From Home Furnishing Business
When you think of major U.S. markets, your eye might gravitate toward the seaboards. The Minneapolis region, home base for HOM Furniture, might be a familiar name across the country, but it remains among the nation’s metropolitan areas second tier.
That doesn’t mean it’s a dull market for home furnishings retailers.
“I am not going to lie—business has been challenging and it always will be,” said Kyle Johansen, merchandising manager at Coon Rapids, Minn.-based HOM. “No one is going to just lay down and let us take their market share. We have a lot of very tough competitors who keep us on our toes every day. Everyone is here and Minneapolis is only the 16th-largest market in the U.S.”
The region’s home furnishings retailers include Ashley, Slumberland, Schneidermans, Becker Furniture World, Macys, Mattress Firm and Ethan Allen—as well as lifestyle retailers such as Pottery Barn, Restoration Hardware, Room and Board, Crate and Barrel. Don’t forget the big box guys in the game now such as Menards, Costco, Target, Big Lots and Ikea.
“Did I mention the online retailers like Wayfair and Hayneedle?” Johansen said. “We are always looking to keep our showrooms unique with fresh assortments and staffed with great, engaged people to compete with all those other outlets for furniture.
“Since we offer sofas from $267 to $20,000, everyone is our competitor. We do not have the luxury of being a niche store who only has to beat others selling, for example, high-end contemporary or low-end RTA.”
You might not have been there, but you’ve heard of Minneapolis—you’ve probably heard of HOM Furniture, too. The retailer has prospered in the upper Midwest through developing its namesake stores for appealing to the specific markets they serve; spreading its reach into upper price points through acquisition (Gabberts); and acting on retail trends that scream “value” to consumers (Dock86).
Now, HOM operates 15 namesake showrooms; three Gabberts Design Studio & Fine Furniture showrooms; and two Dock86 showrooms in Minnesota, Iowa, North and South Dakota and Wisconsin. Those combined for 2013 revenue approaching $216 million.
Starting Small, Ending Big
HOM Furniture’s roots go back more than 40 years to 1973, with the founding of JC Imports. Wayne Johansen (Kyle’s uncle) opened a small wholesale and retail import gift business in partnership with his uncle and mentor, Bill Christensen, who’d been paralyzed in an accident at age 19.
The two would drive down to Mexico, where Christensen found affordable treatment and his nephew found affordable merchandise and jewelry
In 1979, a friend convinced Wayne to convert one of his retail gift shops into a waterbed retail outlet, The Waterbed Room, which soon became the largest retailer of flotation sleep products in the upper Midwest.
Recognizing the need to expand product lines to capture greater market share, two HOM Oak & Leather showrooms opened in 1990. In 1993, to expand customer reach, all Waterbed Room showrooms were converted to Total Bedroom showrooms, along with further expansion of HOM Oak & Leather.
In 1996 HOM Oak & Leather and Total Bedroom were merged into one entity, HOM Furniture, making HOM a complete full-line furniture retailer.
The business continued to grow, and in 2008 Wayne, his brother, CEO Rod Johansen (Kyle’s father) and COO Carl Nyberg forged a deal to purchase high-end Minneapolis retailer Gabberts Furniture.
“The aspiration was to open Gabberts gallery stores across the upper mid-west to expand the brand in multiple markets,” Kyle Johansen said. “Today there is a Gabbert's gallery in Sioux Falls, Sioux City, Fargo, and opening in 2015 a second Minneapolis location.”
In 2009 HOM was on the move again and acquired Seasonal Concepts, one of the largest specialty outdoor and Christmas businesses in the country; merged the concept into HOM’s full line furniture stores and branded the department "HOM Seasonal Concepts" in every HOM Store.
2010 brought another year of brand extension as HOM opened a new concept showroom called "Dock86," playing off the "weekends only" and "The Dump" approach of offering high value with no frills and only open four days a week. A second location was opened in 2013 in Minneapolis adjacent to a new HOM showroom.
Filling the Floor, Selling the Product
HOM includes multiple brands (see Sidebar: Brand Extensions), but it seeks to tell distinct stories even on its namesake floors.
“Merchandising is a key component of any furniture showroom and we put a lot of time, money, and thought into how our showrooms layout from a sense of product flow as well as how vignettes are created and where our galleries are located throughout the store,” Kyle Johansen said. “We don't want every HOM Showroom to look exactly the same, so each HOM store will provide a different, yet similar, experience.
