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From Home Furnishing Business

Strength in Adversity


By Powell Slaughter

One might not think western Pennsylvania and Maryland would be a prime area for a furniture retailer to expand during a recession, but that’s what Wolf Furniture did. The Bellwood, Pa.-based retailer grew during the downturn, filling in its regional market presence by acquiring stores that were going out of business. In the 10 local markets in Pennsylvania and Maryland where it operated, 82 competitors went out of business, while only one new operation opened, according to CEO Doug Wolf.

This past Labor Day the retailer entered northern Virginia with a store in Leesburg. How did Wolf grow while others closed? “Some of that was simply economics,” Wolf said. “You had a lot of mom and pops with good locations and good employees who just couldn’t make a go of it for whatever reason.

“We tried to come in and inject some capital into those stores, which had a lot of residual goodwill among their customers. We’re a known name in the region, and consumers and employees actually welcomed us in those instances. We have a lot of longevity within our areas, and we’re a family business.” While the furniture retail business didn’t start until 1902, the Wolf family’s retail roots in western Pennsylvania trace back to the 1860s, when it started a hardware operation.

The furniture business is now under its fourth generation of family management—Doug’s father, John Wolf, remains active in the operation as chairman. That family touch goes a long way in the smaller and mid-size cities Wolf serves. If a customer has an issue, they get a response from someone with the same name as the one on the sign. “I get every positive or negative customer reaction in our organization,” Wolf said. “It’s an opportunity to praise an individual or get in touch with local management to make corrections. “We also tend to be a very loyal client to our suppliers, and that perhaps is not as common as it once was,” he said.

During the recession, Wolf wasn’t worried about being dropped by its suppliers, and they weren’t worried about being replaced on the floor at the drop of a hat.


Wolf was in a position to make moves during the recession, but it was no more immune to the drag on business than any other retailer. The store went the extra mile to create a positive environment for employees and customers alike. “When your business is down, that creates the danger of a high-pressure sales environment,” Wolf said. “We decided to go to non-commission compensation for our salespeople across the organization. It took away the immediate relationship between closing the sale and making a car payment; and it made for a more pleasant shopping experience for the customer.”

Speaking of the shopping experience, Wolf spent a lot of dollars on food and drinks during major traffic hours so that customers would spend more time in the store. And while Wolf expanded, it did so with prudence. “On average our preferred footprint was 60,000 to 67,000 square feet, but the last couple of years it’s been 40,000 to 50,000,” Wolf noted. “That reflects the scaled-down volume, both for ourselves and our industry.”


Fortunately, Wolf had repositioned itself before the recession hit. “Our executive team started trying to figure out which direction we’d take in the ‘90s,” Wolf said. “We’d been a cross between a smalltown credit house and full-service retailer. Shopping was moving from downtowns out into the suburbs, and we had to think about where we wanted to be.”

By 1992, the operation had grown to 27 stores in three states. That’s when Wolf evaluated an offer for sale of 14 stores to national chain Heilig Meyers, deciding to hold onto three stores located in Altoona and Johnstown, Pa.; and Frederick, Md. Wolf’s own research found that while it was the store of choice for many consumers in its markets, as their families matured and tastes changed, they were moving away. “We decided to broaden our appeal with a quality focus and be a little more fashion forward, especially as the Value Cities and Ashley Homestores started appearing in our market,” Wolf said. “We’d buy things you might not find in a chain—Jaipur Rugs, Four Hands. We merchandise that sort of product into our assortment. We also try to merchandise where a third of our store is available in-stock for immediate delivery; and product with choices and options are on quick-ship programs. “A lot of the mom-and-pops are gone, and we’ve tried to step in and fill that void. We want to be the dominant full-service store in the market.”


Wolf said another reason it made it through the recession was a decision to keep advertising.

