Monthly Issue
From Home Furnishing Business
December 4,
2014 by in Retail Snapshot 
By: Powell Slaughter
John Loecke and Jason Oliver Nixon are bringing design chops honed during two decades in New York to bear in a home furnishings retail concept in High Point that looks to blend a distinct style aesthetic with a whole lot of fun.
Madcap Cottage Design Laboratory held its grand opening during October High Point Furniture Market in a former pharmacy off North Main Street. The store might be new, but the partners have developed a strong resumé not only in interior design, but also in curated vintage and antique finds available through e-commerce sites such as One Kings Lane and 1stDibs.com; and a line of bedding, window treatments and pillows at HSN.com.
Loecke and Nixon also appear regularly as design experts in print and on television.
The two chose High Point for its proximity to a huge array of showrooms that give Madcap customers access to lines not on the floor; and the abundance of skilled craftsmen—many of the accessories in the 2,000-square-foot storefront are produced locally.
CHANGING WITH THE TIMES
Loecke and Nixon founded their interior design firm, Madcap Cottage, 10 years ago. The online partnerships, and now Madcap Cottage Design Laboratory, grew from the partners’ reaction to the recession’s impact on any business related to the home.
“In 2008, we looked at what was what was going on and realized we needed to diversify into multiple revenue streams,” Nixon said. “As the landscape was changing and the economy was slowing, we wanted to make sure revenue was coming in and not be reliant on a single source.”
The team “got in early” he said, at One Kings Lane, where they’re on their 15th curated collection with the flash-sale site. Those efforts reflect the style sense and atmosphere Loecke and Nixon aim to bring to their retail storefront.
“These were products we found all over the world that we tweaked to our style with new fabrics and finishes,” Nixon said. “It’s sophisticated fun, traditional with a twist.”
Here’s how the Madcap Web site describes it: “Imagine a British country house that pairs Granny’s antiques and a spirited dash of Chinoiserie chic with a soupçon of Morocco-meets-India élan. Shake, stir, then pour.”
HAVING FUN, TELLING STORIES
Loecke and Nixon have a lot of fun in their work, and that’s the atmosphere their store projects.
“Decorating shouldn’t be stuffy and serious,” Nixon said. “It’s for rooms you live in—we emphasize pattern, color and a sense of whimsy.
“We’re creating our ideal of interior design, and why can’t it be retail? That’s where we’re moving.”
The store also reflects the experience of curating collections at sites such as One Kings Lane. Ninety percent of the furnishings in the High Point store are “tweaked” vintage pieces.
“These are one-offs,” Nixon noted. “Nothing is mass produced.”
There’s plenty of local talent to help with that tweaking, and also produce accessories such as dog leashes (the partners own three rescue dogs) for the store—all one of a kind items.
“You’re buying our view of the world—we’re storytellers,” Nixon said.
Telling those stories is where Madcap differentiates itself.
“What makes us different is that from years of working with design clients, we’ve found that people want a story,” Loecke said. “They want something more than ‘Oh, this is pretty.’ They want to be able to tell people ‘This piece came from Turkey.’ They want the background behind the pieces. … We’ll show them how they can work it into an existing setting.”
While the store is full of one-of-a-kind pieces, Madcap Cottage has long partnered with companies such as Century and Baker on projects. The partners’ access to vendors’ showrooms was a driving factor for setting up their retail operation in High Point.
“While we don’t necessarily stock those furniture lines on the floor, we have access to them through our design arm,” Loecke said. “We take people through the process of mixing in a piece from Baker with other lines—we don’t do a home in a single collection. A home shouldn’t look like a furniture showroom or a Restoration Hardware catalog.”
For a day rate, the partners will take customers shopping in High Point showrooms.
“Those are such amazing resources,” Nixon said. “You’ll see more Baker furniture in High Point than you’ll see in any showroom around the country.”
SPREADING THE WORD
Madcap Cottage Design Laboratory’s advertising strategy also is unique—it doesn’t.
“We’re lucky enough to get a lot of exposure through our book publishings and being referred to as design experts in magazines and on television,” Loecke said. “I’m on a local segment every Friday on WGHP Fox-8 (the High Point Fox affiliate). We’ve had a lot of international press as far away as China. We have a strong following in High Point, but also in Europe and the U.K.
“This is a High Point business, and we’re delivering to customers here. But this week we also shipped to Tennessee.”
