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From Home Furnishing Business

Editors Letter: The New Face of Service

Furniture stores, along with the entire retail trade, are struggling to attract and retain employees. In April of last year, during the forced shutdown across the nation, furniture stores lost 38% of their employees. While many employees returned the following month, the industry has not returned to 2019 levels (97%). The graphic below represents the statistics.

These employee levels would be fine if it wasn’t for the fact that the industry grew 29.8% in Q1/2021 over the same quarter last year. Anecdotes abound about the lack of the delivery crews to deliver the product that finally arrived or the need to hire quality sales associates. These two components of the process — selling and delivering — are essential to a retailer’s success. Although employee search sites may produce applicants, the resulting interviewees who show up are the problem.

Obviously, a solution is increasing the hourly rate or guarantees for retail sales associates. In desperation, many retailers have gone this route. However, once an increase is done it can’t be recalled. A key performance indicator for retailers that has not been considered recently is wages as a percent of delivered sales. For every percentage point increase, it must be recouped with an increase in gross margin. It sounds simple, but with the jump in gross margin due to rising transportation cost, will the consumer accept the price increases?

Wages, as a percentage of sales delivered, range between 14.5% and 21.5%, dependent upon the retailer’s price point and the retail experience delivered. The graphic below presents the industry functional breakdown for the initial quarter of 2021 compared to same quarter last year. When comparing Q1/2021 to the same quarter last year (Q1/2020), the average retailer expenditure has been reduced by 2%, primarily due to higher volume (10.7%). As we move to the new normal, the traditional ratios will be hard to compare. But gradually, a new business model will emerge. And increased wages will be part of the new normal.

Cover Story: The Silver Lining: Reimagining Business

And we found new ways to stay in business. Industry leaders scrambled to find the best ways to reimagine their businesses as consumers were trying to navigate an economic downturn, with many families struggling to just get by. Civil unrest and the aftermath of the 2020 presidential election challenged everyone in different ways. If there is a silver lining to be found in the pandemic, it is that we learned we can change and innovate faster and more efficiently than we might have thought possible only a few months before.

The Forty Under 40 honorees you will meet here embody this silver lining: These men and women found new ways to conduct business and help their companies thrive during a time of global crisis. Individually and collectively, these young leaders proved their worth by navigating one of the greatest challenges our industry — and the world — has ever dealt with. These future leaders found strategic and creative solutions to the unique challenges faced by the home furnishings industry. In the post-pandemic economy, innovation and reinvention will be the keys to success.

The Forty Under 40 Class of 2021 is at the forefront of this new era, navigating the turbulent seas of change. There is an African proverb that states, “Smooth seas do not make good sailors.” This year’s Forty Under 40 are learning to sail these rough seas, and our industry will be all the better for it. 


MATT ANGLE, 37
Director of E-commerce and Digital Marketing,
Hooker Furnishings Corp.


As the director of E-commerce, Matt Angle is responsible for collaborating with crossfunctional partners to manage all pureplay E-commerce relationships at Hooker Furnishings. He also manages all digital marketing execution, including paid and earned digital media.

Angle works across multiple disciplines related to marketing technology and employs research and data to help drive the business. He has overseen substantial growth of the Hooker Furnishings E-commerce channel, and provides tremendous support to the marketing and business operations teams through his ability to use market research to identify target audiences and extract actionable data from a variety of sources. He is adept at building and executing comprehensive media buying strategies that optimize results and always produce strong return on investment. Angle is involved in many charitable causes. He is always the first person to stand up and offer to serve in any capacity. He possesses a deep sense of service and a humility that is endearing to all who know him.


EVI BRILLEMAN, 32
Vice President, Marketing & Business Development, Latexco U.S.

Evi Brilleman is a dynamic young professional with drive and passion for her work. She is a senior team member for latex and polyurethane foam manufacturer, Latexco and is responsible for all marketing strategy and implementation. She works closely with sales leadership in areas of innovation, product development, and research and testing, and is a member of the leadership team. Brilleman was an integral part of a digital integration project during the merger of two major textile companies. She also successfully implemented a digital strategy that has positioned the organization for future growth. Her ability to increase brand awareness through various initiatives has resulted in many new opportunities for the company. While living in Belgium, Brilleman cofounded a small organization for children with Down syndrome. She was a volunteer instructor for rhythmic gymnastics to young children ages eight through 18, and prepared them for national-level competition. She also volunteers her time to teach dance to children ages 12 to 16.


RENAE BROWN, 35
Vice President, Marketing Analytics, International Market Centers

As vice president of marketing analytics for International Market Centers (IMC), Renae Brown provides insight and offers recommendations to drive marketing strategy and decisions. Her data-driven approach provides IMC with a dashboard of key performance metrics to evaluate the effectiveness of marketing activities and investments. Brown blends data analysis with a personal touch that positively impacts every market participants’ experience.

Working with the marketing, digital, and IT departments, Brown has leveraged new technologies that allowed IMC to create a more personalized approach to marketing. She also oversaw the creation, implementation, and training of a more robust, unified customer relationship management (CRM) system. Her role has been expanded to include oversight of IMC’s registration, digital marketing, and its customer relations/inbound call center team. Brown is the committee chair of the advisory board for her sorority at Wake Forest University. Under her direction, the board received special recognition during their annual convention in 2019. She also serves as a representative on the parent teacher association (PTA) for her daughter’s school.

CASSIDY BRUNSTETER, 37
Director of Marketing, Buyer, and Interior Designer, Mister Robert Furniture

Cassidy Brunsteter has a strong passion for the history of Mister Robert Furniture and the furniture industry that propels it. She is a skilled marketer, buyer, and interior designer who also provides support for sales reps on product design and trends. During the height of the COVID-19 pandemic, Brunsteter quickly and efficiently responded to the unique business challenges the company was facing as a result of being forced to close. She used social media to connect with existing customers, gaining new customers in the process.

Brunsteter tirelessly works to increase brand awareness and always finds creative ways to increase foot traffic and sales for the store. Her efforts have helped achieve double-digit sales growth for the company. Brunsteter assists with historic revitalization efforts in the local community. She also coordinates design initatives for local churches. As a volunteer at preschools in her area, she donates her time to administer oversight for health issues related to the pandemic.


SCOTT CARR, 33
Marketing Director, Malouf Furniture First member

As marketing director at Malouf, Scott Carr coordinates the company’s merchandising strategy and ensures its product selection aligns with customers’ needs. He also works closely with the creative team to develop marketing assets for its retail partners. He has been essential to the ideation and execution of Malouf’s marketing initiatives across 16,000 U.S. retail store locations as well as the company’s social media platforms and Wholesale Resource Center.

When Malouf transitioned from a sleep accessories company to whole home solutions, Carr oversaw the development and launch of maloufhome.com. He worked to optimize the user experience and reimagined the look, feel, and features of the site with all new products. Carr volunteers for the Malouf Foundation and has contributed to its success over the years. He also is a volunteer guest lecturer and student mentor at Utah State University and Weber State University. Always willing to serve, recently Carr helped facilitate an online fundraiser for the Cache Community Food Pantry, raising nearly $30,000.