“We, like many survivors, have never met an ad we didn’t like,” he said, characterizing the stores’ advertising approach “relentless.” “There are months when run 30 different commercials— departmental, lifestyle, community interest, financing,” Wolf said. “We have mixed messages—we don’t believe we can give you a positioning commercial in the same spot where we’re screaming about a sale.” Television is the dominant medium, and Wolf is doing a lot more mailintensive promotion to preferred customers. That approach helps the retailer achieve a business mix split evenly between existing and new customers. The store is big on asking customers about their experience. For a new customer, for example, Wolf gathers information that includes, among other things, age and income; whether she’d come back; ratings for the showroom and delivery experience; what else she might buy and when she plans on buying it. “With our confidence ratings, we feel we can get the new ones back in a second time,” Wolf noted, adding that senior management spends a lot of time ensuring Wolf has more happy customers than the other guy. “If you’re a store manager, you’re way more likely to hear from me about a customer satisfaction survey than how business is going,” Wolf said. “Profit is a by product of doing something well, and in our case it’s keeping customers happy.”


Wolf Furniture at a Glance

Homebase: Bellwood, Pa.

Store Stats: Founded in 1902, Wolf Furniture operates 12 stores and a clearance center in Pennsylvania, Maryland and northern Virginia. Stores range from 40,000 to 65,000 square feet; and employ around 500 people

Key Industry Affiliations: A member of an Impact Consulting performance group and a FurnitureCore client

Key Management: Doug Wolf, CEO; Gene Stoltz, president; John Wolf, chairman; Doug Shaffer, senior vice president of store operations; Germaine Crocker, treasurer

Annual Revenue: Around $100 million

Key Vendors: La-Z-Boy, Southern Motion, Catnapper/Jackson, Smith Brothers, Restonic, Sealy, Craftmaster, Broyhill, Daniels Amish, Sunny Designs, Klaussner.

Web site:

Consignment Model Gains Steam

Allegheny Furniture Consignment, a furniture consignment concept developed by Wolf Furniture CEO Doug Wolf, is picking up momentum.

Right now AFC has one existing store in Harrisburg, Pa., with another set to open in another Wolf market in next year’s first quarter. And last month, it gained its first outside license with Laurel, Del.-based Johnny Janosik. “We believe this is going to be, and not only for us, the next big move on tie breakers,” Wolf said, adding that he gives a lot of the credit for the idea to Mann, Armistead & Epperson’s Jerry Epperson. “He talked a lot about how you have to give her a way to get rid of the stuff she has to make room for new furniture.”

Wolf found that the store’s employees were referring customers to consignment outlets for unloading old goods on many occasions. “We realized that if we can provide customers with an outlet store for their old furniture, we can get two sales from the same customer,” he said (68 percent of customers consigning with AFC are Wolf customers). “You have additional gross margin revenue with no additional inventory.” Sales are up 40 percent this year at Wolf’s AFC outlet, selling more than 8,000 consigned orders so far. AFC is scheduling consignment pick-ups out almost five weeks. Wolf started pitching the concept to other stores when he took a booth in the resource center at the 2012 Home Furnishings Industry Conference in Palm Springs, Calif. Almost two dozen furniture retailers are interested in the project, and some of those are ready to commit.

“We have licensing contracts out for eight more retailers at the moment,” he said. “I don’t want to name names right now, but we have a lot of friends out there, and we’ve been able to pick and choose.”

A Look at the Markets

Wolf Furniture serves markets ranging from small to mid-size cities in Pennsylvania and Maryland to a college town (State College, Pa.), and, with the opening this year in Leesburg, Va., the outer fringe of the Washington, D.C., metro area.

Through this year’s third quarter, 10 markets totaled $1.8 billion in estimated home furnishings retail sales. That includes a new market, the D.C. area, but for the markets Wolf historically served, the total is $717.4 million. With the exception of State College, where Pennsylvania State University’s college-age population skews the count, those markets have very similar age demographics. Pie charts are virtually identical. Excepting State College, the under-25 population in Wolf’s Pennsylvania and Maryland markets ranges from 3.17 percent in Bethasda-Rockville-Frederick, Md., to 4.41 percent. Consumers age 25 to 34 vary from 11.6 percent in Johnstown, Pa., to 18.29 percent in State College. Most of the others are in mid-14s to 15s percentage in that age group. The 35 to 44 segment offers a bit more variation. That age bracket accounts for 15.4 percent of customers in Lancaster, Pa., to 16.5 percent in Altoona, with Johnstown and State College in between. Five markets for those ages range from 18 percent in Chambersburg, Pa., to 20.9 percent in Bethasda-Rockville- Frederick, Md. The income sweet spot for furniture retailers, consumers in their prime earning years, age 45 to 64, ranges from 35.2 percent in Chambersburg to 45.1 in Johnstown, Pa., in the store’s historical markets; with the only outlier from that range being 30 percent in State College.

