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From Home Furnishing Business

Round Two

Larry Norris reopened Norris Home Furnishings during dark days for furniture retailing. He hasn’t looked back since.

By Powell Slaughter

March 2009. The U.S. economy is a shambles. The housing market is practically non-existent after its overinflated balloon burst the previous fall. Layoffs, tight-fisted lenders and frightened consumers are leading to an unprecedented number of furniture store closings, and the grimmest outlook our industry has seen since the Great Depression. Open a furniture store? Why the heck not?

After Hendricks Furniture Group—the company that bought Ft. Myers, Fla.-based Norris Furniture & Interiors in 1998—withdrew from the Florida market four years ago this past March prior to declaring bankruptcy, Larry Norris, then 67, decided to make lemonade from what were then some particularly bitter lemons. He and his wife, Renee Norris, sat down in High Point with Home Furnishings Business during September’s Premarket to talk about the rebirth of the Norris retail brand.

Norris had founded the business in 1983 and had grown it into an important player in Southwest Florida’s home furnishings retail scene. By 1998, He and Renee had both survived cancer and felt good about an early retirement, hence the sale to Hendricks. He still owned the Ft. Myers showroom and warehouse—he’d been leasing it to Hendricks— and was not optimistic about his prospects for filling it.

He didn’t want it sitting idle, and he still felt the furniture itch. “I didn’t think we’d find a buyer or tenant for those buildings in this market the way it was then,” said Norris, president and owner of Norris Home Furnishings. “I told the Realtor ‘If we haven’t found a tenant by September, we’re going to the October High Point Market, and we’ll be back in the business ourselves.’

“Some of the salespeople called and told me customers were crying because the store was closing,” he said. “I have a passion for the industry, and I love it. I’d opened my first store in 1983, so that’s 30 years we’d been serving Southwest Florida.” The move was no surprise to Renee Morris, vice president and accessory buyer for the business. “I’ve always said that what makes an entrepreneur successful doesn’t go away just because you sell the business,” she noted, adding that Larry had been staying busy with development and other ventures. “We did not have a quiet retirement.”

GROWTH TRACK

When the Norrises came back to High Point that fall, they found a warm welcome—and vendors glad to see Norris back in the business willing to support his efforts. That welcome has been one of the keys to Norris Home Furnishings’ growth.

“First, we had a very good reputation in the community,” Norris said. Along with his own reputation, it helped that the closings didn’t hurt the Norris name—all customers in Florida received their merchandise.

“Second, we were able to acquire very good lines, and we could get credit when many others couldn’t. Credit managers who’d known me from years ago came out and said, ‘We know your character.’ We paid for inventory, and vendors gave us nice terms up front. I also was able to hire some people and put together a good team,” he said. “I like to think I ‘plant the seed,’ but other people are out there watering, fertilizing and making it grow.”

Renee Norris noted that the Ft. Myers store includes many of their original employees.

Norris originally planned to keep the new operation, which had opened as Norris Home Furnishings that December, fairly small.

“When we sold to Hendricks we had 110 employees, and

I told Renee I never wanted to have that many again, but we’re headed that way now,” Norris said.

Indeed.

Staying “small” didn’t last long. After re-opening at its original location, Norris Home Furnishings began opening stores during a period when many furniture retailers were closing. The 17,000-square-foot Sanibel store opened in January 2011. When the original Robb & Stucky liquidated a month later, Norris looked to fill a gap, and reopened Norris’ old showroom in Naples, the company’s largest footprint with 46,000 square feet. Current employment stands at 84 people, and the retailer expects to hit $20 million in sales next year.

“I’m humbled I have as many employees, customers and vendors as I have, and I try to keep them all happy,” Norris said.

A COMFORTABLE PLACE

Norris Home Furnishings leans toward the high-end, and it works to create a non-intimidating, low-pressure atmosphere. “Our employees are like family, and we like to think of our customers as extended family,” Norris said. “Even though we’re higher end, we bring a lot of value, and we have great customer service.”

A greeter welcomes customers, who are allowed to browse on their own for a while before the greeter passes their description to the next salesperson up.

“One of the comments we get is that our customers feel very comfortable in the stores,” Renee Norris said. “I might walk by the design center at 10:30 in the morning, and see a couple that still might be there at 2:00.”