IKER DE LA SOTA, 37
President, Spring Air International Licensee/ Grand Rapids Bedding

Iker de la Sota is president of Grand Rapids Bedding, a luxury mattress manufacturer that is part of Spring Air’s licensing network. He started working for the company in 2010 as a truck loader and quickly progressed to plant manager. In 2014 he was promoted to vice president and was elevated to president in 2016. His primary responsibility is to oversee production operations to ensure all functions adhere to cost control, quality, and service expectations. de la Sota was handselected by the president of Spring Air from among the leadership teams of 10 different factories to participate in a corporate product development committee to help steer future products and direction. His successes, and those of his team, are a direct result of his work ethic, motivational abilities, and consistent leadership style.

As an immigrant from Spain, through hard work and determination de la Sota landed a position at Grand Rapids Bedding Co. and worked his way up the corporate ladder. As a way to give back, he developed a program within the local community designed to provide employment for individuals who otherwise may not have opportunities available to them.


AMETHYST EDMUNDS, 36
Visual Display Manager, Dunk and Bright Furniture
FMG Buying Group member
Impact Consulting Performance Group member

Amethyst Edmunds began her career with Dunk and Bright as an interior designer before being promoted to visual display manager. She oversees a team of three and creates inspiring vignettes for the showroom that help generate increased revenue. In her first year as manager, Edmunds reduced the amount of nonsaleable inventory by more than $300,000.

Through her efforts, the store is selling more higher-priced merchandise and has increased average tickets by more than 15%. She helped recruit and train more than 10 interior designers from her alma mater, Cazenovia College. Edmunds is an active member of her church as well as in her local community. She helped coordinate a local litter cleanup initiative designed to aesthetically improve the community. She also volunteers her time with local middle school students and participates in youth career day activities.


EVAN FALLER, 39
Director of Operations, Furniture Wizard Software

Evan Faller began working at Furniture Wizard in 2011 as a product demonstrator at trade shows and markets. 10 years later, he is the director of operations, responsible for the smooth operation of all aspects of the business, from product development to customer support to human resources. He understands intuitively that maintaining positive customer relationships is the lifeblood of the business.

He handles all issues with attention and empathy and resolves them quickly, in the best interest of both the business and the customers. When Marty Fischbein, founder of Furniture Wizard, passed away suddenly, Faller stepped in and became fully immersed in the operation to help execute Fischbein’s vision for the company and to help keep it moving into the future. Fuller sits on the board of directors for the Carion Area Chamber of Commerce and helps to promote tourism, community-based improvements, and events. He also is a senior member of the Civil Air Patrol, which he joined this year to help local youth gain access to skills, education, and professional development.


NANCY FIGUERAS, 38
Client Relations Manager, Storis, Inc.

Nancy Figueras is a dedicated member of the Storis management team. Not only was she an integral part of creating the Storis client relations department but she also strategically manages it to ensure the success of Storis’ customers. The client relations team communicates proactively with customers on an individual basis to provide assistance and advocate for their services and development needs.

During the pandemic, Figueras led her department in assisting clients as they navigated the need to virtually sell and deliver their goods. She spearheaded the research needed to navigate the disruptions in the supply chain that Storis customers depend upon. Figueras participates in the annual New Jersey Cares coat drive to secure coats for the homeless and group homes and also participates in collecting sleepwear for a local boy’s orphanage. Figueras also participates in an annual holiday toy collection for a school in Newark, New Jersey


MAGGIE FRANSEN, 31
Merchandising Manager, FurnitureDealer.net

Over the past eight years, Maggie Fransen has redefined many aspects of FurnitureDealer.net’s business. She started as a content strategist and quickly took on more responsibilities, which propelled her into her current role. As the sole merchandising manager, Fransen teaches retailers how to successfully merchandise their websites to increase sales and customer satisfaction. In 2018, Fransen created a tool called GroupTaggen to help clients display their product to create personalized resources for their customers.

Today she oversees the management and training of that tool. In an effort to be part of a group that empowers women to achieve their goals, Fransen participated in the YMCA Minneapolis Women’s Triathlon. She also co-leads the Leaders in Training program at Furni-tureDealer.net and is an active member and volunteer for WithIt, a not-for-profit dedicated to the women in the home furnishings industry.



MANDY GALVIN, 29
Content Strategist, FurnitureDealer.net

Mandy Galvin is an important part of FurnitureDealer.net’s leadership team and helps set the strategic direction for the company. She oversees a team of more than 10 employees and is responsible for creating furniture product presentations that drive business for the company’s retail clients. She has exhibited tremendous growth in her time with the company and leads the training and onboarding program for all new hires.

She helps the team develop a strong understanding of the industry, as well as consumer behaviors, to create informative shopper content that helps generate sales for retailers. Galvin is the co-leader of the company’s Leadership-inTraining program and the coorganizer of Furniture Dealer. net’s women empowerment group aimed at providing a platform to network with other female leaders to help navigate challenges. She is a giving member of her local community and looks for ways to help organize efforts that improve the community at large.


ERIC GRINDLEY, 38
Founder & CEO, Esquire Advertising 

Not only is Eric Grindley the founder and CEO of Esquire Advertising, he also is an attorney and an executive management consultant. He launched Esquire in 2012 to provide brick-and-mortar retailers with creative advertising solutions powered by enhanced market-analytics. In his role, Grindley consults with furniture retailers and national furniture buying groups to understand the industry’s unique challenges. He and his team developed a first-of-its-kind advertising dashboard that provides a comprehensive overview of the retailer’s individual ad operations and markets.

Using Esquire’s premier iDent Technology system, the dashboard tracks and displays a real time view of in-market consumers for their target areas with demographic breakdowns and ad performance metrics. Grindley is a volunteer coach for the North Carolina FC Youth League. He is also an active member and donor of Branch Ministries, a faithbased charity that fosters community development and education in Botswana, Africa.


GRANT HANCOCK, 33
Director of E-Commerce Merchandising, AVB Marketing

Grant Hancock is adept at aligning marketing strategies to deliver custom digital solutions to furniture businesses using innovative click-to-brick solutions. Having worked previously for a large regional retailer in California, Hancock learned all about the retail furniture industry and has transitioned seamlessly to the E-commerce space. He is responsible for the merchandising and product assortment for AVB Member websites and is a well-respected member of the team. Hancock is the technical lead who drives software data integrations to ensure the retailers’ website and point-of-sale software are in sync.

He leads a team of experts who develop unique solutions for AVB members that help them better merchandise their websites to increase sales. Keenly focused on the success of his clients, Hancock excels in creating solutions that focus on vendor needs, retailer concerns, and consumer conversions. Hancock is actively involved in the communities in which he lives and works and takes pride in helping others.


MEGAN HAUCK, 34
Corporate Visual Merchandising Manager, HOM Furniture

Megan Hauck began working at HOM Furniture in a parttime capacity when she was 17 as an assistant visual merchandiser and has been with HOM ever since. She has contributed greatly to their success, ensuring that all visual merchandising across HOM, Dock86, and Gabberts showrooms are styled as planned. As head designer and project manager, she is responsible for the company’s 17 showrooms across five states. Hauck helps train more than 25 visual merchandisers and often is the liaison for the buying and showroom teams. Her strong work ethic and can-do attitude creates an environment that enables the team to perform to their best.