As middle to upper-middle retailer, Wolf is well-positioned for its traditional markets’ income levels. Only three markets are below 60 percent in the middle income segment, households with annual incomes of $35,000 to $99,999. In that income demographic the range goes from 47.8 percent in Bethesda- Rockville-Frederick, Md., to 57.8 percent in State College; 59.1 percent in Johnstown; 61.5 percent in Altoona; 62.4 percent in Harrisburg-Carlisle, Pa.; 63.8 percent in Hagerstown-Martinsburg; 65.9 percent in Lancaster, Pa.; 66.2 percent in York-Hanover; and 66.4 percent in Chambersburg.

Free Time

Wolf Furniture CEO Doug Wolf is fortunate enough to be able to mix business with pleasure. “I’m an avid fisherman and snowmobiler,” he said. “I’m a very lucky guy in that there’s a broad group of home furnishings friends who share those passions, too.” It’s easy and natural to talk shop when out with friends in the winter snow or on the water. Wolf isn’t picky about what he goes after either—he just loves fishing of all sorts. “I can enjoy fishing for catfish as much as fishing for sailfish,” he said.

HFB’s 3rd Annual Power 50 Ranking

Welcome to our third annual Home Furnishings Business Power 50 ranking.

The ranking—our take on how the industry’s retailers should be ranked— takes into account retail sales volume, social media power through Klout scores, the popular vote and new for this year, market share. It’s a different spin on home furnishings retail rankings, and throughout the next several pages, you see the different ways in which we sliced and diced the data. Dissecting things in a way that shed a bit more light on our industry’s retailers.

To those of you who took the time to vote with our online ballot: We salute you. Your input makes ourPower 50 a retail ranking with some personality. Thank you!

Enjoy the lists.

Click here to see the list.

An Independent Front

Independent retailers make up a huge chunk of the furniture retailing community. We thought it would be interesting to shake up the bag and see how the independent retailer— those with less than $50 million in annual sales and operating in one state—stack up.

Here’s our look at the top 20 independent retailers.

Click here to see the list.

Regional Chains

Regional chains tend to make a big splash in their markets. For our classification purposes, regional chains are those retailers with stores in states other than their own home base. Retailers like Rooms To Go and Havertys who bring big name recognition into the markets in which they operate rank on this list. Other retailers, like Art Van and Grand Home—which have more recently ventured out of their home state to broaden their consumer reach—make the list, too.

Click here to see the list.  

Large Independents

Large independent retailers tend to rule their markets. They have annual sales in excess of $50 million, and operate stores within one state. Name recognition among consumers is powerful, and the large independent retailers generate the rewards from owning the lion’s share of their markets.

Click here to see the list.  

Going Up

The line between manufacturing and retailing continues to blur, and vertical retailers are gaining steam. Suppliers see great benefit in the ability to control the message and presentation of their brand. Retailers like the Williams-Sonoma lineup of brands, reap similar benefits in controlling look, feel and scent of their products and stores. Here are our vertical lists for both manufacturers who cross over into the retail side of the business and for retailers who step over into the supply side of furniture land.

Click here to see the list.  



The Hottest Retailers

By Bob George

Revealing 2013’s Sexiest Furniture Retailers!

Relax. We’re not really going to do that even though that the issue for many consumer magazines is the one most often read. Nonetheless, people DO love lists and they DO love to compare. Therefore, in this issue we present Home Furnishings Business’ Power 50. This is the third year we’ve analyzed this topic and believe it is evolving as a mechanism to identify outstanding performance beyond revenue.

