/ get-involved

Learn more at:

Learn more at: ahfa.us/issues/ product-safety 52

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Learn more at: anchorit.gov/get-involved

INDUSTRYCALENDAR 2016 International Contemporary Furniture Fair May 14-17 New York City, New York Icff.com

Home Furnishings Networking Conference May 22-24 Long Beach, California Thehfnc.com

Louisville Furniture Market May 25-26 Louisville, Kentucky Louisvillefurnituremarket.com

our dream?

Canadian Furniture Show

FOR ALL OF YOURS TO COME TRUE.

May 28-30 Toronto, Ontario, Canada Canadianfurnitureshow.com

Showtime

June 5-6 High Point, North Carolina Showtime-market.com

Visit Restonic.com or call 1-800-898-6075

HFA-hosted events are highlighted in red.

The Best Buy Seal and other licensed materials are registered certification marks and trademarks of Consumers Digest Communications, LLC, used under license. For award information, visit ConsumersDigest.com.

ADINDEX Amber Engine (877) 615-2121 amberengine.com amberengine @amberengine Page 51

High Point Market (336) 869-1000 highpointmarket.org HighPtMarket @hpmarketnews Page 3

Canadian Furniture Show (866) 468-4436 canadianfurnitureshow.com CanadianFurnitureShow @CdnFurnShow Page 15

Horich Hector Lebow (800) 878-8989 hhladv.com Page 43

Casual Market (312) 527-7915 casualmarket.com CasualMarket @CasualMarket Page 23 Connie Post (304) 736-7283 conniepost.com Page 21

Jofran jofran.com JofranInc Page 35 Las Vegas Market (888) 962-7469 lasvegasmarket.com wmclv @worldmarketctr Page 7

Myriad (800) 676-4243 myriadsoftware.com Myriad Inside Back Cover Northwest Furniture Xpress (828) 475-6377 nwfxpress.com Back Cover Nourison (201) 368-6900 nourison.com Nourison @nourison Page 27 ProfitSystems (800) 888-5565 profitsystems.com PROFITsystems @PROFITsystems Page 9

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Restonic (800) 898-6075 restonic.com RestonicBeds @RestonicBeds Page 53

TEMPOE 844-TODAY4U tempoe.com TEMPOEsocial @tempoe Page 42

STORIS (888) 4-STORIS storis.com STORIS.solutions @STORIS Page 5

Tidewater (800) 535-4087 x6553 tidewaterfinance.com Tidewater Finance Company @TidewaterMotor Page 30

Spectrum Marketing (603) 627-0042 spectrummarketing.com spectrummarketing @spectrummc Page 49

Truckskin (877) 866-7546 truckskin.com TruckSkin @TruckSkin Page 13

Surya (877) 275-7847 surya.com SuryaSocial @SuryaSocial Inside Cover

To advertise in RetailerNow, contact Lynn Orr at (916) 757-1160.

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NOWLIST A river runs through it Washington artist Gregory Klassen creates one-of-a-kind furniture, like the Oregon Walnut River Dining Table ($13,000), that uses glass to transform knots and live edges in wood into rivers and lakes.

Source: gregklassen.bigcartel.com

Amazing floor coverings

Building a better arc

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Source: http://tudelft.nl/en

Source: alexkeha.com

Artist Alexandra Kehayoglou uses scraps of leftover thread from her familyâ&#x20AC;&#x2122;s Buenos Aires carpet factory and a laborious hand-tufting process to create wool rugs that mimic lush landscapes.

A group of Dutch students completely reimagined the bicycle. In three months they designed and produced the fully functioning Arc Bicycle, which is made with a 3D printed, stainless steel frame.

First-class seat A genuine DC-9 Pratt & Whitney JT8D engine cowling was removed from the aircraft, stripped of paint, polished to a mirrored finish and converted into a sleek chair. Boeing includes a Certificate of Authenticity with this American-made artifact. You can get one for $8,500. Source: Boeingstore.com

MAY | 2016

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DISCOVER NOW

Looking for new buyers? Check us out. RetailerNOW is the only association print and digital media focused entirely on your target audience—retailers. Discover how reaching qualified decision makers—the CEOs, owners, buyers—versus just reaching, can grow your business. Advertise now. Call Lynn Orr at 916.757.1160.

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INSPIRATION+EDUCATION

MAY | 2016

THE WAY WE WERE T

hat's my dad (Jim Harkness) on the right and my uncle (George Harkness) in the top picture. I’m pretty sure that’s our first delivery truck. My grandfather started the business in 1920 as a carpet cleaning and weaving company. He’d ride the streetcar up and down the city looking for business. When he found a carpet to clean he’d roll it up and hop back on the streetcar. I'm guessing ork got a lot easier when we added the trucks. It’s amazing the sacrifices and risks a first generation takes in starting a business. I’m not sure we’d ever take those chances now, but my grandfather did. My father told me he wanted me to join the business, but only after I went to college and got a degree. When you think about the skill sets my grandfather, dad and now me brought to the company, I don’t think any of us could match the other in what they did well, but together they made us what we are today. Dave Harkness Owner, Harkness Furniture, Tacoma, Washington



Share your old photograph and memory by contacting Robert Bell at 916.757.1169 or rbell@nahfa.org

MAY | 2016

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