Hauck has won many awards at HOM Furniture over the years, including employee of the year in 2019. Hauck has volunteered her time to work with and mentor students at the University of Minnesota’s College of Design. She also is actively involved in her children’s elementary school as well as her local church.


ELLEN HOOK, 35
Chief Operating Officer, Bruegge and Co. (dba Ashley HomeStores Central Illinois)

Ellen Hook is a fifth-generation member of this family owned store and the first female to lead the company. She exemplifies what the next generation of the business needs to help bring the 184-year-old company into 2021. Among her many accomplishments, Hook has helped open three stores within seven years and has created new marketing opportunities by partnering with local influencers and media outlets to help increase sales.

She is a member of Impact Consulting Services performance group, where she has gained valuable skills that have helped her develop tactical plans for profitable sales growth. A leader in her local community, Hook donates her time to work with female business owners. She is an avid supporter of the Ashley Home 2 Dream program and has donated more than 100 mattresses to local children in need. She also has donated furniture to families in her church community as a way to give back to those in need.


BRANDON HOWELL, 37
Head of Wholesale, Lull Mattress

As the newly appointed head of the wholesale division for mattress manufacturer Lull, Brandon Howell was hired after 10 years at Tempur-Sealy, where he was promoted four times and drove double-digit sales growth for two national accounts despite bankruptcy issues. Tasked with creating and scaling the wholesale division for Lull in January 2021, he is responsible for P&L management, establishing procedures, and managing accounts. He is a tenacious and creative problem-solver with superior leadership skills.

He not only navigates complex account management issues but collaborates to streamline workflow and create opportunities. His ability to cultivate relationships and build trust have allowed him to build momentum. Howell is a volunteer for the PanCan Network, which drives pancreatic cancer awareness and participated in PanCan Day in Washington, D.C., to lobby for funding for the cause. He also created an annual golf tournament to raise money for cancer research.


NICK JENSEN, 31
E-commerce Director, Maven Living

Nick Jensen is the director of E-commerce for Maven Living and manages a team of 20 account managers, content marketers, and operation specialists who focus their efforts on E-comm website channels. He helped grow this sector of the business threefold by implementing a strategy to develop more than 100 new product lines that allow retailers to increase profitability and employ their preferred retail strategies. In addition, Jensen helped launch several product lines on Wayfair EU.

Jensen has worked to identify best practices to form a strategic and flexible core business model and has built trust and confidence with category managers from major E-comm retailers. Jensen helps manage the partnership between Maven and Sleep in Heavenly Peace, a non-profit dedicated to building, assembling, and delivering bunk beds to children and families in need. He also volunteers with his church youth group to help students build life skills and has spent time completing service projects through a two-year service mission in Calgary, Canada.


DANIEL LEDO, 37
Vice President of Operations, Rosenthal Interiors

Daniel Ledo was hired during the pandemic to run all operations for Rosenthal Interiors. In the last six months, he implemented a new pointof-sale system at no cost to the store and has streamlined processes and implemented new technologies for appointments and mobile chat, creating a new trajectory to help the business flourish. The appointment strategy helped drive more serious buyers into the store, resulting in increased sales. During the temporary medical absence of the store owner, Ledo stepped in to run the business successfully.

He implemented COVID policies and procedures and helped lead the team confidently during a time of great uncertainty. As chairman of the board at Cempa Community Care in Chattanooga, Tenn., Ledo successfully led the organization through difficult times. He was a finalist in a competition for Latino Leader of the Year in Chattanooga in 2017 for his work with the Latino community. Ledo also is the founder of the Young Adult Ministry for the Episcopal Diocese of Southeast Florida.


TONY LEE, 37
General Manager, Lite Source, Inc

Tony Lee started his career with Lite Source when he was still in college. Over the years, he worked in various positions within the company giving him the ability to see the business from many angles. When he was named general manager, he reinvented the business model to move the company forward in the areas of purchasing product, streamlining operations, and renegotiating with vendors on merchandise selection and pricing, exceeding expectations along the way. He skillfully researches new vendor opportunities, meets with customers to enhance opportunities, and shows great leadership to the Lite Source team.

In the last five years, Lee has helped this 36-year-old brand change its trajectory to complement the changing business environment. Lee’s drive to succeed is remarkable as he balances work and his personal life. In an effort to help the community, he set up the donation of lighting products to Habitat for Humanity and the American Cancer Society. He designed a pink ribbon lamp to support breast cancer awareness, and ensures profits are donated to the American Cancer Society.


MEGAN PIERSON, 38
Senior Vice President of Business Development, Polywood

Megan Pierson is a frontrunner for outdoor furniture company Polywood. She began as administrative director in 2013, transitioned to the director of sales and marketing in 2014, was promoted to vice president of sales and marketing in 2015, and was elevated to her current position in 2017, becoming the first female member of the executive team. She works in tandem with sales and marketing to expand channels of distribution and identify new opportunities to generate sales.

As the founder of Polywood’s culture team, Pierson is a champion for improvements that have helped build a thriving corporate culture. As a mentor for the Young Entrepreneurs Program, Pierson mentors high school students who have a passion for entrepreneurship. Wanting to find a way to help victims of Hurricane Katrina, Pierson flew to New Orleans to help clean up and rebuild Musician’s Village, a place that provides homes for artists who have defined the city’s culture. For the last six years, she has served as a board member for the International Casual Furniture Association.


MATT PRIDEMORE, 39

Dealer, Badcock Home Furniture and More/W.S. Badcock Corp.

Matt Pridemore started his career with Badcock as a store manager in 2000. Today, he is the owner of nine Badcock stores, mostly in southern Georgia. Pridemore has become the “go-to” person when it involves “turning around a market” and has successfully grown each of the stores in the markets they serve. He is an early adopter when it comes to technology and knows how to leverage it to create a competitive advantage using it for an electronic ups system, sales training protocols, social media branding, and dealer roundtables.

Pridemore studied to become a licensed pilot and now flies his own twinengine plane. In 2018, during Hurricane Michael, he used his plane to fly supplies to areas in need. He also opened his store to residents to use for restrooms, phone charging, and other amenities. Pridemore also partners with local businesses in the Valdosta area, allowing them to piggyback on Badcock’s advertising programs to grow their own businesses.


BRIAN RIVERA, 38

Plant Manager, Pleasant Mattress

A six sigma certified leader, Brian Rivera runs the manufacturing plant for Pleasant Mattress in Fresno, Calif. He joined the company in 2019 as assistant plant manager and played a key role in ensuring that all products meet Pleasant Mattress’ quality standards. His leadership skills and passion for growth led to his promotion to his current position in 2020. He has helped sustain the tremendous growth the company is experiencing in the boxed-bed and privatelabel categories.

He has worked hard to minimize the impact of recent foam and lumber supply chain challenges and has kept projects steadily moving forward despite challenges in the industry. Rivera volunteers with the local Boys & Girls Club, where he oversees a team of approximately 30 people. He helps provide new experiences and skills, and acts as a role model to the youth in the community. He also has helped train young members of the community who are interested in boxing at a local boxing club.