The question becomes, “What are the variables?” First, we must remember the ultimate arbiter of who an “Outstanding Retailer” is the consumer. As a consulting firm, we measure how the consumers perceive each retailer in their markets in terms of 11 retail experience factors that influence consumers’ purchase decisions. If we consider the national ranking of these 11 factors by importance, we see the following. Price of the product is the most important factor. Following in order of importance are Reputation of Retailer and Product Selection sharing the position of second most important factors. The other factors follow in this order: Customer Service, Ease of Shopping, Store Interior, Effectiveness of Sales Personnel, Store Display, Advertising, Financing Options, and Store Exterior. This approach is difficult to do on a national basis, but we continue to work on it.

Next, we must recognize there are varying business models that have emerged in the last 30 years emphasizing different experience factors to better engage the consumer. Therefore, we analyzed several of these models and the performance of the participants.

And finally, we looked at the rationale for each of the Power 50 factors. Figure A graphically presents the rationale for each of these factors.

The Klout Score measures the social media presence of a retailer. It is a surrogate for Brand Awareness. The Alexa Score is a relative ranking of visitors to a retailer’s Web site. This is a measure of both brand awareness and the effectiveness of a retailer’s Advertising and Promotions. The Market Share measures a retailer’s performance in securing the sale when compared to a retailer’s opportunity for a sale in the markets that retailer serves.

There are many areas to be challenged not only in the weighting of the factor, but also in the factors themselves. While everyone wants to be No. 1, the point really is to measure current performance and to determine how to improve that performance. I welcome your comments as we make the Power 50 a benchmark to be considered.

A Happy Ending

By Sheila Long O’Mara

During this holiday season of peace, joy and thankfulness, I’ve been fortunate enough to stumble upon one of the most incredible journeys into the furniture business that I’ve come across in some time. Here in Columbia, S.C., no less; right under my nose.

It’s the perfect backbone for a book. There’s strife. There’s true love. There’s crime, and there’s a good bit of struggle.

Also, woven through the story are elements of human nature that make us all warm and fuzzy inside when they are revealed. Kindness; generosity; faith; courage and good ol’ fashioned hard work and tenacity.

And, for us, it has furniture and retail and success. Darby Hiott is the owner and founder of Beds & Such in West Columbia, S.C., a one-store operation that in the last two years has taken hold in a market filled with interior design studios, big box retailers and a few independent home furnishings retailers.

Darby opened the store in 2011 shortly after marrying his wife and partner Lori. Typically, the opening a small, family-owned furniture isn’t the thing great books are based on, but Darby’s journey along the way to Beds & Such is just shy of remarkable. Prior to the store and before meeting his wife, Darby had fallen on tough times. He’d had some experience in the business when he worked at a large furniture store here in town. Times got hard, and Darby was out of work, out of money, out of food and out of his home.

More times than not, Darby found food from fastfood dumpsters. He wore holes in the only pair of shoes he owned. He was pretty much down and out, but he’ll tell you his faith helped him pull himself back up. He landed a job at a local furniture store—the store where he happened to meet his now wife, who just happened to be shopping for a big girl bed for her daughter. Fate; kismet; destiny. The two were meant to be together. Misfortune struck again on the couple’s wedding day when Darby lost his job at that store. Through much consideration, prayer and support from his new mother-in-law, Darby and his new bride put together a plan. A plan to create a family-owned furniture store.

Today, that plan has come to fruition. The work, the effort, the passion—all have come together in Beds & Such. The Hiotts work in tandem with one another and their team of employees to help customers furnish homes throughout the Midlands of South Carolina. A wonderful twist of fortune. The man who was once homeless is now helping people furnish their homes.

Now that is a happy ending.

Here’s wishing all a peaceful and bright holiday season filled with an abundance of love. I look forward to the year ahead and I’m excited about what 2014 holds for the home furnishings industry.


Eight years ago, South Florida retailer City Furniture had come far from its beginnings as a waterbed retailer in the 1970s, evolving from a specialty store into a full-line home furnishings powerhouse in the highly competitive South Florida market, concentrating on value pricing and bringing services such as one-day delivery to customers ranging from Key Biscayne, up the Atlantic Coast to Stuart, and west to customers in Fort Myers and Naples.