Each HOM showroom has its own design team of visual merchandisers, who get full authority to put whatever lamp, rug, cocktail table, and accessories in each vignette they choose.
“Even though all the product is the same it's offered in a different way in each showroom,” Johansen said. “These teams often meet together to share best practices and bring ideas to their stores.”
How would you like customers to cross-shop your floors if you have multiple storefronts?
“We often hear from customers they have a ‘favorite’ showroom they like to shop as well as customers who will shop multiple HOM locations,” Johansen said. “Our merchandising team consists of over 30 designers between all the stores and our corporate team. The HOM Stores are unique in the sense that we do a combination of gallery plus departmental sales.
Those galleries include "Fine Furniture" (higher-end lifestyle), "Seasonal Concepts" (outdoor and seasonal), "Uptown" (reclaimed, vintage, eclectic), "Amish Craftsman" (all Amish-made furniture), "Sleep Express" (mattresses), "Lodge" (rustic lodge cabin-style furniture made in Minnesota), and "Bargain Shop" (entry level price points such as $267 Sofa),
“We have a great group of buyers and merchandisers that make the showrooms pop and look fantastic,” Johansen said. “Our corporate merchandising teams visit the stores weekly to ensure everything is in perfection. They often ask us what the standard is. and we always say you need to look like the "Best HOM Store" you cannot compare yourself to a local competitor that perhaps has a low standard for merchandising or a low standard for store cleanliness.
“Our experienced buyers travel all over the world to get the best products at the best prices to give our customers the best value. Besides the U.S., we buy from Europe, Mexico, China, Vietnam, Malaysia, India, and Pakistan.
Beyond product, HOM emphasizes training for the people encountering the shoppers.
“We have a very talented group of stores sales associates that make a huge difference,” Johansen said. “No one wants to buy furniture from someone who says ‘Ya, this is a good brown couch and its cheap.’ We do extensive training with our sales teams before they even see the retail floor.
“Then they get further support training several times a year from our corporate sales trainer as well as buyer training, sales managers, and of course training by our mfg representatives. We even have a ‘HOM University’ online that everyone must enroll and pass.”
Telling Several Stories
Each HOM store has its own identity, logos, music, color scheme, and marketing approach based on the customers it targets.
“So, between the big three (brands) we are creating three different marketing campaigns each month,” Johansen said. “To make matters more confusing, each brand has sub-galleries, such as in Gabberts case Stickley; in HOMs case Uptown, Sleep Express, Amish, Fine Furniture, and Seasonal Concepts.”
He praised the efforts of Marketing Director Jerry Underwood and HOM’s internal marketing team for handling that array of messages.
“We shoot a lot of our own photography as well as TV commercials; and we do that internally, along with all the post production and editing work,” Johansen said. “We also do our own Web sites internally which is a huge undertaking by our buyers, and marketing and IT Teams. We have a social media manager who works solely on our Facebook, Pinterest, Twitter, and Houzz accounts.
“We even have our own media buyer who negotiates our TV commercial rates and placements in all of our markets.”
Full, 24-page Sunday go into local newspapers; and HOM also incorporates electronic bill boards, radio, magazine, and other forms of online marketing into its messaging.
“When we launched Dock86 we even wrapped the Minneapolis Light Rail transits and buses with our logos,” Johansen said. “Due to the huge amount of marketing we do its hard to put your finger on the most effective tool. We believe it’s a combination of everything that gets the word out about our brands and what is going on and why they should come in to buy today.”
Johansen believes HOM in a great position to grow all its brands into current markets and expand into new ones.
“We are very fortunate to be in a strong financial position to make moves when they present themselves, and our ownership has the vision to see around the corner,” he said.
Look for the Internet to play a greater role in the business.
“Whether its Amazon, Ashley, Wayfair, or Target.com they are all investing very heavy into their online capabilities and as consumers get more comfortable shopping (and buying) online that medium will continue to play a critical role in our industry,” Johansen said. “I do not think the Internet will take the same market share in furniture that it has in electronics but it will continue to grow at a much higher pace then the rest of the industry.“The Internet is absolutely critical to the future of our business. We’ve hired a whole team of Web designers and programmers who know the systems and the language.”
In late November, the store launched a new version of HOMFurniture.com that looks to optimize online customer service and e-commerce capabilities.
“Our long-term strategy is to do more nationwide selling and shipping, but our goal today is to support our existing customers who might want to purchase online,” Johansen said. “They can schedule a delivery or store pickup, too.”
While HOM’s delivery routes extend across multiple states, Johansen said the retailer is in no hurry to build out its e-commerce efforts further afield.