The Naples store, being bigger, can show more products, but the merchandising is similar in all stores. Norris merchandises by lifestyle, not by manufacturer. Themes include Coastal, Island, Soft Contemporary and Traditional, with a heavy emphasis on full design.

“We have 15 licensed designers on staff, and all our salespeople are designer-oriented,” Norris said.

The company makes full use of those skills by offering a soup-to-nuts assortment of products beyond furniture and accessories.

“We also sell any kind of window treatment, wall coverings, drapery, bedding, and we have a rug gallery in the Naples store,” Norris said. “If a customer buys a new home or condominium, we can help them with everything they need to furnish it.

“We have contractors we work with,” he said. “If a customer’s buying an older home and wants to remodel a bathroom, we can help with that.”

PLAYING IN A TOUGH LEAGUE

When it comes to the high end, there are some pretty big names playing the furniture retail game in Norris’ market—high-profile brands such as the new Robb & Stucky; and Clive Daniel, the furnishings retail kicked off by former Robb & Stucky execs Clive and Daniel Lubner.

All are vying for a slice of the $692 million pie. That’s the total furniture sales volume for the combined Cape Coral-Fort

Myers-Naples-Marco Island, Fla., market last year. This year is on target to be about the same. For the first half of 2013, total furniture sales for the combined markets was $343 million.

“We have a lot of good competition, and I like good competition,” Norris said. “It helps our industry. The more people you have out there advertising, the better it is for retail.”

As far as advertising goes, Norris Home Furnishings runs around a third newspaper, a third television, plus magazines and direct mail.

“Half of it’s wasted, but I can’t figure out which half,” Norris joked. “We’re in a market where newspaper still works—it’s an older demographic, people who still read one every day.”

Charity and community activity is important in getting the name out and building reputation. Take the “Writer’s Domain.”

“We invited writers, New York Times best-selling authors with homes in Naples, to the store,” he said. “We tied it in with Barnes & Noble” for cross-marketing, as well as with local literacy groups.

“We sent the writers a questionnaire about what their writing environment is like, and we re-created those in the store,”

Norris said. “That was a fun event, and we got all kinds of press.

We’ll do that again in January. Most of those events are invitation- only, in the evening in the store.”

The store also cross-markets with builders and developers.

“Building’s coming back in our market,” Norris said. “We’re eager to do model homes for builders, because that’s an extension of our showroom.”

When Norris got back into business, he did find a new world of names such as Facebook, Twitter and Pinterest.

“When I was here before, we didn’t have social media— that’s all new to me,” he said. “We’re just getting into it—we recently hired a marketing firm who’s going to help us with that.”

Teaming with the right vendors also helps Norris stand out in

a competitive environment.

“We’re the only Stickley dealer in Southwest Florida, and they are a great resource,” he said by way of example. “We just had four people up there in Manlius (N.Y.) in August. My goal is to have all our salespeople go through the factory. It’s a great education on the line and on how furniture should be made.”

LOOKING AHEAD

With a goal of hitting $20 million next year, Norris Home Furnishings continues to explore new possibilities for business.

“Right now we’re looking at the Internet, and we’re researching that now,” Norris said. “On our marketing plan, by the end of the year, we’ll come up with some kind of “Look Book” about Norris, telling customers about the store and the lines we represent. We hope it’s something people will want on their coffee table.”

Contract is another area with potential.

“Renee and I went to Neocon this year to see if we want to get involved to some extent with the contract market,” he said.

“That’s something we’d go into very slowly. I wouldn’t want to do a 300-room hotel.”

Renee Norris noted that while there’s been fast growth for the business, the couple wants to make sure it’s “responsible growth.”

“We’re tweaking a lot of what we’ve done and are working on infrastructure, because we have had that rapid growth,” she said. For instance, “our computer system is capable of so much more than we’ve utilized so far. … We’ve been working the last three months to link images to products in the system so it’s easily printable for the customer.” So, don’t look for another retirement in the immediate future.

