Heeeeeeeere’s Johnny

January 2, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on January 2007 It’s a long way from the chicken house.

Johnny Janosik Inc. opened what it bills as one of the largest furniture stores on the East Coast in October and welcomed so large a crowd to Laurel, Del., that first day—as many as 7,000 people—that shuttle buses had to be run from remote parking lots.

“It was chaos,” said CEO Frank Gerardi. “It was just what we wanted.”

Walking the gleaming store is excellent exercise. At 180,000 square feet, it boasts 70 percent more showroom space than the store it replaced—the original Johnny Janosik. There are mobile and see-through walls throughout, lending the 53-year-old business a modern, airy feel, with surprises at every turn: a stacked-stone fireplace to show off the rattan pieces, velvet curtains and a tin ceiling to conjure an art deco home theater and recliners stacked against a 30-foot-high wall.

“What is so very, very special about this store is the fronts we created for every department. They are far more contemporary. We tried to make everything look new—the architecturals, the flooring, the graphics,” said Connie Post, CEO of the eponymous company that designed the new Johnny Janosik.

Gerardi calls the showroom’s size and selection “overwhelming,” and an excellent business decision. Even with the slowdown in the industry, stores at Johnny Janosik’s two Southern Delaware locations are poised to capture more than $50 million in sales this year, at least a ten percent increase from 2006.

And within four years, Johnny Janosik Inc. will open a second 180,000 square-foot, state-of-the-art mega store to replace its showrooms in Dover, Del., which now total 75,000 square feet. And the construction crews are already at work on a 28,000 square-foot clearance center, which is slated to open next to the new Laurel store in April. The grand plan also includes a new 750,000 square-foot warehouse distribution center, on the site of the old Laurel store, a stone’s throw from the new one.

This expansion of a mid-market mogul will succeed, Gerardi said, not simply because of the explosion in sheer square footage, but thanks also to an ambitious redesign and the addition of several upscale brands.

And yes, it all started in the chicken house.

Company founder Johnny Janosik, now 81 and retired, started out in downtown Laurel, Del., in 1953 as a TV repairman, and eventually began selling televisions and furniture. It was the furniture business that took off. Looking for a larger location in 1978, he found the chicken house, no longer a home to chickens, just outside downtown on a well-traveled route, and undertook a massive renovation. Still, to anyone who knows the chicken business, the elongated building with the low roof couldn’t hide its humble origins. Thus was born Johnny Janosik’s slogan: the “Longest Store on the Shore with the Shortest Prices.”

That store, which featured mid-priced pieces, went on to great success. Delaware, with less than one million people, is one of the tiniest states. But Johnny Janosik’s home on the Delmarva peninsula is a reasonable drive to major markets in Washington, D.C., its Maryland suburbs, Baltimore, Annapolis, Philadelphia, southern New Jersey and Northern Virginia. And the company delivers to most of them.

Though retired, company founder Johnny Janosik remains on the board of directors, as does his wife Mary Louise. Two of their three daughters work at Johnny Janosik: Lori Morrison is company president and Linda Christophel words in sales and customer service. The family’s reach extends far beyond furniture. Johnny Janosik has earned a reputation for philanthropy in the region, especially for his support of libraries, schools and Laurel’s redevelopment efforts. The News Journal of Wilmington, Delaware’s largest daily newspaper, called him an “icon of community service.”

But the latest giant step in the company’s evolution – building the two large furniture stores on the East Coast – fell to a man who was once a Johnny Janosik competitor.

Frank Gerardi got out of the Air Force in 1965 and joined his father’s business, Gerardi Brothers Inc., which sold furniture and appliances. And though the Gerardis and the Janosiks competed, it was on friendly terms, and both families have fond memories of joint business trips.

But where Johnny Janosik thrived, the Gerardi brothers ran into hard times. Their five stores, Frank Gerardi explained, were in poor locations, and were hit particularly hard on Black Friday, 1987. With regrets, he closed the shops in 1990.