TONY ROBERTS, 32
Director of Sales, Maven

As director of sales, Tony Roberts manages some of the company’s top accounts. He researches market trends, develops competitive pricing strategies, coordinates marketing materials, and oversees the logistics of product delivery and in-store product placement to develop unique opportunities to help his customers grow. His efforts over the years have resulted in significant increases in company revenue. Roberts helped develop a successful sleepshop pilot program in select Walmart stores where customers could test Maven mattresses and other products in-store and then place orders online.

He also helped execute one of Maven’s most successful Black Friday sales in Walmart stores, creating a discounted mattress topper and pillow bundle that sold out online within minutes of going live. Through Roberts’ efforts, Maven recently was recognized with Walmart’s Supplier of the Year award for the Home category. Roberts volunteers as a basketball coach for youth ages 10 through 13. He served a twoyear service mission in Lima, Peru, where he also assisted with humanitarian relief efforts after an earthquake. He also completed a service project to help increase awareness of the importance of organ donation.


JESSICA SALISBURY, 39
CEO and Creative Director, Village Green Home and Garden

Jessica Salisbury is referred to as a “superwoman” in the outdoor furnishings industry. She began working for retailer Village Green Home and Garden at the age of 16 and was mentored by then-owner Larry Smith, who nurtured her progression through the management hierarchy. In 2016, when Smith retired, he turned the business operations over to Salisbury and watched it blossom.

When Smith passed away in 2020, there naturally was a void, but Salisbury was, and still is, committed to continuing his legacy. Under her leadership, Village Green Home and Garden was named as the Apollo Award recipient for outstanding retail performance by the International Casual Furniture Association (ICFA). Salisbury has always participated in and volunteers her time for the ICFA. She also is an animal lover and hosted an in-store pet photo session with Santa during the 2020 holiday season to help raise funds for the Progressive Animal Welfare Society (PAWS).


SARA SAMIEIAN, 39
Co-CEO, Moe’s Home Collection

Sara Samieian is the co-CEO at family owned Moe’s Home Collection. She is a strong leader and entrepreneur who worked her way up through the ranks of the company. Samieian is a good communicator who collaborates well with the team to help them achieve their individual goals while keeping big picture business goals in mind. She is well liked by the staff and supports the team in ways that allow them to be successful. Samieian is decisive and adapts proactively.

She is a good negotiator, has a strong business acumen, and is committed to growing the company. Samieian is civic-minded and was instrumental in donating $75,000 to various charities across the lower mainland of Vancouver in 2020. She also participated in furnishing several shelters and hospitals in the Vancouver area over the last five years. She worked personally with the hospital to select and set up all the furniture herself, much of it done in kind or at cost.

ASHLEY SCHLITZ, 36
Director of Furniture and Fulfillment, Furniture & ApplianceMart, Boston FAM Impact Consulting Performance Group member

Ashley Schlitz has worked for Boston FAM since 2004. She quickly rose through the ranks to her current position where she is responsible for leading the furniture purchasing, merchandising and pricing team for a network of 15 stores. She also oversees fulfillment at Boston FAM. When the pandemic started in early 2020 Schlitz reinvented the way her team approached their work to adapt to the rapidly changing environment and to respond to consumer demand.

She also managed the furniture pricing strategies to ensure the company stayed profitable, while offering unmatched value in the marketplace. Schlitz has helped shape the philanthropic efforts of Boston FAM. As part of the Hope to Dream program Schlitz ensured Boston FAM could donate a minimum of 400 mattresses to children in the community.

 

IMAN SCHROCK, 36
National Sales Manager, Abbyson

A 15-year veteran of the furniture industry, Iman Schrock strives to improve his work by continuously staying ahead of trends and understanding the marketplace. He is responsible for developing sales strategies and managing the sales team to achieve sales goals, targets, and revenue. He works closely with the executive team to build both the E-commerce and retail sales teams to the best of their potential.

His work ethic and commitment to excellence have impacted significantly Abbysons’ growth and their position as one of the top furniture manufacturers in the industry. Through his hard work and dedication, he has helped generate more than $500 million in annual revenue. Schrock is a longtime supporter and child ambassador for World Vision, a Christian humanitarian organization that helps children, families, and their communities overcome poverty and injustice. He also is a board member for the American Academy of Project Management.


JACOB SIZEMORE, 33
Marketing Director, Big Sandy Superstore FMG Buying Group member

Jacob Sizemore has been working for Big Sandy Superstore for more than 12 years. He started in the sales department and moved into a store management role, where he became the youngest general manager in the history of the store. As marketing director, he has played a pivotal role in increasing sales while increasing marketing cost efficiencies by more than 30%. Sizemore introduced Facebook Marketplace to the sales team, which resulted in millions of dollars in incremental sales on an annual basis.

He also helped develop and oversee training efforts to help onboard more than 50 new sales associates each year. Sizemore has developed relationships with groups, such as The Neighborhood, which seeks to provide resources to school children in need. He also oversees the company’s Homes of Hope for the Holidays initiative, where the company furnishes 25 homes during the Christmas holiday for worthy recipients. He launched Help for Heroes as a way to give free lift chairs and adjustable beds to veterans for the July 4th holiday.


NATHANIEL SMATHERS, 35
Director, Customer Digital Marketing, MicroD

As the director of customer digital marketing, Nate Smathers leads a team of digital marketing specialists and account managers to drive customer success through MicroD’s products and services. He develops and manages key performance indicators for digital marketing channels to drive optimization and performance for their customers and contributes to the ongoing digital marketing strategy roadmap.

Smathers is the recipient of the Search Engine Land Award for the best overall search initiative and for demonstrating excellence in executing organic and paid search marketing campaigns and research initiatives. Smathers donates his time and has raised money for the American Cancer Society, Second Harvest Food Bank, and the Cystic Fibrosis Foundation.

 


ADAM SMITH, 34
Store Manager, Turner’s Fine Furniture (Valdosta) Impact Consulting Performance Group member

After working in nine of 11 Turner’s Fine Furniture stores and serving as a store manager for the two highest-grossing locations, Adam Smith now is the store manager for the newly expanded Turner’s Fine Furniture Store of Valdosta. As store manager, his primary responsibilities are to maintain daily operations, manage the budget, lead the sales staff, and enhance the experience and satisfaction rates for the store’s customers.

He achieved recognition for the top performing store in 2020 for exceeding sales goals and increasing sales performance over the previous year despite reduced business hours due to the pandemic. Smith is an active member of the Park Avenue United Methodist Church of Valdosta and a volunteer with the music, youth, and outreach ministries. He also is a member of the Valdosta High Booster Club and is involved with the Feed the Cats initiative, which raises money to develop and deliver a championship-building nutritional program for the Valdosta Wildcat Football Program.


KEVIN SMITH, 31
National Director of Furniture Sales, Crypton

As director of national furniture sales, Kevin Smith leads the formation and management of a national sales team concentrating on furniture manufacturers. His role also includes establishing and maintaining Crypton’s leadership position as a performance brand supplier to top 100 and big box retailers. During his time with Crypton, Smith changed the face of their rapidly expanding furniture business. Smith was instrumental in helping to expand Crypton’s presence in High Point from 50 showrooms to more than 85.

Smith is active with Caring Services, which helps with the recovery and rehabilitation of local teens struggling with addiction. He also has mentored a young man from his local community for the last four years to help guide him through a difficult family situation and a challenging economic time. With Smith’s support, his mentee earned his GED and is now thriving in a job that Smith facilitated with a local furniture manufacturer.


