MOTIF-ated for Success

February 28, 2007  by in UnCategorized   

By Home Furnishings Business in Case Goods on March 2007 Steve Lora and John Perez opened MOTIF Modern Living just over a year ago, and though they’re not willing to disclose hard numbers, they’re also not too shy to brag that they’re raking it in.

“It makes my hair stand on end,” said Lora, who will go so far as to say that the 21,000-square-foot store just south of Austin made “millions,” and “double what we told the bank we would make.”

Lora, president of the company, expects to open a second Texas location this year, and four more Texas locations within the next five years. This rapid expansion plan wasn’t born of a successful first year in business. Lora had the five new locations scouted out even before this first store opened. But they are only a pittance of what he predicts for MOTIF. He sees it replicating itself nationally to “dozens and dozens” of stores. “I want to grow it and grow it and grow it and grow it and grow it,” he said.

This will happen, he continued, on the strength of its merchandise and prices, but also on its character.

“We think of ourselves as a lifestyle retailer and not as a furniture store,” Lora said. “Now, of course, furniture is the bulk of what we sell, but the way that it’s presented, it’s much more akin to, say, Pottery Barn, where if you like this lifestyle, this contemporary modern look, then everything that you need is available at MOTIF. And that’s what we’re about. That’s why people drive from so far away, because they want that look.”

The MOTIF Mantra

“That look” is sleek and warm. Contemporary can often feel cold, Lora said. But MOTIF shies away from chrome and other materials that don’t provide much visual comfort. Perez, vice president and buyer, has a favorite color that appears throughout MOTIF—chocolate brown. The store’s relaxing, world music soundtrack compliments arrangements of tropical flowers and displays of moving water.

It also compliments an attitude that Lora and Perez believe is as attractive as their furniture—the sense of inclusiveness and progressiveness for which nearby Austin, where Lora and Perez make their home, is famous. MOTIF actively recruits minorities and women, and touts its recycling program on its Web site.

“We’re a very Hispanic-friendly company, and we try to hire people who are bilingual. It’s a respectful thing for us and where we are located,” said Lora. “We want to communicate with people in a language they prefer, not the language we prefer.” The company advertises in two languages. It buys ads, for example, in newspapers in Monterrey, Mexico—a few hours drive over the border. Perez, who was born in Mexico and raised in Eagle Pass, Texas, is a native Spanish speaker. Lora also speaks Spanish, and engages customers in the language every day.

Lora also talks about the store as “democractic.” All employees, including him and Perez, wear the periwinkle blue polo shirt with the MOTIF logo, designed by Lora, and denim jeans. Perez said he and Lora have their own version of the phrase: “The customer comes first.” At MOTIF, it’s “our employees come first.”

“If they’re not happy, they’re not going to treat our customers in a happy manner, and then nobody is happy,” said Perez.

Among the benefits offered employees are a 401K plan and health insurance, whether the employee works full time or part time. And early on, Lora and Perez decided that salespeople would not work on commission. Elsewhere, they had seen it breed a competitiveness that did not so much boost sales as fuel resentments. Lora and Perez believe they’ve found a better way to motivate: gift cards.

“We give a lot of gift cards,” said Lora. When employees meet their daily goal, they get a gift card, or $50. When the store makes its daily goal, every employee gets a $25 gift card. The people in the warehouse—9,000 square feet on the same property—are always asking how the people on the floor are doing, and who is in the lead, because the first person to make his or her goal gets to decide where everybody’s gift card will come from. (Common choices include Target and grocery stores.)

Then there are the out-of-the-blue surprises for employees, far more imaginative and appreciated than a cake on a birthday. “One of our employees just moved into a house. We gave her a king-size bed and Turkish towels. Another guy bought a house—we bought him all the paint for it.”

The Furniture Aesthetic

If Perez and Lora understand people, they also know furniture. They both worked at the same furniture company—Perez as director of merchandising and Lora as director of marketing—for years, 11 and two respectively. During those last years, they realized that between the two of them, they had 90 percent of what they needed to go into business for themselves.

Perez also grew up in retail. His family owned several stores in Eagle Pass, including clothing and bridal stores. “I’ve been doing store window displays since I was 9,” he said. In college, he studied drafting. Lora’s father is a modern architect in New Orleans who raised his children in a house filled with Danish modern furniture. In college, Lora studied art and design. He then earned an MBA.

The two drew up a business plan, and for capital drew upon Perez’s 401K, Lora’s savings, and a bank loan. In early 2005, they spied a location at the San Marcos Prime Outlets, 30 miles south of Austin, and one of Texas’ most popular tourist attractions. But the mall didn’t want them. In February 2005, they found a building under construction on I-35, the road to the mall. Each day, 84,000 cars pass the spot.

Windows and skylights sold them on the store. MOTIF is infused with light. “I read somewhere that retail sales improve 20 percent with natural light,” said Lora. He and Perez built the store to take best advantage of the bright, airy space. The ceilings are 30 feet high, with exposed beams, and the floor is stained concrete. They didn’t construct interior walls, but installed 25 glass partitions, 10-feet by 10-feet each, that diffuse sunshine and allow salespeople to keep an eye on customers. “The store looks like a loft,” Lora said.

The building’s exterior was completed in July of 2005, its interior in the fall, and it opened for business in December of that year.

Typically, MOTIF shows 35 vignettes and prices them to sell. Lora and Perez buy containers, and close-outs. They negotiate aggressively to keep prices down. Like the sprawling San Marcos complex down the road, they are an outlet. And they love it when customers ask if their main store is in New York. No, they say, it’s all right here, in Kyle, Texas. But they are on track to open a second store, within driving distance from the first, this spring. Currently, they draw 65 percent of their traffic from the Austin area, and 25 percent from San Antonio, about an hour’s drive.

Selling Online

MOTIF, however, has already extended its reach beyond Texas, with an online business that accounts for about half a percent of sales. But Perez and Lora see much potential in the Internet.

“There’s a huge misconception about e-business and furniture,” Lora said. “A lot of people think you can’t sell furniture online, that you have to sit in it before you buy it. But with younger people, I don’t think that even crosses their minds.”

Shipping across the nation presents challenges, but not insurmountable ones, said Lora. For small items, MOTIF uses UPS, and delivers larger items by freight. It is hard for some customers to imagine an 18-wheeler pulling up at their curb to deliver a single large item, but the cost seems far more manageable if a roomful of furniture is delivered, Lora said.

He and Perez are trying to grow their e-business by improving an already easy-to-use Web site, which was recently nominated for a Webby award. “When you Google ‘affordable contemporary furniture,’ we come up fast,” said Lora, who used to manage the site. The job is now handled by a technology manager hired soon after the store opened.

Though online sales will still account only for a small proportion of their business in 2007, their second year in business, sales overall are projected to increase 60 percent. That won’t be the case in 2008, Lora said, when they will be busy opening a third, and possibly a fourth store. And by then they may have expanded into a very different market. MOTIF has already outfitted a Texas spa, and Lora can picture MOTIF furniture in many more commercial properties—spas, salons, and other image-conscious businesses. What is now one store will eventually be, he is confident, a brand known coast to coast by a great diversity of customers and clients.

“If I ever have a biography, if I ever become somebody, it would have to be about this: my dreams are so out of scale with reality,” said Lora, laughing. “But I believe this very wholeheartedly. You do have to dream big. Everybody told me to start small, and I don’t believe that at all. I think you need to start as big as you possibly can.” HFB