That was when the Tamarac, Fla.-based retailer began another transformation that’s coming to fruition this year. The process involved renovating the brand through revamped stores and bright footprints at new locations, a move toward more upscale and unique product, and national-quality advertising that projected emotional appeal—plus attention to detail on all consumer touch points to carry through on that brand promise. And now, City is set to open its first stores in Central Florida this month, two locations in The Villages shopping area, which lies between Orlando and Ocala. What commands attention here is that City was doing all this during a period when a lot of its retail counterparts were retrenching or going out of business. At City Furniture, an investment that President Keith Koenig said is well above $100 million reflected a faith in its markets, the business model it envisioned, and its team.

Koenig sat down with Home Furnishings Business during the October High Point Market and later on the phone to discuss his company’s direction and how it pointed itself that way.


“We have fundamental belief in our business model, our team and our marketplace,” he said.

That team has leadership from old hands with a sense of the company’s roots, but also has an infusion of fresh faces with bright ideas that City goes out of its way to find. City actively recruits among colleges for sales management trainees, but while it goes to great lengths to find fresh talent, City’s core executive group has been together for a long time.

Mike Lennon, senior vice president of marketing, and Koenig have known each other since sixth grade and roomed together in college—they came on board in 1978. Garry Ikola, senior vice president of sales, has been with the operation since its days as a waterbed retailer, joining in 1973.

CFO Steve Wilder came on board in 1980; Senior Vice President of New Markets Curt Nichols and Vice President of Human Resources Janet Wincko have 20 years in the company, Vice President of Finance Kevin Riggott, 10 years; and Andrew Koenig, Keith’s son and managing director of operations, grew up in the business.

“We have experience, but also a young team, and they’re ready for the responsibility of working new stores,” Koenig said.


In 2005, City decided it needed to make a deeper connection with consumers in the markets it serves. “Our real estate, our brand wasn’t where we wanted it to be,” Koenig said. “Too much of the industry is transactional. The customer wants to be emotionally connected to the furniture in her home and the brand she buys from.

“The goal has to be a real emotional connection with that consumer that essentially gets her to prefer our store to any other—who we are, what we do, and why it matters.”

The questions were: Where does City want to be? How does it build an emotional connection, a brand that makes consumers want to choose its stores?

“From that, we wanted to build all the touch points,” Koenig said. “We put the most investment into the stores, but we also put a lot of investment and time into the Web site.

“We had to learn how to shoot world-class photography that competes with the best online merchandisers in home furnishings, the Crate & Barrels, the Restoration Hardwares—and we had to do it at a lower price. That’s those others’ Achilles heel.” Television ads, which can be viewed on City Furniture’s Web site, were remade to resonate on emotional levels with the consumer and connect in a way that made her want to come to the retailer’s showrooms.

“The brand, whether it’s in an ad or the Web site, has to be aligned with every touch point in that customer relationship—store appearance, delivery, you name it,”

Koenig said. “That relationship is very fragile and has to be nurtured. “To do that, first, we’ve invested in our stores to create the shopping experience that’s consistent with what she’ll find appealing.”

On the Web site, City invested in new architecture, and in its own photography. “It’s not enough just to throw a manufacturer’s shot up there,” Koenig said. “Our television ads are shot in beautiful South Florida homes. Our advertising is national quality.”


This year, City Furniture added Bernhardt as its primary high-end vendor. “We have Bernhardt galleries in all City stores now,” he said. “Bernhardt is the best fit for us at the high end for value and service.”

Those galleries range from 3,000 to 4,000 square feet. Since the first opened in March, the galleries already produce high dollars per square foot, Koenig said.

“It definitely opened some new doors for us and created a favorable shopping experience for our customers, whether or not they’re a Bernhardt customer,” Koenig said. “It makes everything look better.

“It fits what we want to do as a brand—fashion forward, beautiful furnishings, many of which people can’t find anywhere else.” That last part of City’s brand equation—really more than any cost savings—is what’s driven its extensive sourcing and manufacturing of private label product. In addition to its proprietary Kevin Charles upholstery line, the retailer sources exclusive case goods overseas; and works closely with key domestic vendors on product development.

Koenig credited Lennon and his team with helping City offer unique product to customers. “He’s the genius behind all our marketing, merchandising and branding,” Koenig said. “He’d put all the credit on his team, but he’s the leader.