MEGAN STREBA, 37
Director of Marketing, A.R.T. Furniture

Megan Streba has evolved with A.R.T. through several phases of growth. Her primary responsibility is to lead and own the brand strategy while maintaining brand assets. She is specifically responsible for the strategic and creative direction of the brand while leading the development and implementation of marketing, advertising, communications, and promotional activities. She strategically collaborates with the executive and operations teams to develop and manage marketing budgets and show project return on investment.

She always looks for ways to advance with technology while ensuring her budget is adhered to — and even optimized — to save the company money. Among her many achievements, Streba successfully organized and ran the Markor grand opening and launched the Bobby Berk + A.R.T furniture collection. In addition, she has effectively converted A.R.T.’s traditional photography archive to 70% 3D modeling. Streba actively supports the March of Dimes and donates her time to help organize special events at her children’s school.


BO STUMP, 30
Stump & Company, Partner

Bo Stump joined Stump & Company a little more than a year and a half ago. Immediately, he made a difference and helped advance the business and improve all aspects of the merger and acquisition process within the furniture industry. Since starting with the company, Stump has taken a lead role in the development of customer relationship management and IT systems integration to better manage the firm’s day-to-day operations. He overhauled the new business pipeline process and enhanced the customer service aspects of the business.

The work he has accomplished within the IT department to set the team up for remote work and to be able to manage all data and information, especially during the COVID-19 pandemic, proved to be a critical tool for the successful navigation of the company through the pandemic. Stump is an active member of his local church and a Young Alum ambassador for his high school alma mater. He is an active Rams Club member at the University of North Carolina at Chapel Hill, where he received both his bachelor of science and master of business administration degrees.

PATRICK TROY, 35
Executive Vice President, The Ultimate Umbrella Company Incorporated (TUUCI)

Patrick Troy joined TUUCI in 2011 as an account manager. Shortly thereafter he became director of sales, and in 2015 was promoted to vice president of sales for the residential supply channel. In 2020, Troy was elevated to executive vice president, where he is responsible for overseeing the in-house sales department. During his 10 years with TUCCI, he helped build an outstanding team, including some of the company’s top sales performers.

Troy often is considered an extension to his dealers’ sales teams due to the efforts he puts forth to contribute to their success. He strategically works with clients to identify where they are now and how to turn short-term goals into long-term successes. As a member of the International Casual Furniture Association (ICFA) board of directors for the past five years, Troy served on the executive committee in 2019. He has served as the chair of ICFA’s philanthropy committee and led the affiliation of ICFA’s charitable interests with the City of Hope in Duarte, Calif.


SYDNEY VIGOTOV, 32
National Sales Trainer, Stressless

Sydney Vigotov is an award-winning sales training professional. She is known among her colleagues as a tireless and enthusiastic team player. In her new role at Stressless, she trains sales representatives and the company’s network of 700+ stores’ retail sales associates to provide knowledge and expertise to sell the Stressless brand story. She is the liaison with the Stressless Norwegian corporate product development team to ascertain the most current product information.

Vigotov launched and managed a Retail Training Reporting System that captures on-site product feedback, in-store imagery, trending finishes, and more. She has successfully developed new methods of training using out-of-the-box technologies, including a touchless training attendancelogging platform using a QR code and certificate of completion autoresponder. Vigotov is active in industry organizations and volunteer mentorship programs for both students and design industry professionals. In 2020, she was honored as the youngest recipient of the WithIt Education WOW Award, which is presented to an individual who has developed programs and put forth significant effort to educate associates, retailers, and consumers about the home furnishings industry.


CARLY WEINER, 38
Vice President, Elements International Group, LLC

Carly Weiner is a vice president at Elements International and is responsible for operations, including warehouse operations, customer service, logistics, the spare parts team, and customs compliance. She has worked for Elements since 2005, when she started in an administrative capacity. Today, thanks in large part to her work, the company has a far-reaching global logistics operation. She oversees a supply chain anchored with shipments from factory partners in Asia, Canada, and Mexico, supported by domestic and international warehouses, and production facilities in Mississippi and Texas. Her work in logistics and warehousing is highly regarded as a significant key to Elements’ success.

Weiner solves problems quickly and with long-term business continuity in mind. She has built a corporate culture that makes employees feel the type of camaraderie that fosters high-performing teams. Weiner supports several charitable organizations and actively gives of her time and resources to help make people’s lives better. She leads Elements’ adopt-a-family program, which supports local families in need during the holidays.


NIKI WEBER, 39
Chief Brand Officer, Pleasant Mattress

Driven by a holistic knowledge of all things brand, Niki Weber is responsible for managing Pleasant Mattresses’ brand of products across all departments and audience segments. She is a skilled product developer and marketer who understands consumer insights and analyzes the industry’s competitive landscape to transfer this knowledge into actionable brand strategies. Weber helped launch a Spring-Air branded line of bedding priced at less than $1,200, giving smaller dealers a nationally branded line that meets the needs of consumers in the market for value-priced mattresses.

She also developed a house mattress brand at higher price points designed around the concept of understated luxury that appeals to young consumers who want high-quality, handcrafted beds made with natural materials. A lover of nature, Weber donates her spare time to a California wildlife nonprofit that builds natural habitat gardens full of fragrant native plants that turn into ecosystems full of birds and butterflies for the community to enjoy.


MORRIS YEH, 32
Director of Product Development, Coaster Company of America

Morris Yeh began his career at Coaster at an early age, while still attending college. Upon graduation he was hired full time. Having already obtained extensive knowledge and training overseas and being fluent in Mandarin, he quickly adapted to the import distribution model for which Coaster is recognized. As a member of the product development team, Yeh quickly developed his skills for sourcing and negotiating costs and terms, which are integral to Coaster’s supply chain.

A frequent overseas traveler, Yeh plays a major role in the development and importation of furniture in the motion, youth, and home office categories. He is responsible for researching and incorporating power options, such as Bluetooth and lighting technology, into furniture designs. He collaborates frequently with the sales, marketing, and merchandising teams to ensure the best product fit for Coaster’s brickand-mortar retail and E-commerce partners. Yeh is involved with activities that support the City of Hope. He also is passionate about humanitarian causes that help developing countries.


EVAN YORK, 38
Vice President of Operations, Bedgear

Evan York started working with Bedgear in 2015 as a process performance engineer at the company’s South Carolina manufacturing facility. Two years later, he was promoted to engineering manager, where he began to identify ways that the company’s machinery could be uniquely designed to better fit Bedgear’s needs. He designed a proprietary piece of equipment that significantly increased production for Bedgear’s pillow products and was awarded a U.S. patent under his name.

In 2017, York was promoted to director of manufacturing operations for the South Carolina facility and was elevated to his current position in 2020, where he leads the manufacturing, distribution, logistics, engineering, and other departments. During the pandemic, York helped lead a project through Bedgear’s 501(c)3 foundation to donate KN95 masks and performance pillows to Mid-Atlantic Emergency Medical Associates (MEMA), to be used by frontline healthcare workers. He also participates in Bedgear’s Impact Day, when employees give back to the community via a variety of projects. York is active with Put on the B.R.A.K.E.S., a non-profit whose mission is to educate teenage drivers about the importance of responsible driving. He is the co-founder of SHIP’D, a company that converts unused shipping containers into tiny homes for short-term rentals.


