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Del Sol Furniture
October 10,
2012 by in UnCategorized 
By Home Furnishings Business in on October 2012
While any furniture store had problems enough dealing with the recessions impact on business, Del Sol Furniture got dealt three bad cards in the last few years.
The Phoenix furniture, electronics and appliance retailer faced not only a brutal economy, but also new, powerful competitors for its traditional customers, and problems among that Hispanic customer base itself.
We lost about 60 percent of our sales from 2007 to 2009, said Vice President Alex Macias. The recession hit, plus a lot of customers who were immigrants became troubled with the political situation surrounding immigration.
He and his sister, Minerva Macias-Maestas, both graduates of Arizona State Universitys W.P. Carey School of Business, are leading the company their parents, Venancio and Rosa Macias, founded in 1997 into the future.
At the same time the recession hit, Del Sol faced new competition for its traditional Hispanic customer as well, with the expansion into the region of Mexican retail powerhouses Famsa and La Curacao.
They came in strong, and they came in loud, with advertising all over the television, said Macias said. Wed actually been partnering with Famsa for export services on our sales that went to Mexico.
Famsa made an offer to buy out Del Sol, but the family took a pass.
Our stores at the time were around 10,000 square feet, and theres were 35,000, so they only wanted to buy the inventory. We just felt wed put too much into it for that.
Del Sol knew it could compete with big-box selection, and didnt have the budget to match its larger competitors flood of television advertising.
We decided wed beat them on service, Macias said. We made a lot of changes to how we handled things like returns, warranties, going out to the home, and deliveries.
With returns, for example, Del Sol instituted a policy that gave customers three days to return undamaged merchandise for a full refund or credit toward another purchase.
A lot of customers left to try the competition, but they came back, Macias noted.
A new mission statementand the way it came aboutgot employees enthused about the changes.
We went to all our people and asked for the words you think about with the company and got those into the statement, Macias said. That had a big impact with the employees, because they felt a part of it.
Whenever anyone has an issue or question they arent sure how to handle, we say, Read the mission statement, and that will tell you what to do.
At one time Del Sol had six locations, but the recession forced the closure of three smaller, under-performing stores. It also forced Del Sol to re-examine its brand and customer base. Venancio and Rosa Macias had moved 15 years ago from El Paso to cater to what they saw as an under-served nicheselling furniture to Phoenixs large Hispanic market with installment payment contracts.
With a Hispanic population marginalized by anti-immigration sentiment and not in a buying mood and an ongoing recession, Del Sol had to broaden its appeal.
For years wed been Muebleria Del Sol, but we started branding as Del Sol Furniture. We started doing more bi-lingual advertisingmostly English with some Spanish, Macias said. 2009 was our worst year, and thats when we started changing our advertising.
Macias said its hard to quantify the exact Hispanic/Anglo demographic breakdown of the customer base, but credit classifications reveal a couple of things.
First, weve had a big change in the type of people we extend credit to. Before they were mostly self-employed, first-generation immigrants. Now 70 to 80 percent of our Hispanic customers are second- or third-generation, the children of the original customers. They prefer to speak English. Within that Hispanic tradition, we got a more credit-friendly customer.
Second, when we advertise Del Sol Furniture, we got everyone else from the melting pot who needed credit.
Concern about more accounts going to collection also led the store to float another brand concept in the marketplace when it converted one Del Sol location to a new model, Red Tag, which attracted a new, value-oriented customer base.