There’s too much going on. “It’s still going to snow up North, and people will still want to move to Florida,” Norris said. “There’s always enough business, and if not, somebody goes away. I hope never to be that one.” HFB


Key Vendors

C.R. Laine, Century, Drexel Heritage, Fine Furniture Design, Henredon, Hooker, Lexington, Schnadig, Sherrill, Stanley and Stickley are key vendors among a total of around 300.

 

Key Management

Larry Norris, Owner and President; Renee Norris, Vice President and Accessories Buyer Doug Ulrich, General Manager Gary Klann, Naples Store Manager Luanza Maitland, Interior Designer and Buyer

 

"We have a lot of good competition, and I like good competition. It helps our industry. The more people you have out there advertising, the better it is for retail".

- LARRY NORRIS

Norris Home Furnishings

 

Norris Home Furnishings at a Glance

Upper-middle to high-end, design-oriented home furnishings retailer with three Southwest Florida stores: 20,000 square feet in Ft. Myers; 46,000 square feet in Naples; and 17,000 square feet on Sanibel Island. 36,000-square-foot warehouse/distribution center in Ft. Myers. Originally opened in 1983, sold to Hendricks Furniture Group in 1998. Re-opened in 2009 in Ft. Myers.

84 employees.

Annual revenue: $15-20 million

Web site: NorrisHomeFurnishings.com

Consumers Crave Comfort

By Sheila Long O’Mara

Consumers shopping for motion upholstery want more heat, more massage and more creature comforts in their reclining sofas and sectionals. In a Home Furnishings Business survey conducted last month of consumers who had bought motion upholstery within the last 12 months, nearly 62 percent either bought or would like to have heat and massage in their seating. Automated adjustable headrests and lumbar supports were highlighted by more than 53 percent of the more than 500 participates.

Storage drawers at 50 percent and hidden tabletops at 48 percent were also in the top four of consumer wants in motion upholstery. That’s great news for the category in which suppliers are packing more and more function into motion upholstery. Vendors of motion upholstery have continued to push the functionality of motion frames with power mechanisms, heat and massage, drop-down tables, MP3 docking stations and more. Most suppliers report that the more bells and whistles packed into a frame, the better a particular model tends to retail. On a scale of one to seven, more than 82 percent of the consumer respondents ranked their satisfaction with their motion upholstery purchase as five or higher.

While quite a number of motion upholstery vendors highlighted power recline as a big seller among their customers, our pool of consumers haven’t quite caught on to the fanciest of the fancy. Just shy of a third—29.1 percent—say they’d prefer a power-operated mechanism in their motion upholstery. The remaining 70.9 percent lean toward hand-operated or push-back mechanisms. Possibly the best news out of the survey is that the consumers who recently bought motion upholstery are now hooked and are pleased with their purchase. On a scale of one to seven, more than 82 percent ranked their satisfaction at five or higher.

Reclining sofas and sectionals—motion upholstery—remain one of the fastest growing categories in the furniture industry. Since 2009, retail sales of motion upholstery have grown 16.07 percent to $6.59 billion in 2012—making it the fastest growing category for furniture retailers. The category made up 8.96 percent of all furniture and bedding sold in 2012, almost as large as the 14.05 percent that mattresses command. What is it that has the motion upholstery rocking along on such a growth projectory? We see a correlation between more upscale styling and function as a key driver. Motion suppliers are pushing the style envelope and marrying better looks with all the creature comforts consumers say they crave. Traditional lifestyles from sister company Design Circle like Classic, Estate and updated New Traditionalist have viable motion upholstery selections currently in the marketplace. Lane’s more classic styled, high-leg recliners, for example, add a hint of traditional to any setting. The Modern consumer shopping for motion upholstery can also find a varied selection of styles, including American Leather’s classy, contemporary swing recliners in a variety of updated colors. As we know, the beefy, bulky, plush motion frames tend to carry the marketplace, but if consumers are looking for a bit more panache to add to the homes the looks are available.

12 Reasons for Motion’s Growth

1.       The demographic for motion upholstery continues to grow alongside the aging population—a group that tends to gravitate toward lift, heat and massage features.

2.       Younger consumers tend to lean toward furniture with an ergonomic story to tell. Think gaming chairs or exercise balls.

3.       The influence of the automobile industry and its seating designs featuring lumbar support, heating and cooling seats, neck support and more. Why not relax as comfortably at home?