FAWAD ZAVARY, 39
Vice President, Exclusive Furniture Furniture First member Impact Consulting Performance Group member

Fawad Zavary followed in his father’s footsteps into the furniture business and wears many hats as vice president of Exclusive Furniture. He works closely with the general manager as well as district and regional managers to achieve goals, while mentoring members of the sales staff to help them grow into management roles. He trains warehouse staff and encourages the team to expand their knowledge in all areas of the business to advance their careers while supporting the company’s mission. He has helped grow Exclusive Furniture from a onestore location to eight locations and counting in the Houston, Texas, market.

Zavary donates his time to Habitat for Humanity to help improve homes and neighborhoods in the Houston area. He also donated furniture to more than 100 local families after the devastation of Hurricane Harvey and has donated funds to help provide healthy lunch meals to children in the Houston area who are less fortunate and whose families have difficulty making ends meet.

STEVEN ALLEGREZZA, 36
Managing Director, International Home Furnishings Representative Association (IHFRA)

The last time Steven Allegrezza was recognized as a Forty Under 40 honoree was four years ago, when he was involved with merchandising and new business development at IHFRA. Today, as managing director, he manages and operates the IHFRA physical and virtual office. Although it has been a challenging year for the association, Allegrezza has been a strong leader and developed tools and provided resources members needed but did not have access to previously.

He created and developed digital strategies, including enhancements to the website, offering webinars, training benefits, and more, and is credited with increasing IHFRA’s membership roster by 20%. Allegreza is a calm yet effective problem-solver and critical thinker who led the association through the pandemic by being flexible and communicating clearly. Allegrezza is well liked in and out of the office. He has a compassionate heart and is involved with several volunteer initiatives, including teaching Sunday school and coaching a youth hockey team.


MARK HOLMES, 39
CEO, Cozzia USA

Mark Holmes continues to direct the operational aspects of Cozzia USA, just as he did when he was honored as part of the Forty Under Forty Class of 2016 five years ago. Today, he is leading the company to the next level of success. He sets the bar for Cozzia and has watched the company continue to flourish as a leader of health and wellness seating in the furniture industry. He has led the company to the next level of success through his focus on the online segment of the business and has grown the company’s Internet presence with four branded direct-to-consumer sites.

Homes has a passion for product development and works closely with the design team to create and develop some of the best-selling massage chairs in the furniture industry. In the early months of 2020, when the pandemic was beginning to take hold in the United States, Mark reached out to the company factory in China and created a strategic plan to quickly produce millions of pieces of personal protective equipment (PPE) for first responders and others at many facilities, including Stanford Medical Center, children’s hospitals, and other locations.

What Sells: Calm Sanctuary

Based on the FurnitureCore Industry Model developed by Impact Consulting Services, parent company to Home Furnishings Business, research shows the category has increased steadily over the past three years, finishing 2020 with $19.63 billion in sales and up from $18.04 billion in 2019. Not surprisingly, bedroom sales for the first quarter of 2021 jumped 31.3% above the same quarter in 2020, as the quarantine period of the pandemic began that March. Although behind the total industry growth of 9.3% from 2020 Q4 to 2021 Q1, the bedroom category did increase by 3.8%.

As you may guess, when polled on which bedroom furniture piece attracted the consumer most during their shopping experience, the bed topped out at 63.79%, followed by the dresser at 16.21%, the nightstand at 3.79%, the chest at 3.44%, and the armoire at 2.38%; 10.4% reported ‘other.’ The surge in furniture buying has not diminished the consumer’s need for value and functionality. Value combined with customization has led to success for Marge Carson. Offering choices in fabrics and leather for the headboard, with nightstands available to coordinate, has made their Palo Alto Contemporary Bed a top seller. “The bed combines a value price point with design details like wood trim and a plinth base that a local [dressmaker upholstery shop] wouldn’t be able to offer, making it unique in the marketplace,” said Jim LaBarge, CEO of Marge Carson. Many retailers and manufacturers are finding success with modern, scaleddown pieces, incorporating sleeker designs while also providing maximum storage. According to Jeff Schwall, national sales manager for Porter Design, their best-selling Urban Bedroom Collection “was created to address the increasing trend for small space living. The storage case pieces are intentionally reduced in scale to provide maximum storage while being able to easily fit into a smaller room. Our select mixture of solid sheesham hardwood allows us to deliver a modern, clean finish. And finished interior, solid wood drawers gracefully slide on side-guided roller ball bearing glides for ease of operation. Our bestselling Urban Collection features timeless styling for today’s modern home.”

Sam Moore’s Cardinal Bed Part of the Nest Theory Collection, the Cardinal Bed features a shelter-style headboard with vertical channeled details and is customizable with hundreds of fabrics. Suggested retail price is $2,499.

Combining modern style with sustainability has also proven successful for Greenington and their city-scaled Park Avenue bedroom crafted with solid bamboo. “Park Avenue’s sophisticated look has quickly become a top performer for our dealers. The consumer wants beautiful modern designs that have origins rooted solidly in sustainability,” said Troy Lerew, vice president of sales for Greenington.

Although contemporary furniture has grown in popularity, traditional bedroom furniture is still the most popular style, according to data from Impact Consulting, parent company of Home Furnishings Business. When asked the primary style of furniture in their bedroom, 39.23% of consumers surveyed said traditional, followed by contemporary at 25.87%, country/ rustic at 6.97%, country/European at 5.55%, transitional at 5.16%, Mission/Shaker at 4.26%, and cottage at 2.97%. Now more than ever, consumers value options when creating their perfect bedroom retreat.

Statistically Speaking: Post-Pandemic Furniture Industry Prices Surge

Furniture Prices Play Catch Up Most furniture and home furnishings industry products have been in a price slump since the mid-2000s as imports exploded into the United States. During the pandemic, furniture and bedding prices started to climb noticeably in the second half of last year as the economy began to partially reopen and really took off during the first and second quarters of this year. Table A shows the quarterly price index averages 2020 Q1 to 2021 Q2 (April/May). The price shifts discussed here refer to two overlapping periods, not directly tied to quarters. The first compares the CPI at the end of December 2019 vs. the CPI in May of this year, which measures where we were a couple of months before the pandemic to where we are now with the recovery. The second data point focus is on the first five months of 2021 comparing the CPI at the end of December last year to May of this year.

Since the start of 2020 through May of this year, furniture and bedding prices are up 7.7%, weathering the pandemic downturn in 2020. Most of that growth has occurred during the first five months through May, where prices have jumped 5.4% compared to December last year (Table A).

As many consumers upgraded their outdoor spaces during the quarantine, prices of outdoor furniture began to climb right away (Table A). As of May, the “other furniture category,” of which outdoor is a large part, has grown 14.7% since the beginning of 2020 prior to the pandemic, with most of that growth coming throughout 2020. For the first five months of this year compared to last December, the category is up 4.9%.

Living room, kitchen, and dining room furniture prices have also shown major growth this year, up 7.8% since the start of the year through May. Since the start of 2020 pre-pandemic to May, prices are up 10%. Prices for bedroom furniture, however, have lagged other categories, increasing only 1.7% since the start of last year through May (Table A).