Madcap’s approach is a natural for social media, and the partners have developed strong followings on Facebook, Instagram and Pinterest. While they don’t advertise they are constantly thinking about marketing.
“We’re all about engagement, and we’ve developed regional, national and international relationships,” Loecke said.
Domino magazine, for instance, hosted Madcap Cottage Design Laboratory’s grand opening party the Sunday evening of October Market.
“Sunday turned out to be a night that it seemed everyone was doing something, but we had a great turnout,” Loecke said. “We were supposed to run 5 to 7 p.m., but ended up open till 11:30. We had around 250 people.”
AHOY, E-COMMERCE
In late November, Madcap Cottage launched its own e-commerce platform in addition to the business it’s done for years at other sites.
“On our site, you’ll find all the things that round out the design experience in the store,” Loecke said. “We’ve been selling on One Kings Lane and 1stDibs now for the past for years, and customers can access those lines through our site as well.”
That e-commerce site will reflect the High Point store’s merchandising approach and will change constantly.
“We call the High Point location a ‘design laboratory’ because there’s always something happening,” Nixon said. “The store changes completely every month. You’re always walking into a space where something is new and different.
“Retail often reaches the lowest common denominator, where there’s nothing aspirational. Ours is an idea of surprise and discovery—give the lady what she doesn’t know she wants.”
LOOKING AHEAD
Loecke and Nixon are working right now on their fourth book, which focuses on bringing the “fun factor” back into decorating. Along with national and international press exposure as design experts, the books and social media activities should continue to raise the partners’ profile.
They’ll also look to new partnerships for growing the business.
“I see a fabric line for sure in the next year,” Nixon said. “We’ll be announcing that not too long from now.
“I also see a furniture license happening with a national retailer that has a brick-and-mortar presence.”
Loecke said partnerships with furniture and fabric companies will give Madcap a presence in other retail spaces.
“We won’t be opening stores coast to coast, and that’s part of our vision for retail,” he said. “One problem with a lot of retailers is that it isn’t special anymore—you have a Pottery Barn everywhere, and it’s a lot different than when there were only a couple of locations.
“We don’t want to lose that quality of being special. People can shop us online without coming to High Point, but if they come to High Point, we’ll be a destination.”
December 4,
2014 by in Furniture Retailing, Industry
This month's Take 5 poses a few big-picture questions for Ethan Allen CEO Farooq Kathwari. With stores and operations across the world, we thought he'd have a good "global" view of what's coming up next year.
Home Furnishings Business: Are you a Bull or a Bear when it comes to next year's industry forecast? Explain.
Farooq Kathwari: I am an optimist by nature, and I am cautiously optimistic about the industry in general.
The road out of the Great Recession has been a journey of slow but also steady progress. Regardless of which way the economy swings, however, I see a bright green light for Ethan Allen. We are currently introducing hundreds of new products we call The Next Classics that are doing very well with our core clients and also a new generation of shoppers.
We have revamped our online and in-store retailing experiences. We have built upon our unique, vertically integrated business model that has always delivered exceptional quality and value by bringing even more of our manufacturing back into our North American workshops. We are updating and right-sizing our domestic design centers, and taking our message and retail footprint to more and more markets internationally. Ethan Allen is America’s classic design brand, and that’s a timeless idea that travels well, especially today.
HFB: What is the one thing that could make or break next year for the furniture industry?
Kathwari: I don’t think there’s any such thing as one event that makes or breaks an entire industry, whether it’s ours or anyone else’s. The smart players will always anticipate and adjust to change.
Consumer confidence of course is an important criterion we look at. When it's negatively impacted by domestic or international issues, it holds people back from discretionary spending. Having said that, people are impacted, but with so much negative news, they pay attention, but not as much attention.
HFB: Is there anything you've seen on the global economic horizon that the furniture industry should worry about in 2015?
Kathwari: The era of globalization and commoditization has impacted our industry in the last 12 to 15 years. I believe that major changes include more balancing of sourcing.
We are focused on consolidating more and more of our manufacturing back here in North America, building on our strength as America’s classic design brand.
Global events also relate to consumer confidence. We're confident, though—right now we have 73 locations in China, and in a few days I'm going to the opening of another (Ethan Allen) Design Center in Dubai.
HFB: What kind of reputation do U.S. businesses have around the world?
Kathwari: The reputation is mixed.