4.       The home theater has moved out of the basement and into the great room. Motion upholstery now has a broader audience.

5.       Motion suppliers have gained an edge by right-sizing their products. Motion comes in all shapes and sizes now. Remember the days when extra-large seating was all that was available?

6.       Better performance fabrics and fewer covers with scratchy olefin. Better fabric designs that work with motion upholstery have brought new consumers into the fold.

7.       Better leather education. Consumers now understand the durability of leather and its tendency to improve with time.

8.       Stressful lifestyles and long work days have consumers eager for soft place to land at home. Relaxation, pampering and nesting have come a long way with the benefits of motion.

9.       As the bedding sector have shifted its marketing toward better health through rest and relaxation, consumers have heightened expectations on how home furnishings can improve down time.

10.   Men and women are shopping together more these days, and having a man’s viewpoint in the furniture selection points toward better sales for reclining sofas and sectionals.

11.   Advances in motion seating size, silhouette and functionality, like wall huggers and multiple width seating, provide a broader reach to consumers.

12.   Successful marketing campaigns have removed some of the stigma of the category as “my father’s recliner” providing shoppers with “permission” to opt for a seating that does more—reclines, massages, stores and chills a drink.

 

What Retailers say

Ashley Primematic  Durablend  Sectional

This two-piece sectional is a fantastic look at an unparalleled value. The color is a great crimson red (not another brown sectional!) and has two power recliners, a drop-down storage tray and storage in the chaise/ottoman. Customers can’t resist the features and at $1,299, it has the price, look and bells and whistles that make this a HOT mover!

Seth Weisblatt

Sam’s Furniture & Appliances

Fort Worth, Texas

 

Comfort Design’s 114 Ventana

“We show it along with a recliner in a pale yellow, and it stands out like a beacon in a brown leather department. It has a split back with a high-grade leather so it’s very comfortable. We sell sectionals, sofas and recliners off that frame.” Retail price is $2,999.

Tom Lias

gorman’s furniture

Novi, Mi.

 

Coaster’s 550152 Reclining Loveseat

 “The majority of motion upholstery tends to be dark brown or black so the combination of neutral coloring, attention to detail and price makes this item a great seller.” Retails at $764.95.

Niraj Shah

Wayfair

Boston


 

What Suppliers Say

Palliser

Palliser’s Cortez sectional makes a powerful statement. Available in any of Palliser’s more than 300 leathers and fabrics, the Cortez is a strong seller, according to Lorri Kelley, vice president of sales and service. As show in this great leather with all power recline, the sectional retails at $5999; dressed in fabric with power recline, $3,599. “The power mechanism is the overwhelming majority of sales,” Kelley said.

 

Flexsteel Industries

Flexsteel’s Julio is all about comfort and eye appeal—sometimes a tricky combination when it comes to motion upholstery. Justin Mills, director of advertising and public relations, said the design tells the story. “Julio begins with a wonderfully soft automotive bucket seat and deep pocketed back divide,” he said. “The arm, arm pad, back and chaise page are lined with a French flap stitching detail that highlights the architecture of design.” In leather, Julio comes standard with power recline and is priced to retail at $1,999. Julio is also available in fabric with or without power recline.

Franklin Corp.

The Milano sectional from Franklin Corp. offers several features that make it a winner for the upholstery supplier—eye appeal, comfort with a chair and a half reclining scoop seat and a great price point. “The Milano is totally modular and can be built several different ways—including a console and tablet tray with USB charger,” said Chuck Tidwell, vice president of merchandising and product development for the company.As shown, Milano retails at $2,399 in bonded leather. In a smaller configuration with two recliners, two armless seats and a wedge, the sectional would retail at $1,699.

 

Best Home Furnishings

The Bodie motion sofa from Best Home Furnishings is a streamlined reclining sofa that features power recline. Eric Vollmer, sales and marketing specialist for the company, said is available in “hundreds of fabrics and also with a manual reclining function.”As shown in leather, Bodie retails at $1,374 with the power reclining mechanism

Lane

The Grand Torino reclining sectional from Lane is among the company’s top selling motion groups, as well as top viewed on the Lane Web site. “The transitional design with comfort cradle seating and envelope style padded arms make it incredibly versatile,” said Mindi Brothers, vice president of marketing. Grand Torino offers a myriad of creature comforts, including a storage console, pulldown table and drink holders, power recline option and a sleeper sofa with the company’s trademarked iRest gel-infused foam mattress. Estimated retail price as a four piece, double reclining, sleeper sectional is $2,499.