“If someone want’s a lamp in California, we can do that, but we aren’t ready yet for national shipment of a bedroom set,” he noted. “For now, we mainly want to give the (e-commerce) convenience to our local customer.”
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.”
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.”
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.”
Clive and Daniel Lubner didn’t sit on their hands after failing to acquire rights to the Robb & Stucky name after the retailer liquidated in 2011.
Clive Lubner had built the Fort Myers, Fla.-based operation into a $280 million paragon of high-end home furnishings retailing before a credit crunch led it into Chapter 11, then closure. But by October 2011, the Lubners were back in business in nearby Naples, Fla., with a new model, Clive Daniel Home.
Originally, the Lubners hoped to find an enterprise buyer, retain rights to the Robb & Stucky name and continue on.
When that fell through, they took a different tack.
“We continued to speak to potential investors to re-establish the company,” said Daniel Lubner, CEO. “During that time, we rebranded our hospitality business as the Lubner Group. We had several large projects that we continued to work with. That allowed for immediate cash flow and the confidence to bring in our merchandising team. By May 2011, we’d brought in our top five merchandisers (from Robb & Stucky) and made plans for a new store in a location to be decided.”
The Lubners negotiated taking over the lease for the Robb & Stucky Naples store, which Lubner said was the old retailer’s most profitable market.
A TOTAL HOME APPROACH
“We went about the new store a little differently,” Lubner said. “We decided the market needed a total home approach to design.”
For Clive Daniel Home, the Lubners focused on their traditional strength in interior design, and supplemented that by bringing in specialists for things such as home automation and landscape architecture in order to offer complete, comprehensive services for everything in and around a home.
“We have demonstration kitchens and smart home systems,” Lubner said. “That allows us to walk our clients through what a new construction or complete renovation should look like.”
Clive Daniel Home also does significant business in the contract and hospitality arena, but the retailer segregates those from its residential segment.
“Residential and hospitality are two completely different specialties,” Lubner said. “Instead of having designers straddle the line between the disciplines, we have dedicated staff for each.
“Our focus and philosophy is to take care of one very important person—my designer. If I proved the complete managerial support and logistics, they can concentrate on the project and not get caught up in the minutiae. If we do that, the client will win every single time.”
LEAN AT THE TOP
Starting anew with a single store, the Lubners decided they wouldn’t load up on management.
“We loaded up on merchants,” Lubner said. “We’ve invested our dollars into making sure that the floor is filled with talent.”
Led by Melinda Antonucci, who is also in charge of product placement on the showroom floor, the merchandising and design team consists of six full-time employees.
“We also have an exceptional logistics team. Because of all the support we provide, we have designers who are exceptional at creating an entire design scheme,” Lubner said. “We’ve had clients exceed $1 million on a single project, though we also have excellent clients who buy one item at a time.”
In the store, customers get the high-impact, eclectic appeal that Robb & Stucky was known for, plus a big selection of one-of-a-kind items such as vintage furniture and architectural elements. Lubner noted that Clive Daniel Home is among the sites to see in Naples: “When clients have friends visiting in town, they’ll bring them by the showroom.”
TRUE BRAND ORIENTATION
How does Clive Daniel Home express its total home retail vision in marketing and advertising? By walking to a different drummer for one thing, and a true emphasis on brand building.
“That’s my passion. We’re a little unintentionally counter-cultural when it comes to our branding. There’s no conventional wisdom for us,” Lubner said. “We create 100 percent of our advertising internally. We have our own original photography, and we feature our designers in all our ads.”
Clive Daniel’s approach is to create campaigns, not single ads that talk about percent off on a particular item. Those run in print, glossy publications and on television.
Lubner noted that while many manufacturers do a great job with photography, Clive Daniel’s use of its own shots help set the store apart.
“You might see ads for different stores that show the same photography,” he said. “We’d rather have our own original voice.
“Our branding is truly that—very rarely do we have a call to action in our campaigns. It seems to work for us—we have clients coming into the showroom who recognize the designers we feature.”
Since opening, the business has grown steadily, and so far in 2014 Clive Daniel has been trending 30 percent ahead of last year—June was up 70 percent. Hands-on management has been key to that success. It’s one advantage of starting again with a single store.
“Since the day we opened, Clive and/or I have been in the showroom every single day, working hand in hand with clients and designers,” Daniel said. “We’re fighting it out for every chance of a residential or contract sale. It hasn’t been easy—starting from scratch, manufacturers who’ve chosen not to supply us. It’s been a sea of challenges.”