Four years later Johnny Janosik called. Nearing retirement, he was ready to have someone else run the company. Would Gerardi be interested?

Gerardi wasn’t sure. He knew he wanted to remain in retail, and preferably the furniture business he knew so well. “But I had never worked for someone else before,” he said. The Janosiks looked like good employers, though. They seemed to take seriously the values Gerardi’s own father had instilled in him: keep your business honest, serve your customers well and treat your employees respectfully. It turned out to be good chemistry. He signed on as general manager in 1995, when the stores employed 45 people and took in $8 million in sales.

Now Johnny Janosik Inc. employs 300 and boasted sales of $48 million in 2006. The store that just opened is expected to add up to 100 jobs to the local economy, as will the new store slated to open in Dover.

Gerardi said he is grateful the company embarked upon its massive expansion plans before the recent slump in the housing market and the concurrent downturn in the furniture industry. “As we said at our last board meeting, thank God four years ago when we made the decision to build this store we didn’t know what the economy was going to be like, because we wouldn’t have done it ... we are enjoying growth that other companies aren’t, and it’s because of the new facility.”

The 10 percent growth that Johnny Janosik Inc. expects this year would be 20 percent, Gerardi said, if not for the softness in the market.

And to simply expand, Gerardi added, wouldn’t have paved the way for the increased sales the company has tracked since the new store’s opening. “It had to have the ‘wow’ factor, he said. “The store had to be something that people were really going to talk about. And that’s what we did. I don’t go anywhere now where I don’t run into people who say, “Wow, that store!’”

But the sheer size of the new store—more than four football fields long—is only one factor that the business will rely on to succeed. It had to be big, Gerardi said, but it also had to be engaging and navigable. West Virginia-based Connie Post Cos. is known for its interactive and fluid interiors. “I had seen her work over the years,” Gerardi said of Connie Post, “and I didn’t consider anyone else.”

Post made enough room within the building to showcase 14,000 pieces of furniture, and to delight customers with unpredictable colors and architecture. But she didn’t want Johnny Janosik’s to be a chore. “The idea behind the store is that we have a main artery that pulls you all the way through so you don’t get lost. It’s sort of a yellow brick road,” Post said.

Beyond expansion and design, the business also tinkered with its price points. Large pockets of Delaware and surrounding states are welcoming a new wave of affluent retirees to their coasts, and that means new condos and second homes to furnish.

“We decided to keep what we had, because it was working well. But we also decided to go a little more upper end,” Gerardi said. In the past, Thomasville, Pennsylvania House and Kincaid represented the store’s priciest pieces, but now Johnny Janosik’s also features Bernhardt, Century, Stanley and Lexington—brands in demand, but harder to find at competitors—many of which are close by. Johnny Janosik Inc. is on U.S. 13 in Laurel, anchors Southern Delaware’s “furniture row.”

Since introducing these new lines, Gerardi has tracked a spike in the average ticket price.

Finally, the company’s strategic plan is buoyed by the state of Delaware, which has no general sales tax.

All these advantages, however, don’t mean much unless word of Johnny Janosik’s palatial new store gets out. The company’s aggressive advertising program—built around twice-monthly circulars—will continue, but expand into more markets. “The TV (campaign) will be stronger, and we’ll do more direct mail, more circulars. In order to get the largest piece of the pie you have to be very aggressive,” said Gerardi, who plans to increase the advertising budget by about five percent.

But while advertising will move far beyond Johnny Janosik’s Delaware base, the company’s stores will not. There are no plans to build more stores in or out of the state after the Dover location becomes as impressive as the Laurel showroom.

“You look at what chains there were, and there are not many left. It’s very difficult in today’s economy to operate at that scale, and to have the right merchandise for all those different markets,” Gerardi said. “If you can build something large enough, and worthwhile enough, get them to come to you.” HFB