Cozzia USA

Cozzia’s EC618 robotic massage chair is marketed as the Ultimate Massage Chair, and its target retail price is $3,999 to $4,999. Controlled by a microcomputer that performs a number of massage techniques, Bob Bruns, president of Cozzia USA, said the chair is a best seller with its bells and whistles. The chair uses innovative 3D robotics technology to offer a thorough massage by focusing on the acupressure points of the back. In addition to the mechanism, the chair has 64 air bags and vibration massage in the seat to create the various types of massage techniques. In addition to the massage and heat functions, the chair offers speakers and LED lighting for audio and visual stimulation.

Ekornes

The Stressless Buckingham sofa is the winner at Ekornes. The three-seat, low-back sofa retails from between $4,200 and $5,800 depending on the leather. Inspired by some of London’s most chic addresses, Buckingham offers a sleek, classy feel to reclining sofas. Buckingham features gentle curves, padded arms and a supple seat to provide the ultimate in relaxation. Each of the seats offers individual recliner with the patented Stressless Glide System to provide the right amount of support.

La-Z-Boy

The Pinnacle Reclina-Way full reclining sofa from La-Z-Boy offers two fully reclining end seats that offer full-body chaise support and plush, pillow high backs. Amy Hellebuyck, manager brand marketing and public relations for La-Z-Boy, said the “line is a top-seller because of its smaller scale, as well as its customization and fabric and leather options, including power, a drop-down table and console.” Target retail price starts at $1,159.

Robb and Stucky Adds Two to Management

Robb and Stucky announced two new additions to its corporate team this week.

Brian Crowley joins the Fort Myers, Fla.-based high-end retailer as its senior vice president and chief financial officer after his most recent stint with Macy's Central in Atlanta. Crowley brings with him more than 20 years of retail experience with Federated Department Stores. 

J. Robert Gould, who recently worked for Wayne Homes by Centex, joins the company as its new vice president of human resources. With 30 years of experience in employee relations, training and development, Gould has worked at Carlson Wagonlit Travel, World Travel BTI and Walt Disney World Co.

Know Thyself

A merchandise scheme that appeals across price points and big selection are keys to the self-image Gorman’s Furniture Projects. 

By Powell Slaughter

A commitment to offering a huge range of styles at upper-middle to high-end price points coupled with a “flat” management approach that inspires all employees to make offering solutions to customers their top focus have Gorman’s Furniture thriving in a highly competitive region for furniture retailing.

Based in Novi, Mich., Gorman’s serves the suburban Detroit area and, since March 2011, Grand Rapids. It’s an area chock-full of familiar, powerful retail brands. Those include Art Van (which has revived the high-end Scott Shuptrine name), Gardner White, Hillside Furniture and the 800-pound gorilla, Ikea. Not only that, research from Home Furnishings Business’ parent company Furniturecore/Impact Consulting shows the markets Gorman’s serves—Warren-Troy-Farmington Hills, and Grand Rapids—vary in terms of age and income, which might create problems for some furniture retailing models.

FROM “GOOD” TO “EXCEPTIONAL”

“The way we’ve competed is to have a clear understanding of who we are and project that to the marketplace,” said Tom Lias, president and CEO. And what Gorman’s projects is a huge selection at a range of prices. “As you enter one of our stores, you’ll see about half the store is set up into lifestyles, and the other half is divided into (category specific) shops,” he said. “Around half our customers coming in are product-specific. They’re looking to solve a problem, generally with a particular product category. Those customers are easy to talk to.” For the other half that says, ‘We’re just looking, we want to browse,’ Gorman’s sales staff, which consists mostly of interior designers, can steer those customers to defined lifestyles that are shown in vignettes. Gorman’s vignettes blend vendors, and they blend price points.

