From Home Furnishing Business
Take 5: Steve Glucksman
Five years ago, Art Van Furniture plunged into the world of franchising, but the Midwestern retail heavyweight opted for an unconventional business model that exclusively sought out existing furniture store owners as potential franchisees.
Art Van’s management concluded that partnering with an existing independent furniture store that was willing to convert its business to the Art Van store model gave them the best chance to succeed, and after opening 16 franchisees since January 2012, the Michigan retailer is convinced it’s on the right track.
The effort is overseen by Steve Glucksman, senior vice president of strategic development. He recently discussed the franchise division’s success to date and its prospects for the future in an interview with Larry Thomas, senior business editor of Home Furnishings Business.
HOME FURNISHINGS BUSINESS: Why did you decide to embark on franchising, as opposed to an expansion of company-owned stores and distribution centers?
GLUCKSMAN: Franchising, and in particular a conversion strategy is the fastest way to reach communities and guests that are not currently served by Art Van Furniture. In essence, speed to market. Also, in the smaller markets we find the owner-operator model to be very effective and efficient due to the strong ties to the communities and the entrepreneurial spirit that they bring.
We feel that “partnering” with a local “independent” is great for the independent furniture retailer, great for the community and great for Art Van Furniture. A true win – win –win. It allows independent retailers to lower overhead costs by pulling inventory from Art Van's million plus -square-foot warehouse in Warren, Mich., rather than maintaining their own warehouses. Our partners also take advantage of our extensive sales education programs, our integrated three-tiered consumer finance program, buying power and marketing programs.
HFB: Of the 16 franchise locations that have opened (through August), has their performance met the expectations of both Art Van and the franchisee? Why or why not?
GLUCKSMAN: We can’t give you all the numbers, but we can say that each and every franchise has experienced double-digit sales and profit increases while increasing cash flow due to the elimination of their own warehouse. More importantly, our partners are happier because they don’t have to worry about merchandising, advertising and warehousing and can focus on taking care of their guests and sales associates, further fueling growth.
HFB: It looks like the initial group of franchisees primarily has been existing furniture store owners who converted to Art Van. As you expand the network, do you anticipate going outside this group of business owners?
GLUCKSMAN: Our number one focus is to work with existing furniture store owners on a conversion strategy. Art Van wants partner with independent furniture retailers because they know the business and they are already ingrained in the community. Typically, they share the same entrepreneurial philosophy and family values. They believe in taking care of the guest first, and everything else will come. We know that what we do simply adds value to an already good business and eliminates many of the frustrations and constraints an independent has.
HFB: Until recently, furniture store franchising and licensing has largely been single-brand stores from manufacturers such as La-Z-Boy, Bassett and Ashley. Why do you think Art Van will be successful as a retail brand and franchisor?
GLUCKSMAN: At the heart of it -- we are retailers, not manufacturers. We focus on sales and service, getting her (our guest) what she wants, when she wants it and at a value that works. We (Art Van and our Franchisees) are in the same boat and are aligned on what is important. We have the ability to source from any of the top brands ensuring we stay relevant when it comes to style, quality and value. A single-source store has only one manufacturer and must count on that “factory” to always get it right and whatever else drives them from a manufacturing point of view.
HFB: What are the advantages of becoming an Art Van franchise?
GLUCKSMAN: Founded in 1959, Art Van Furniture has not only survived but thrived in a very competitive market and industry. After nearly 60 years in business (and experience) we have built a powerful brand with strong leadership that has a proven track record of trust, value, style and community. We believe our partners are in business for themselves but not by themselves, our entire team is there for support.
Our experience, knowledge and drive for constant improvement should make us a company that an independent retailer would like to join. We further categorize our advantages into five areas:
Exceptional Supply Chain
1.4 million square feet of a fully stocked warehouse, which allows a franchisee to eliminate its warehouse and inventory dollars.
Best-in-Class in stock position.
Delivery to a Franchisee’s store when and where they want it.
Powerful Marketing and Marketing Support
52-week, high-impact marketing programs and plan.
All creative and materials – franchisee simply pays for media and Art Van takes care of the rest so all your marketing dollars hit the guest.
Digital marketing and digital development
Outstanding Buying Power
Buying power only a top 20 industry leader has.
A hands-on experienced buying team that travels the world looking for the hottest trends, styles and values to ensure a franchisee competes and wins in their market.
Superior Franchise Operational and Sales Support
1:8 Store Ratio for our field support team, the same as our corporate stores
Hands-on help through the conversion process, including store design and project management
Continued support and use of all our systems and knowledge
Education, training and staff development
Weekly Cadence Calls to ensure alignment, understanding and problem solving.
Peer-to-Peer performance group
Use of our 3-tier integrated consumer finance program
HFB: Do you anticipate expanding the network outside Art Van’s core trading area in the Midwest?
GLUCKSMAN: Today we are focused on franchising within 600 miles of our Warren, Mich., warehouse/distribution center. This allows us to bring the greatest value to our franchisees and ensures our supply chain delivers the value that our franchisees expect. When we open a second warehouse/distribution center we plan on following the same strategy.