There’s no shortage of competition in the Naples/Fort Myers market, but the Lubners prefer to concentrate on things within their control.
“We’ve received several accolades mentioning us as the best showroom in the area, but our real focus from day one has been ‘what is the consumer looking for?’” Daniel said. “If we were buying a single piece of furniture or outfitting a whole home, what would we be looking for?”
He also credits Clive Daniel’s service personnel for its success.
“The unsung heroes in our business are our delivery team,” he said. “They were all hand-picked from our previous company. Our drivers are career guys, and they take exceptional pride in making sure the delivery goes smoothly.
“Issue do arise, and when they do, we have who we think is the greatest service individual in the business—Maria Peña. She’s worked with Clive the past 25 years, and she’s a difference maker.”
What does furniture retailing look like to Lubner, and what does that future hold for Clive Daniel Home?
“I’m a bit of a furniture outsider, and I don’t really pay a lot of attention to what others are doing,” Lubner said. “Our future is to continue to focus on our brand, and continue to seek out the best manufacturers. It’s all about the three P’s—product, price and people.”
He also likes Clive Daniel’s positioning, especially when it comes to a large showroom such as the retailer’s 85,000-square foot floor.
“The big boxes either need to be really good at selling low price points, or be proficient at selling complete interior design,” Lubner said. “And the latter is where the vast majority of people will fall short.”
Life after Robb & Stucky
When Fort Myers, Fla.-based Robb & Stucky closed in 2011, it shook up the furniture industry.
On paper, it looked as if the retailer was doing all the right things—beautiful stores, soup-to-nuts design assistance. Home Furnishings Business asked Daniel Lubner, CEO of his and Clive Lubner’s new incarnation, Clive Daniel Home, to discuss what happened, and what they learned.
Lubner didn’t want to go into too much detail, but essentially, Robb & Stucky fell victim to the same thing that sank a lot of retailers in the wake of the recession—lack of accessibility to credit.
“What did us in was a fatigued banking relationship,” he said
In early 2011, the Lubners had hopes of continuing on with Robb & Stucky.
“We were looking originally to save Robb & Stucky. Had we been able to continue in that final year, we would have been profitable,” Lubner said. “We went into Chapter 11 on Feb. 18, and by March the company was being liquidated. Our focus was to find an enterprise buyer and continue the company. We continued to speak to potential investors to re-establish the company.”
The Lubners had hoped to gain the intellectual property rights for the Robb & Stucky name, however, Samson Holdings CEO Samuel Kuo, acquired those and relaunched the brand.
“We ended up losing the rights, which was upsetting, but we’ve always focused ourselves on marketing, and we figured what’s in a name?” Lubner said. “What did Shakespeare say: ‘A rose by any other name is still a rose.’”
Hence, the new Clive Daniel Home brand. They also learned a valuable lesson.
“This new company is private equity,” Lubner said. “Cash got it started, not the good graces of a bank.”
What Keeps You Awake at Night?
Clive and Daniel Lubner started Clive Daniel Home from scratch, and the challenges involved there—garnering vendors, getting the right people in place—made for a challenge.
These days, though, what keeps CEO Daniel Lubner awake at night is when the mental wheels start turning on strategy and building the business.
“That late night when I’m not sleeping is typically when the next great idea for an advertising campaign might come to mind,” he said. “Thinking about new and innovative business development initiatives, that sort of thing.”
One thing not on his mind late at night? The competition.
“My grandfather, who started a furniture business in South Africa, had a saying: ‘Never worry about your competition, because they don’t buy from you,’” Lubner said. “Of all the things we worry about, the competition is not one of them.”
Community commitment, faith in action help Miskelly Furniture ‘Own Its Backyard.’
Beautiful stores, a family friendly environment, strong in-stock position and faith in action have made Miskelly Furniture a go-to destination for home furnishings in Mississippi’s largest urban area.
The family owned business chalked up almost $50 million in sales last year, and an unabashed positioning as a faith-based company—backed up by action— coupled with big showrooms and a wide selection of home furnishings have made Miskelly a powerful local brand in central Mississippi.
Growing Up in Retail
Brothers Oscar, Chip and Tommy Miskelly founded the business in 1978. While the others retain ownership in the store, Oscar is the only one still active in day-to-day business. The brothers grew up in a retail environment and a region dominated by furniture manufacturing.
“Our dad was in the retail clothing business in northern Mississippi,” CEO Oscar Miskelly said. “There’s so much furniture manufactured in Okolona, (Miss.) where we’re from, that we were around that business all our lives, too.”