“Our merchandising platform is good, better, best and exceptional,” Lias said. “We treat merchandising in a horizontal fashion, like a flat management style. In flat management, everyone is equal, and everyone is important, they just have different job descriptions. That’s the way we run the business. The partners are out on the floors.

“The total (presentation) is what services the customer. Our ‘good’ presentation is branded under the ‘Intro’ brand—we’ve had that copyrighted for 17 years. You’ll have a $799, $899, $999 sofa. All the product categories are represented in Intro. It helps our competitive position, and makes us approachable. We know people have different needs for different times in their life, and for different parts of their house.” The contemporary furniture store in Southfield, Mich., is an exception to the look of Gorman’s merchandising scheme at the other stores, but the good, better, best and exceptional platform remains the same.

“We can have a $799 sofa and a $7,999 sofa from Baker in the same store,” Lias noted. “They’re there for a different customer, or for the same customer for a different part of the house. They might want that Baker piece for the living room, but something less expensive for where the kids hang out.”

A DESTINATION

If Gorman’s internal merchandising is good, better, best and exceptional, its external merchandising is led by ‘100 Brands.’

“About six or seven years ago, because we want to be a destination for the best selection, we created the platform of ‘100 Brands,’” said Lias, who joined Gorman’s as a partner in 1984 after long experience in dedicated, single-brand stores that included Ethan Allen, La-Z-Boy and Drexel Heritage. “We believe we have the broadest range in Michigan, maybe the Midwest in prices and styles, because most traditional stores don’t do contemporary. We have the 100 best brands in furniture all in one place, all in one time.”

Television is Gorman’s number one vehicle for getting that message out to the marketplace, along with some radio and print in supporting roles.

“In addressing those 100 brands, we say ‘We are Michigan’s style leader,’” Lias said. “When you define yourself that way, you can have the moderate prices and the high end in the same store, because it’s all about style. That is our market position.” The style and selection range fit well with Gorman’s emphasis on design-oriented sales. Of its 60 sales staff, Gorman’s has around 50 with design degrees, background and experience. Their services are complimentary.

“Working with a designer is a by-product of coming to Gorman’s,” Lias said. “All of those 50-plus people will make house calls, create plans for customers. That could involve just answering a couple of questions about color to designing a complete floor plan for the home.”

FROM FREIGHT TO FINE FURNITURE

Gorman’s dates back to 1940, when Founder Ben Gorman began selling damaged railroad freight from an outlet in Southfield. Soon, Gorman’s started receiving damaged furniture, which it would repair for sale. As word spread, furniture retailing was a natural next step. In 1965 Ben Gorman sold the store in Southfield to Bernie Moray who continues the operations with partners Tom Lias, Jeff Roberts and John Moray. That led to opening new locations, and a new direction.

“After Bernie acquired the company, he wanted to take it more upscale,” Lias noted. Gorman’s opened a store a couple of hours from its Detroitarea base in Grand Rapids in March 2011.

“We actually returned to the same store we were in 15 years previously,” Lias said. “We had Drexel Heritage store there for 15 years. It was bought out from under us while we were negotiating the lease.

“Ultimately they did us a favor, because we moved back to Detroit, where we opened new locations and moved existing stores. We really built up our business in Detroit, so it ended up a blessing in disguise.”

“FLAT” MANAGEMENT

Lias mentioned earlier that Gorman’s runs on a “flat” management model. The owners are on the floors, and they solicit input from all employees, which has generated powerful esprit de corps. And Gorman’s worked hard during the recession to keep those people in their jobs.

“The adjustments we made in 2008 were almost instantaneous,” Lias said. “By the end of October we had restructured the company. We took everyone to a four-day work week, and we were able to retain almost all our staff for the duration of the downturn. By moving early we didn’t have to be as drastic in our cuts, no closing of stores, laying off staff.”

It’s no surprise, therefore, that Gorman’s has been rated one of Michigan’s “Best Places to Work” for three years in a row by the Detroit Free Press.

“We have almost no turnover, and that includes administration and warehousing,” Lias said. “We keep everybody involved in the business —we communicate the goals, the standards, across the board.