On one hand, American business has created major innovations in many areas and has established great operating precedents to follow. On the other hand, short-term focus of being a public company is viewed as not helping create long-term growth. America also reflects in its diversity the microcosms of the world, which brings ideas and people to America.
All in all, the reputation of American business is good, and that's because of innovation. At Ethan Allen, we've set up operations in Mexico and Honduras, where we established similar environmental and safety standards to those we use in the U.S.
But if you move from country to country to country to get an advantage, the people there start to think you're just a mercenary.
HFB: We're coming out of a contentious mid-term election that tipped the scales in the Republican party's favor to a level we haven't seen since 1994.
Conventional wisdom says election season is bad for retail, but now that this one is over, do you have any thoughts on how the results from Nov. 4 will affect consumer appetites for home furnishings?
Kathwari: I am glad the elections are over, as major and consistent negative advertising impacts on consumer attitudes and confidence. I believe consumers understand home is a “haven” from all the turmoil of the world and to have a happy and a beautiful home is a “luxury” they cannot afford to miss.
The national mood reflects a great desire for the political bodies and executive branch to solve problems rather than work against each other.
December 4,
2014 by in Furniture Retailing, Industry
Welcome to the fourth annual Home Furnishings Business Power 50 retail ranking. The retail ranking — our take on how retailers should be ranked — takes into account retail sales volume, social media and market share. This year we made a few changes to better reflect overall performance.
With regard to social media, rankings are influenced by Klout subscribers. If a retailer wasn’t a Klout subscriber, we used Facebook likes and Twitter followers as the criteria. This year, we replaced the popular vote with industry involvement in associations like the National Home Furnishings Association, buying groups like Furniture First or Furniture Marketing Group, as well as organizations like the Furniture Hall of Fame.
We also broadened our net this year by expanding our sample from 1,000 retailers to more than 4,000 retailers under consideration. We expanded our pool by tossing in our subscribers, as well as subscribers to our sister company FurnitureCore and other industry entities.
Information on social media resides in the public marketplace; that’s where that data came from. Retail sales are pulled from industry data and public filings where applicable. We promise we did not use proprietary client information to create the rankings.
Enjoy the lists.