Meanwhile, prices for major appliances, in short supply with consumers on hot home buying and renovation spending sprees, have skyrocketed above all furniture categories, growing 21.8% since the start of last year, with most of that growth occurring last year. Since the start of the year, major appliance prices are up 4.4% through May (Table A).

Consumer prices in other home furnishings products fluctuated during the pandemic, with many declining substantially before increasing (Table B). Rising slightly in 2020 Q3 to an index of 100.2, floor covering prices have only recently exceeded prices from January of last year. Prices are up 3.2% for floor coverings since the beginning of this year through May. Since the start of last year (just prior to the pandemic) to May 2021, clocks, lamps, and decorator item prices have grown 2.8% and nonelectric cookware and tableware have grown 5%. Television prices are up 2.1% in total since the start of last year after falling rapidly during all of 2020. After declining significantly, the first five months of 2021 have seen television prices increase 7.4%. Prices are yet to fully recover for dishes and flatware, up 0.6%, and window coverings, down 1.4%, since the start of 2020 through May of this year (Table B).

Not surprisingly, the price of outdoor equipment and supplies rose sharply during the second half of 2020, increasing 4.5% since the start of the pandemic through May of this year. Prices of tools, hardware, and supplies have grown steadily since late last year — up overall 5.8% since the start of January 2020 (Table C). Rising prices in the furniture industry can’t be attributed to wholesale import prices. Prices for most furniture categories and major appliance imports fell during the first half of 2020 and are slow to recover. Only two categories, nonupholstered furniture and institutional furniture/ kitchen cabinets, have just reached prepandemic prices in May. Upholstered furniture, office furniture, and appliance prices are still slightly below the beginning of 2020.

Historical Growth in Consumer Prices The early to mid-2000s were considered steady and stable growth years for the furniture and home furnishing industries and provide a healthy benchmark for analyzing price growth. Since that time, the industry has weathered a recession and now a pandemic. Overall, the CAGR (compound annual growth rate) has steadily increased each year for most consumer items since 2005 (Tables E, F and Figure 1). Since 2005, price increases over time have been staggering in some of the key areas, such as healthcare, with household furnishings and operations noticeably different with only a 2.2% increase since 2005 (Table E).

In the broad furniture and home furnishings product categories and other miscellaneous items, such as apparel, sporting goods, and computers, prices have historically decreased since 2005, many significantly (Table F). Furniture and bedding prices overall have declined 6.4%. Major appliances are up slightly at 2.1%. Other home furnishings items such as window coverings, decorative accessories, dishes and cookware have seen price declines since 2005, between -27.6% and -57.1%. Televisions prices have fallen 94.8% and computers prices are down 73.3% (Table F).

Looking at the historical indexed growth in prices of the key consumer products and services featured in Table G, only household furnishings and operations remained flat throughout time. Prices of new cars and trucks have also increased very slowly. As shown in Table H, the consumer price indexes for food at home (groceries) as well as food away from home (take-out and restaurant dining) have historically continued to climb. Annual growth rates approach 2% for food at home and 3% for food away from home (Figure 1). Both saw prices increase more than 3% during the pandemic. Consumer prices for furniture generally declined from about 2006 to 2015 and have yet to catch up to those levels (Table I) despite the recent surge during the pandemic. Since 2017, all categories have increased prices, with major appliances growing 4.6% from 2019 to 2020 and another 8.2% monthly average this year to May 2021 (Figure 1). As shown in Table J, the home furnishings category has not seen the same surge in prices as furniture and major appliances since the pandemic began. With the exception of floor coverings, at a CPI of 111.6 in May of 2021, all the other home furnishings categories are still well below 2005 prices.

The graphical contrast in the growth in the prices of televisions compared to cable and satellite television services is shown in Table K. As technology has made televisions better and more affordable, prices fell almost 100% since 2005 (down 94.8%) compared to the cost of cable services increase of 50.7%. The trajectory of annual price increases since 2005 for key consumer items and services is shown in Figure 1. This table shows the compound annual growth rate for selected time periods. Although furniture and appliances have lagged behind historically, they have shown some of the best growth of all product areas this year through May. As the world continues to adapt to the ongoing economic results of the pandemic, price increases in the furniture industry are starting to become the new reality.

EDITOR’S NOTE Is it the Eye of the Storm?

However, compared to the same quarter last year, the growth is even higher at 35.3%. Alongside the tsunami of sales was a significant increase in net operating income (13.19%) in quarter four and it appears that the first quarter of 2021 will be even higher. This month’s feature article discusses the factors that are driving the windfall. In my biweekly performance group calls (anticipating a return to in-person meetings by the end of the year) there are two camps.

The first camp’s belief is to enjoy the sunshine. The consumer demand may continue: driven by housing, interest rates, and consumer confidence. If not, we can address it then. The second camp is significantly less confident. The takeaway is to maximize performance now, but be aware.

The most important statistic is understanding your breakeven point. The table below calculates that statistic for top-quarter performers — more than $100 million in revenue. Enjoy the sunshine, move forward with confidence, and, to quote a performance group member:

Cover Story: Business as Unusual STRATEGY Has the Business Model for the Traditional Furniture Retailer Changed Permanently?

Without a doubt, when consumers escaped the shelter-in-place orders and the furniture industry escaped the “nonessential” classification, business boomed, with written sales surging and backlogs increasing. While experiencing the typical backlog buildup in the first months of 2020, retailers’ shipments increased as written sales decreased, and by the end of March and during April written sales plummeted. Beginning in May, traditional retailers began to cope with the shutdown environment alongside manufacturers coping with the pandemic impact on the supply channels.

According to Smith Leonard’s Furniture Insights, shipments declined 6% in 2020 with backlogs up 168% from year-end 2019. Obviously, furniture demand went somewhere during this time and the answer was other distribution channels. We estimate that e-commerce gained 3% to 5% market share followed by the home improvement channels (Home Depot/Lowes) and value retailers (Big Lots/ Target). Will traditional retailers regain this share?

That is a topic for future articles. So, if the substantial net income was not driven by volume, what was the contributor? In summary, the industry’s performance was driven by increased gross margin and reduction in expenses. But most important was the sheer determination of this entrepreneurial sector of the furniture industry. Owners returned to the daily details of the business. Discovering what was important took center stage while driving business in this unusual environment. The financial performance for the 2020 pandemic year is shown in Figure 1.

It was necessary to present the results by quarter to reflect the tumultuous year — a year that began normally and appeared to be on the road to a good year, only to fall into a chasm in the second quarter. The upturn was just as dramatic as the decline, as consumers rushed to satisfy pent-up demand and traditional retailers adjusted by incorporating sales by appointments generated from website leads. Retailers used their reserves along with government stimulus to maintain staff until the critical decision to allow the return of business in May and June. Soon, inventory was depleted and the next challenge facing the industry was a lack of product and transportation cost. While these significant shifts were challenging, the results to the bottom line has been rewarding, as seen from the key performance indicators shown in Figure 2.

Controlling prices while absorbing rising price/transportation costs became a daily challenge of repricing the floor. Gross profit increased by 0.8% for the year and almost 2% by the fourth quarter. We believe, and most would agree, that the strategy to increase gross profit was the result of attempting to stay ahead of the very necessary price increases from vendors and the unbelievable container prices, moving from $3,500 per container to north of $10,000 per container.