“Gorman’s has one policy, and that’s ‘Must Be Right’ (see accompanying box). Everything else is a standard or procedure. And ‘Must Be Right’ isn’t a phrase for us, it’s a way of life that creates a very positive environment to work in.” It’s all part of flat management’s egalitarian approach, and it’s helped Gorman’s attract top-notch talent.

“Everyone’s treated with respect and involvement. It goes back to that flat management,” Lias said. We have no trainees; everyone here is a career furniture person. “When furniture stores were closing right and left, we went after their top one, two or three people. Almost everyone at Gorman’s was the best at their job someplace else.

You have to have a very strong image, based on the needs of our designers, because that’s what they need to solve customers’ problems. If you solve problems, you’ll deliver a whole lot of furniture.” HFB

 

Key Management

Four co-owners include Tom Lias, president and COO; Bernie Moray, senior partner; Jeff Roberts, executive vice president; and John Moray, vice president of operations and information technology.

Key Vendors

American Leather, Bernhardt, Century, Better Homes & Gardens, Drexel Heritage, Hendredon, Hancock & Moore, Hickory Chair, Hickory White, Hooker, Lazar, Lexington Home Brands, Natuzzi, Rowe, Serta, Sherrill, Stanley, Stickley, Stressless by Ekornes, W. Schillig.

 

One Policy

Gorman’s Furniture has just one policy, and it’s “Must Be Right.” It reads: “Before you arrive, we assure you that Gorman’s is prepared to make presentations that meet your expectations. Whether your interests lie in classical motifs and traditional ambience, or in the latest contemporary trends, our objective is to help you visualize all the choices you have to achieve your unique design goals.

While you work with us, we assure you that the professional staff members who assist you are experienced, informed and – above all – sensitive to your needs: that you and your specific requirements come first and foremost. “After your purchase, we assure you that everything meets our standards for quality, specifications, and service. If there is a problem, Gorman’s will correct it.” “In short, we assure you that everything must be right, or we will make it right.” “That is more than our promise. It is our policy.”

"We can have a $799 sofa and a $7,999 sofa from Baker in the same store. They’re there for a different customer, or for the same customer for a different part of the house".

-- Tom Lias

Gorman’s Furniture

Market Profile

Warren-Troy-Farmington Hills, Mich., MSA (includes Novi, Mich., Gorman’s Hometown)

2013 1st Quarter Retail Sales: $200.8 million

Change in Sales: -3.42% from 1st Quarter 2012

2012 Retail Sales: $837.1 million

Other Retail Players: Art Van Furniture, Hillside Furniture, Gardner-White, Restoration Hardware, Crate & Barrel, Pottery Barn, Arhaus Furniture, American Freight, Value City Furniture, Ikea.

Gorman’s Furniture at a Glance

Founded: 1940 as a retailer of damaged freight

Homebase: Novi, Mich.

Store Count: 5

Other Real Estate: 2 warehouses totaling 66,000 square feet

Employees: 150

Annual Revenue: $30-$35 million

Web site: Gormans.com

Counter-Punching

With 13 stores, Spiller Furniture has buying power for a big selection at competitive pricing.

While most furniture stores were recovering from a recession that left cyclone-like devastation in its wake, Tuscaloosa, Ala.-based Spiller Furniture had a real tornado to deal with.
The April 27, 2011, storm left 52 dead
in the area and destroyed 12 percent of the city. It also wrecked the 13-store promotional furniture, appliance and electronics retailer’s nearby Alberta City location.
The retailer decided not to reopen that store. The tough
economy of 2008 to 2010 had forced Spiller to analyze all expenses and operations, and it already had closed some under-performing locations, trimming employment from a high of 175 to the 115 it has today.
Business is pointing in the right direction now.
“The past two years have been a steady growth of 5 to 8 percent in sales,” said Shane Spiller, the company’s third-generation president. “We are a much leaner operation now that operates with a core group of hard working employees.”
With 13 stores, the company has good buying power, and the ability to deliver quickly across a market that includes east central Alabama and eastern Mississippi. That, plus its own in-house credit terms, allows Spiller to make popular-price furniture accessible to a lot of people.
It’s turned out to be a strong niche.
“The customer has the ability to purchase using our relaxed in-house credit terms,” Spiller said. “We report the customer payment history to the credit bureaus, and it allows the customer to build their credit.
“Renting or leasing furniture does not allow the customer the ability to establish a credit history, and therefore they have nothing to show others their ability to pay their debts.”
As a regional chain, he added, Spiller Furniture has the purchasing power to provide a larger selection of merchandise to those customers; and a 60,000-square-foot warehouse to back quick delivery from any of its locations.    
THREE GENERATIONS & COUNTING
Spiller Furniture was founded 1948 by Shane’s grandfather, James E. Spiller  Jr., when he took a local moving company and slowly transitioned into a retail furniture store.
Spiller’s in-house installment credit was a fixture from the start, with most customers buying their furniture on credit.
“That business began to grow with route salespeople that would travel to local towns selling furniture and collecting on their accounts,” Spiller said. “New Spiller Furniture stores would be opened in towns where customer accounts were established.”