1 RC Willey Home Furnishings Salt Lake City, Utah
2 Nebraska Furniture Mart Omaha, Neb.
3 American Furniture Warehouse Englewood, Colo.
4 Hill Country Holdings New Braunfels, Texas
5 Art Van Furniture Warren, Mich.
6 Raymour & Flanigan Liverpool, N.Y.
7 Gardner White Furniture Co. Auburn Hills, Mich.
8 Mathis Bros. Oklahoma City, Okla.
9 Lacks Valley Stores Pharr, Texas
10 HOM Furniture Coon Rapids, Minn.
11 Rotmans Furniture & Carpet Worcester, Mass.
12 Steinhafels Furniture Waukesha, Wis.
13 Ikea Conshohocken, Pa.
14 Big Sandy/Pieratt’s Franklin Furnace, Ohio
15 Jerome’s Furniture San Diego, Calif.
16 Grand Home Furnishings Roanoke, Va.
17 Levin Furniture Greensburg, Pa.
18 Johnny Janosik Laurel, Del.
19 Wolf Furniture Bellwood, Pa.
20 Jordan’s Furniture East Taunton, Mass.
21 Rooms To Go Seffner, Fla.
22 Miskelly Furniture Jackson, Miss.
23 Sheely’s Furniture & Appliance North Lima, Ohio
24 American Home Showplace Dalton, Ga.
25 City Furniture Tamarac, Fla
26 Broad River Furniture Charlotte, N.C.
27 El Dorado Furniture Miami, Fla.
28 Slumberland Little Canada, Minn.
29 Weekends Only St. Louis, Mo.
30 Sam Levitz Furniture Tucson, Ariz.
31 Wayside Furniture Akron, Ohio
32 Cardi’s Furniture/Matt ress Plus Swansea, Mass.
33 Gallery Furniture Houston, Texas
34 Royal Furniture Memphis, Tenn.
35 Ashley Furniture HomeStore Arcadia, Wis.
36 Kane’s Furniture Pinellas Park, Fla.
37 The Old Cannery Furniture Sumner, Wash.
38 Olum’s Vestal, N.Y.
39 Dufresne Spencer Goup Memphis, Tenn.
40 Bernie & Phyl’s Furniture Norton, Mass.
41 Home Furniture Lafayett e, La.
42 Walker Furniture Las Vegas, Nev.
43 Bob Mills Furniture Co. Oklahoma City, Okla.
44 Mor Furniture for Less San Diego, Calif.
45 Furniture Enterprises of Alaska Anchorage, Alaska
46 Bob’s Discount Furniture Manchester, Conn.
47 Woodley’s Fine Furniture Longmont, Colo.
48 Gardiners Furniture Baltimore, Md.
49 Story & Lee Furniture Leoma, Tenn.
50 Morris Furniture Fairborn, Ohio
December 4,
2014 by in Business Strategy, Industry
By: Sheila Long O'Mara
As we tie the bow on the last issue of 2014 and eagerly look forward to 2015, I have to say I’m feeling a bit nostalgic. It’s an odd, overwhelming feeling for a sometimes leather tough one like me.
The husband just gives me a funny look. The boys? Well, they dish out a lot of hugs, and toss out hilarious quips about off-the-wall subjects that ensure a cacophony of laughter. Mostly, however, the family—all with the attention span of gnats—grins and graciously puts up with all of my remember whens.
I don’t think I’m all that different than many other people, consumers if you will, who are looking to freeze a snapshot of their family’s history. Their family’s story.
Walking through our home and stepping through the threshold of any room, I spy something—sometimes several somethings—that trigger beautiful memories from years past.
My grandparents’ four-poster bedroom suite, a gift to me from an aunt who knew it was an important part of my history growing up lucky enough to have grands living close by. That bedroom group, now lovingly tucked away in our guest room, can awaken memories of early Saturday morning snuggles with my MaMa while my PaPa cooked a big ol’ country breakfast. Millions of books were read and countless teeth were pulled all while sitting on that bed in that very sunny room.
The cozy club chair that resides in our den by the hearth has held me while I held little ones safely through many long nights of sick cuddles. You know the ones I’m talking about—those 1 a.m. wake-up calls from high fevers. The nights requiring all-nighters not only for the child’s comfort, but also for the parent’s peace of mind. The chair, by the way, has been reupholstered several times now, but the memories, along with the springs, remain.
There are old quilts made for very young me by my other grandmother, pictures and a slew of tangible items. The cast-iron skillet and the old cookie press, both of which have survived a few generations. All of those treasures are intermingled with newer home furnishings, each with a story of its own. Sofas where all five of us jockey for his favorite spot during movie nights. The dog’s favorite rug, and the youngest one’s spot curled up right next to her. The lamps that share warmth and light on a winter’s eve.
Homes help create memories for families. Home furnishings help turn houses into homes for those families. Our industry has that much power!
As we wrap up the year and set our sights on the next year’s goals and promises, that power is an interesting nugget to keep in mind.
Happy nostalgic holidays to all of our readers, and here’s to a beautiful, prosperous next year.
December 4,
2014 by in Business Strategy, Industry
By: Bob George
The appointment with your certified public accountant is still several months away. Your friendly banker’s annual meeting is also in the future. Therefore, your business resolutions are a matter for you and your personal business goals and objectives.
The month of December is probably budget time. More than likely, working from your financials, the chart of accounts has been transferred to a spreadsheet with your controller applying his or her best judgment for the expense items. The critical decisions regarding salary increases and topline (revenue) increases have been left for your final input. The forecast contained in later pages of this Home Furnishings Business issue may provide some guidance. Most likely the resulting bottom line will be quite similar to what you achieved last year.
Why?
Because you want a realistic budget. That’s why.
Now, finally, we get to those resolutions. Spreadsheets are wonderful tools that allow you to play the “what if” game. Increasing revenue by 15 percent; improving gross margin by two points; reducing sales expense by two points; reducing warehousing/delivery by two points; reducing general and administrative by two points – all of these actions will cause a significant change in your bottom line.
The question becomes, “How do I make these actions more than the manipulation of a spreadsheet?” The answer requires the resolve to change not the numbers, but the people, process, merchandise, and retail experience. What gives you the resolve to make these resolutions and then stick to them? First, you must know that they are achievable when compared to industry standards of good performance. You may then reinforce this by participating in a dialogue with a peer group. This group’s past experiences often can guide you in evaluating your current situation. Next, establish metrics that you monitor weekly, monthly, and quarterly. Understanding the impact of each metric is essential.
What causes the metric to change? It is simple, but you must change the metrics. The starting point is a resolution followed by hours of execution. I hope you find inspiration and input from the pages of Home Furnishings Business.
Contact us if you need encouragement.