The brothers had a friend whose family ran a furniture store in Okolona, and they noticed that people came to that location from 150 miles around.
“We wanted to take that concept to a larger metro market,” he said. That market was Jackson, Miss. (See sidebar “A Look at the Market”)
The Miskellys opened their first store, a 10,000-square-foot operation in Jackson, in 1978. The new retailer got a boost the next year when a huge flood had a lot of people looking for new furniture, but the company didn’t expand its footprint much until 1980, when the brothers opened a new 25,000-square-foot—including warehouse—location at the site of the present Roomstore in Pearl, Miss.
“We’d seen double-digit growth every year, and we outgrew our old store,” Miskelly recalled. “We had 12 parking spaces when we started—we couldn’t envision taking care of more people than that at a time—and we ended up with people parking up and down a four-lane highway on weekends.”
The retailer’s current flagship store went up in 1995 in what was then an 80,000-square-foot space in Pearl with attached warehouse. Miskelly added another 40,000 square feet to the showroom in 2004. A previous location had converted to a clearance store in 1996. The retailer’s original Pearl location became Miskellys Roomstore in 2007, offering savings on room packages.
The Miskelly shopping experience starts with a sales staff that has a service mentality. “We have a family friendly environment—if it’s bad weather, we’ll have our staff outside with umbrellas,” Miskelly said. “We have automated doors so they aren’t struggling to get in with a baby carriage, no curbs. We have an area when you first come in and can decompress before getting approached by a salesperson.
“People form an opinion when they drive on your lot and walk through your door.”
That location, the “tower area,” is sacrosanct for arriving shoppers. There’s a display of furniture, and they have a chance to orient themselves, and look about the store. The area also features Bible verses—Miskelly is front-and-center about being a faithbased operation—and gives newcomers a sense of what they’ll find as they go deeper into the store.
When the customer makes a move, Miskelly Furniture takes a service-oriented approach to the sales process. “Once we have that initial greeting, that customer is aligned with a salesperson—and that salesperson is a servant,” said Alan VonderHaar, senior retail analyst and mattress buyer. When it comes to merchandising, Miskelly Furniture likes to offer a big selection by category.
“We’ll have upholstery laid out by lifestyle, kids furniture in one area,” Miskelly said. “We had a big re-model in 2011 when we did an area called ‘The Marketplace.’ It’s eclectic, one of a kind items, and the salespeople love it because there’s always color, new items, reclaimed looks that give them a lot to talk about.”
The Marketplace offers shoppers unique upholstery, wood pieces in surprising finishes, goods from countries ranging from Mexico to India, and interesting pottery. There’s more fun to be had with the “Caring Carousel.” The merry-go-round, which Miskelly found in Argentina, offers kids a place to enjoy themselves while their parents shop. It’s also part of Miskelly’s commitment to improving the community where it does business.
“We ask people to donate a dollar to ride it, which goes to a children’s charity we select on an annual basis,” Miskelly said. “Over the past 12 years we’ve raised $500,000 in money and furniture. It’s the right thing to do, and it’s one of the most rewarding things we do in our business.”
Building on Bedding
Miskelly Furniture’s first sleep store opened in 2008, and its second came online in 2010. After puttering along at 10 percent for a long time, the bedding category now accounts for around 25 percent of business. “We’d always carried bedding,” Miskelly said. “We were growing with it, but not dominant around here. “We still have it in the other stores, and as you build a specialty in it, it helps the business at all locations. We’ve been able to capitalize on a lot of the new technology and memory foams. It’s really given us a boost.”
Health-conscious shoppers and aging baby boomers are driving a lot of bedding business Miskellys’ way. “Our attachment ratio in power (bed) bases is one of the best in the industry,” Miskelly noted. “Once you try one of those out, you’re likely to buy.”
Marketing and Advertising
Miskelly’s primary advertising vehicle for sales is television. “In all advertising, you put your best foot forward, and our furniture is our best foot,” said Betsy Tabor, marketing director. “Television is best, because you can’t really capture our atmosphere with still photography. “All other (media) are supporting vehicles. Our local newspaper has gone down drastically in circulation, and we’ve supplemented the loss of print with social media.” Right now, Miskelly has around 9,000 “likes” on Facebook. The retailer is active on Twitter and does a lot of strong e-mail blasts.