Currently, 75 percent of Spiller’s customers still rely on the retailer’s in-house installment credit.
The founder’s son, Mike Spiller, and his sisters, Jimmie, Nedra, and Joan all played a part in growing the business during the ‘60s and ‘70s. 
Mike Spiller, Shane’s father, became president in 1982 shortly before James Spiller passed.  He continued to lead the company until Shane was named president in 2004. 
Like many younger-generation retailers, Shane Spiller got an early start in the business.
“I started pushing a broom when I was 12, and worked summers and any time I was on break from school,” he said.
During those years, Spiller worked in a variety of areas in the business, in the warehouse, stocking, and then the sales floor. After graduating from the University of Alabama in 1995, he moved into inventory control, where he worked until succeeding his father as president in 2004.

FAMILY FRIENDLY TOUCH
Spiller Furniture strives for a consistent atmosphere at all stores, one that focuses on value-priced home furnishings and that’s welcoming to families shopping together.
Advertising promotes a friendly, family atmosphere for customers and employees, and the retailer makes that part of the store experience.
“When someone comes in the door, the person who greets them is representing the Spiller name, so I want a relationship with employees that will roll over to the customer,” Spiller said. “We have a children’s section in the stores where they can play while their parents shop, and where the parents can be comfortable leaving their kids.”
Television advertising and social media reinforce that family friendly message.
“We personally promote the business with me and my three sons (10-year-old twins Mike and Mac, and 5-year-old Major) telling about the current sales event,” Spiller said. “Our tag line is ‘Big Selection, Friendly Service, and Credit, Credit, Credit!’”
Television is one important vehicle. Another is the circular program, which Spiller Furniture does through “married mailings,” that is, combined with other pieces to get the cost down.

FOCUS ON VALUES
The recession forced Spiller Furniture to take a hard look at its business. Part of that process included hiring an interim CFO who introduced the retailer to the Entrepreneurial Operating System, a concept based on the book “Traction” by Gino Wickman.
EOS led to the establishment of Spiller’s Core Values, which provide a basic road map for everyone in the company.
Spiller’s six Core Values are: Dedicated and Committed; Is Accountable; Takes initiative; Does the Right Thing; Open and Honest; and Good Attitude.
“All organizations have their core values,” Spiller said. “These core values just need to be uncovered and communicated to all.”
The company started EOS at the beginning of 2012, so it’s been in place for 18 months.
“We have quarterly meetings where we set our 90-day goals—we call them ‘rocks,’ you know, ‘move the big rocks first’—and we have weekly management meetings,” Spiller said. “Right now we’re instituting weekly meetings at the store level, so the stores will all be on the same agenda. It makes sure we have the issues on the table.”
The values also have given the retailer consistent guidelines for hiring, firing and evaluating employees; and a framework for keeping everyone moving in the right direction. That’s especially important moving forward since Spiller Furniture runs a lot leaner than before, and if someone’s not pulling their weight, problems come up in a hurry.
The values are an all-or-nothing proposition for everyone at Spiller Furniture.
“If a particular employee doesn’t have one of the core values, we can do something,” Spiller said. “You get judged on those values three ways—you have it, you’re on the fence, or you don’t have it.
“If you don’t have it, we’ll counsel—there might be something going on at home and we’ll work with you—but you have to understand this is a business, and we need you to get on the bus.” HFB

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