However, the price increases instilled confidence that the competition was not looking to discount as a strategy. Compared to other consumer products, the consumer price index in 2020 increased only slightly (from 113.2 to 114.5), while all products and housing continued to soar, as seen in Graphic D.

A major question moving into 2021 is, “Will these price increases and the resulting margin increases hold?” In comparison to other consumer products, furniture can endure a price increase. The gross profit increase contributed only 30% to the increase in 2020 net income. Depicted in Graphic E, one obvious contributor was the reduction in sales expense.

Sales expense reduction was reduced by more than a point (1.70%) by the end of the year. However, during the volatile third quarter, sales expense dropped two points from the disastrous second quarter. Sales expense began to trend up in the fourth quarter, primarily driven by handling expense. Advertising decreased 1.63% in 2020 from 2019, but was down substantially in Q3/Q4 by almost two points. While traffic fell considerably with the onslaught of the pandemic, it returned to normal levels by the second and third quarter without significant advertising. Traditional retailers began experimenting with digital advertising, as consumers have embraced the internet to begin their shopping process. Unfortunately, this change resulted in a loss of market share to the e-commerce channel, which did not have to comply with non-essential retail directives.

Handling expense (warehouse/ delivery/service) declined slightly (from 7.09% to 6.88%), primarily driven by the lack of product for handling. However, the lack of personnel at the current salary levels may dictate an increase in this cost element moving forward.

Selling expense for retail sales associates declined in the latter part of the year, partially driven by the loss of staff from commissions left unpaid because of backlogs. This delay in commission is forcing retailers to consider paying on written sales instead of the more common delivered sales. We would anticipate that this cost element will increase in the coming year.

The next area of cost is general and administrative. Stable for the year after experiencing a significant increase in the first part of 2020, this cost area fell in Q3 with rent concessions and staff reductions, but Q4 brought a leveling off. We expect general and administrative to return to historic levels. The table/graphic illustrates the breakdown. The other impact of these cost ratios is the fluctuation in volumes by quarter reflecting a volume variance in that the majority of these cost elements are fixed. No government subsidies (PPP loans) were included in these expense elements, but were shown as other income until forgiven.

Credit expense has remained the same during the pandemic year, as seen in the table/ graphic, and, interestingly, the stimulus funds did not impact the credit-driven consumer. As important as expense elements are the above the line revenue elements. Other than merchandise sales, as seen in the table/graphic, protection sales and delivery income remained constant from 2019 to 2020. The results were historical net income levels, as seen in Graphic K.

The major concern is if this level of performance be maintained. As backlogs are diminished, will the demand continue? Without a doubt, the consumer has become more focused on the home. However, as the nation puts the pandemic in the rearview mirror, other discretionary expenditures will take center stage. Additionally, forced expenditure reductions, such as dining out and kids’ sports, will reclaim its share of the family budget. Expenditures for advertising will increase to reclaim consumer interest fueled by promotions resulting in the decline of gross margin.

With all these expected trends, there is a hidden issue of market share loss to other distribution channels. While most retailers’ sales increased significantly in the third and fourth quarter of 2020, they lost three to five points of market share. Answer this question: Could your store have sustained a sales decline of 3% to 5% before the pandemic? That is the hidden crack in our future. 

Know When to Hold Them, Know When to Fold Them

For the last three quarters business has been great, increasing 13.9% in Q4 over the same quarter in 2019. While the pace declined in subsequent quarters, it was still a very profitable time for traditional furniture retailers.

However, prior to the pandemic, many single-market retailers were concerned about the future of the independent furniture retailer based upon the expansion of the large regional chains and the erosion of market share to the retailers such as Wayfair.

While the aftermath of the pandemic shutdown did create a tsunami of purchasing, concern was still present, with the Bureau of Labor Statistics projecting a loss of 16% of furniture stores in the next five years — a pace exceeded only by clothing stores and electronic stores. Many asked the question: Is it time to fold them?

One retailer that made that decision was Wilcox Furniture, a fixture in the Corpus Christi, Texas, market for 68 years. The company, led by George Moore for the past 30 years, decided, along with other stockholders, it was time to take advantage of the consumer demand and liquidate. With the assistance of Wahlquist Management, the liquidation sale began and two months of sales was generated in eight days.

The icing on the cake was when the sale of the real estate (four stores) was accomplished with a targeted email and buyers were secured. What was good for the stockholders was also good for the employees, in that the purchaser was another established retailer, Beale Furniture, out of Houston. The transition will occur by Memorial Day.

While George Moore will miss the furniture industry, it was the right time for everyone. The independent furniture retail channel will continue in Corpus Christi — a positive for the citizens.

What Sells: Evolution of Motion

As manufacturers keep finding new ways to balance these desires, the motion/recliner category continues to increase its share of upholstery. Whether it’s a recliner with all the bells and whistles — massage and heating, wifi connectivity, food trays, and even a six-pack cooler in the armrest — or a motion sofa that looks stationary, there is something for everyone.

When creating a motion piece that is both relaxed and refined, manufacturers must be careful not to sacrifice the comfort of traditional recliners. As Anthony Teague, SVP of merchandising for Jackson/Catnapper, points out when describing the company’s best-selling Calvin sofa, “We often talk about the ascension of the motion sofa from the basement to the living room, and the Calvin epitomizes the meaning of that statement. The secret to the more ‘stationary-looking’ motion Catnapper has successfully launched across the country is the fact that the category is still anchored around comfort. So many attempts at making reclining sofas that don’t look like ‘motion’ have failed because they are not giving the consumer the one thing they expect from motion — a great seating experience.”

Balancing comfort with the style of stationary has also led to success for Nice Link Home Furnishings. According to President Jay Carlson, “Our leather power motion and recliner are top sellers because they both provide comfort and convenience in a fashionable, high-leg stationary design.”

According to a FurnitureCore, Inc., survey developed by Impact Consulting Services, parent company to Home Furnishings Business, 57.7% of consumers surveyed felt that the style of reclining furniture was an inhibitor to their purchase in the category. In the same study, consumers were asked to pick the top four items they have now or would want to have in their next reclining product.

The results were heat/massage at 58.41%, followed by automated adjustable headrest and lumbar supports at 58.10%, storage drawer at 49.21%, hidden tabletop at 45.08%, docking station for telephone at 31.75%, built-in remote at 28.25%, built-in beverage cooler at 27.62%, and surround sound system at 26.98%.

While upholstery, as a percent of total furniture sales, has dropped slightly from 2019 to 2020, the motion category continues to increase its share of upholstery sales — up to 13.7% when combined with leather motion, according to a FurnitureCore Industry model.

Recliners as a sub-category have dipped down to 8.35% in 2020 from 9.09% in 2019, but the motion/recliner category finished out 2020 with 22.09% of furniture sales compared to 21.22% in 2018. The model also shows the growth of motion within the upholstery category – jumping to 23.56% in 2020 from 21.66% in 2019 and 21.39% in 2018.

With more manufacturers and retailers evolving with consumers to find that perfect balance of comfort and style, the sky is the limit for the motion/ retailer category.

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