“We fragment the message to make sure we reach our customers where they’re looking,” Tabor said. “We do a lot of online advertising.” While the social media world has made her job more complicated, it’s also made it a lot more interesting. “You can find new ways to reach more people and spend less money,” she said.
“We’ve always said, ‘We have to own our backyard,’ and with that we not only try to serve the people coming into the store well, but give back to the community that’s done so much for us,” Tabor said. With advertising “we’re positioning selection, service and price. We do want them to know why we’re the best choice around.”
A lot of the advertising highlights brand attributes of selection, service and a lovely shopping environment.
“As I said, we like to put our best foot forward, and for me, those brand spots are my favorites, because they show how beautiful our stores are,” Tabor noted.
Miskelly’s slogan is ‘beyond furniture’ and its ‘Sweet Dreams’ program with Tempur-Pedic is an example. “Tempur-Pedic approached us with a great deal of single mattresses they had available,” Tabor said. “We located the 501-3C’s for delivery. … It took us quite a while to find organizations that would qualify, and that would be able to use a single twin mattress. We then partnered with a local TV station to put together a campaign.
“Every week we’d deliver to another organization, and the station was great about giving coverage. Tempur-Pedic was extremely pleased, and they have taken our model to develop a campaign they’ll share with other dealers.”
“It’s a feeling and a passion passed from the owners to the employees,” VonderHaar said. “When you talk about branding, you have to talk about the community.”
Oscar Miskelly credits the size of Miskelly Furniture’s showrooms, economies of scale, depth of selection and same-day delivery for strong growth coming out of the recession.
“We aim to be in stock 85 percent of the time on everything we have to show, and certainly, the community service helps,” he said.
All that’s paying off at Miskelly Furniture, which ranked first on Home Furnishings Business’ Power 50 ratings of independent retailers. “We had some of our best months and days last year that we’ve seen in six or seven years; and in the first three months of 2014 we’re still tracking ahead,” Miskelly said. “We continued to be aggressive with our advertising even during the downturn, and I think people remembered us when things started turning around.
“Long-term financing has built our average ticket, and as housing starts have improved we’re doing more housefuls of furniture.” HFB
Miskelly Furniture at a Glance
Headquarters: Pearl, Miss.
Store Count: 6 stores around the Jackson, Miss., area, including its 120,000-square-foot flagship store in Pearl; a 40,000-square-foot namesake location in Madison, Miss.; a 40,000-square-foot Miskelly Roomstore in Pearl; two 6,000-square-foot Miskelly Sleepstore locations in Flowood, Miss., and Ridgeland, Miss.,; and a 15,000-square-foot clearance center in Pearl.
Key Management: Oscar Miskelly, CEO; Betsy Tabor, marketing director; Alan VonderHaar, senior retail analyst and mattress buyer; Deborah Watson, COO; Tracey Dillard, marketing assistant.
Annual Revenue: About $50 million in 2013.
Employment: 250 employees.
A Look at the Market
As a middle to upper-middle price-point retailer, Miskelly Furniture has a good home in the Jackson, Miss., area. Fifty-one percent of consumers there are looking for middle prices; and 23 percent are at upper-middle points, according to market analysis from Home Furnishings Business’ parent company Impact Consulting. Retail sales of home furnishings in the market are on the upswing, as well, with 2013 sales totaling $142.4 million, a 1.1 percent increase over 2012, when sales were up 7.2 percent from 2011.
Miskelly Furniture hung its hat in the Jackson, Miss., area, and that’s where CEO Oscar Miskelly spends most of his spare time. “I enjoy youth sports, and I’m very involved with that in our community, not just from a coaching, but promoting things to help kids, whether to advance to the point they get a scholarship or to provide an outlet,” he said. “I work on promoting that in our community.” Marketing Director Betsy Tabor also makes an effort to be involved with local high schools’ booster clubs. Miskelly Furniture is very upfront about being a faith-based business, and Oscar Miskelly and others in the organization are very involved in their church.
He also noted that he’s benefitted from traveling to see how other furniture stores operate. The store is a member of Impact Consulting’s Strivers performance group, but Miskelly said the family focus of so many retailers predates Miskelly Furniture benefitting from that association.
“We’ve been able to travel and visit with a lot of other retailers, and furniture retailing’s family orientation makes our business pretty special—you’re always taking with the principals,” he said. “Other people like Nebraska Furniture Mart are willing to spend time to talk about what they do. … I was just out in California to see Living Spaces.
“We try to stay on the cutting edge of what’s going on in furniture retailing across the country. That’s helped us a lot, the ability to travel and see how other people are doing things.”
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