“Mike’s developing more and more proprietary product that fits what our customers want, and to work with our vendors on that product. It’s not about saving the last nickel, it’s about getting what the customer wants.”


“What the customer wants” also means pulling out waste in the process so there are no unnecessary costs. “If we’re over-priced on any item, she’s going to know it, and that doesn’t add to our brand, which is quality furniture at an outstanding value, and in many cases, something she can’t find anywhere else,” Koenig said. “The operational logistics have to be place in order to deliver on all of that brand promise, not just one or two parts.”

Recycling and energy efficiency are part of that cost cutting equation. City has recycling programs for a huge amount of its packaging and paper, and it has broken ground among furniture retailers in making its stores environmentally friendly. “We just completed our sixth LEED-certified furniture store,” Koenig pointed out. LEED, or Leadership in Energy & Environmental Design, is the U.S. Green Building Council’s standard for energy efficient building design. City also is considering transitioning its truck fleet to operate on compressed natural gas; and Kevin Charles upholstery uses soy-enhanced cushioning. “We aren’t ‘tree-huggers,’ but it’s the right thing to do balanced with business sense,” Koenig said.

Meanwhile City’s transformation nears completion—and further enhancement. “At Cutler Bay, we bought the land next door to an existing location—the old store didn’t meet our new standards,” Koenig said. “With the completion of our Cutler Bay showroom in Miami, all our stores are now in the right location, and the right size and have the right merchandising.” HFB

City Furniture at a Glance

Homebase: Tamarac, Fla.

Store Stats: 11 City Furniture stores totaling around 750,000 square feet; and 11 Ashley Furniture Homestores with around

300,000 square feet serving greater metro Miami and South Florida Atlantic Coast; and Naples/Fort Myers.

Other Holdings: 800,000-square-foot, high-cube Fort Lauderdale-area warehouse serves all locations except new central

Florida stores with same-day delivery.

Future Plans: Set to open two stores in early November in The Villages, located between Orlando and Ocala.

Key Vendors: Kevin Charles Upholstery, Cheers, Bernhardt, Serta, Casana, HTL, Lifestyle, Steve Silver, Idea Italia, Natuzzi.

Web site:

Key Management

Keith Koenig, president

Mike Lennon, senior vice president of marketing

Garry Ikola, senior vice president of sales

Steve Wilder, CFO/CIO

Kevin Riggott, vice president of finance

Curt Nichols, vice president of new markets

Andrew Koenig, managing director of operations

Janet Wincko, vice president of human resources

Dave Francis, managing director of City Furniture Lean Conversion Office.


A Look at City Furniture’s Markets

Furniture kept expanding during an economic downturn, and a big reason is faith in its markets’ future.

“The economic data clearly shows housing will be on a growth track for the next few years,” said City President Keith Koenig. “We’re looking at 900,000 new home starts in ’13; 1.1 million in ’14; and 1.4 million in ’15.

“We’re seeing it on our South Florida market after several years of a really challenging housing environment. The demographic trends for Florida are going to be solid. You’ll still have baby boomers moving to Florida. We have a favorable economy, and I think the state will outperform the rest of the country. All that makes us very confident in investing in the future.”

Stuart, Fla., City’s northernmost location, opened in 2005, is a fair drive from Miami, but is still part of a whole.

“It’s really part of the Southeast Florida metro area,” Koenig said. “There are 6 million people in multiple (greater metropolitan areas) and television markets, but they’re all easily serviced with same-day delivery out of our Fort Lauderdale/Tamarac distribution center. Past that you really can’t do same-day.”

There’s a lot to be had there.

According to Home Furnishings Business research, City’s East Coast markets are projected to total more than $1.1 billion this year; and around $400 million in the Gulf Coast markets it serves.

While City is expanding into Central Florida at The Villages between Orlando and Ocala, the retailer is holding off on same-day delivery there—for now.

“Our long-term vision is to have stores in Tampa, Orlando and all across Florida,” he said. “The Villages is the first step, and it was a little earlier than expected … Eventually, we’ll make the investment in local distribution centers.”

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