Looking for Mr. GoodShop

May 7, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on May 2007 The owners of Linder’s Furniture like to talk about the scary things the market has thrown at them over the years—changing tastes, unreliable suppliers, recessions—you name it.

CEO Phil Linder and President Eric Foucrier say they survive and thrive because they can see around the bend. Their clairvoyance—rather the ability to make sensible predictions by analyzing reams of data—has enabled them to avoid disasters that have destroyed competitors, and helped them to seize upon trends to maximize profits.

“We’re a very data-intensive company,” said Linder. “We spend a lot of time going over numbers—from every department, month-to-month and quarterly—so we know exactly what the state of the company is, and the state of the industry is.” And as Foucrier likes to say: “If you can’t measure it, you can’t manage it.”

The retailer was recently named Retailer of the Year by the Western Home Furnishings Association. The WHFA award, announced in April, recognizes winners for their leadership in the industry, and their achievements in business and charitable work. As you might expect of the winning firm, Linder’s keeps prices low, boasts speedy delivery service, puts extra effort into employee training and generously supports Make-A-Wish and other national and local charities. And Linder and Foucrier have taken on leadership roles in both the High Point Market Advisory Board and Las Vegas Advisory Board.

But they also demand excellence in one further category, and doubt they could excel without it: the ability to set their 10 Los Angeles-area stores apart. Never discount, they say, the need to keep your business in the forefront of your customers’ minds.

Take, for example, the promotion Linder’s hit upon for the opening of two new stores this spring: “Fifty Rooms in Fifty Days.” That’s what they gave away in a high-profile, two-month campaign, and awarded the final prizes before 43,000 fans attending a Los Angeles Angels game.

“A lot of people run ‘no sales tax’ or ‘free delivery’ promotions,” said Foucrier. “We could have given away a car or a few sofas. But we try to come up with something different. ‘Fifty Rooms in Fifty Days’ brought in a lot of traffic.” To be exact, traffic increased 32 percent during the course of the promotion.

Or look at Linder’s unusual partnerships with big league and college sports. Not only does it have marketing relationship with the MLB’s Angels, but it also partners with the NBA’s Lakers and Clippers, the NHL’s Ducks, and college powerhouses UCLA and USC. The intention is to catch the attention of a group underrepresented in furniture stores: men. As Linder’s explained in its application for the WHFA award, such sports marketing enabled it to quadruple its sales of televisions and entertainment and home theater seating. Marketing itself with nationally recognized teams further lends the company a degree of gravitas normally associated with far bigger firms.

“By incorporating professional sports events into our marketing programs,” the WHFA application read, “and having our name appear alongside Coca-Cola, Bank of America, etc., we become, in effect, a national company, i.e., ‘you are judged by the company you keep,’ and it instantly increases the effectiveness of all of our other advertising vehicles.”

If Linder’s distinguishes itself in any one way, then, it’s with its full-service, in-house marketing and advertising department. Foucrier, Linder, marketing director Ross Steiner and company spokesman Tom Campbell are the heart of this group. Linder is the quieter one with all the numbers in his head. Foucrier, though he started out in life thinking he would pilot jets, has the outgoing, easy manner more often associated with preachers and politicians. Campbell, with Linder’s since 2005, is one of the Golden State’s golden voices, and has been hosting talk shows and selling products on the radio for four decades.

Weathering Early Storms

Foucrier and Linder began brainstorming opportunities together nearly 25 years ago when they both found themselves working at the same waterbed store, Eastman West, at a mall east of Los Angeles. Linder was general manager and Foucrier was a college student trying to make money between classes. He was on his way to a degree in aviation management, but proved a talented salesman in his part-time work. Linder, on the other hand, had known he wanted to be an independent retailer from the time he was a very young man.

He was born in Israel, and migrated to the United States when he was child. Growing up, he worked in clothing stores in Brooklyn, and from the beginning showed a head for business. A visit to a sister in California convinced him that he would be happier in the sunnier weather, so he settled in the Los Angeles area and worked for Eastman West until he was ready to open his own business. It would also be a waterbed store, and he called it “Linder’s.” The location was Torrance, just south of Los Angeles, bordering on the Pacific. When he let Foucrier in on the news of his impending opening, he also asked him to join his team. He and the outgoing California native had become good friends, and Foucrier was someone you wanted on the sales floor. Foucrier remembers his answer: “No, I’m making $40,000 a year here.” Linder promised Foucrier he would make at least that in the new venture. With Foucrier on board, Linder’s opened in 1984.

It wouldn’t be long before the man from Jerusalem and the California kid, 12 years his junior, faced their first crisis. Waterbeds, so popular in the 1970s and early 1980s, weren’t so hot anymore. “So we got out of it,” said Foucrier. They turned their attention to what was selling. With an emphasis on bedrooms, Linder’s dove into oak furniture—with great success. By the late 1980s there were four Linder’s furniture stores in Greater Los Angeles.

The next challenge was the full-blown recession of the early 1990s. As the economy slumped, it became obvious that Linder’s, without major restructuring, couldn’t survive. Linder and Foucrier took a long, hard look at the statistics, found two stores that weren’t performing, and closed them. Foucrier said it’s that kind of difficult but realistic thinking that has allowed Linder’s to see another day when so many others don’t. “We’ll adjust our operations to fit the size,” said Foucrier. “We are capable of managing the business up or down to survive.”

But that shouldn’t mean skimping on employees, Foucrier and Linder insist. Linder’s pays 85 percent of its staff’s health insurance, provides a 401K match of 4 percent and pays “a bit above average,” according to Foucrier. “A lot of companies say the customer is ‘number one,’” he continued. “We think the employees should be ‘number one.’ When that’s the case, they intuitively take care of the customer better than themselves.” The company has a 10 percent turnover rate in sales, and 2 percent to 3 percent rate companywide.

Having survived the recession that opened the 1990s, Linder’s needed more opportunities. Mid-decade, they found one. Before most of their competitors caught on, Linder and Foucrier realized how Chinese-made furniture could lower costs, savings that could be passed on to their customers. “We were ahead of the curve, looking to give customers a better value,” said Foucrier.

Customers appeared eager for the values from China, but Chinese furniture wasn’t necessarily ready for the American market. “The quality wasn’t there. We had some containers come in here with cracked-up furniture,” said Foucrier. “But we stuck with it and worked with the factories on quality control.”

Eye to the Future

By the time the company made its next big move, the acquisition of Legacy Home Furnishings in 2005, Linder’s had six stores to its name. High-end Legacy complimented Linder’s mostly mid-price offerings, and had established a strong reputation in the Coachella Valley, a group of fast-growing communities about 115 miles east of Los Angeles known as the “Desert Empire.” Legacy owner Arnold Belinsky was ready to retire.

The company, founded in 1991, was two stores—the Legacy flagship store and a store called Rooms Express. The latter’s vendors—which included Universal, Modus, Wynwood and Futura—more closely resembled Linder’s mix. Linder’s and Belinsky’s companies were approximately the same size, and had cultivated similar company cultures. The Coachella Valley was also attractive because television advertising is far more affordable there than it is closer to Los Angeles. Linder’s kept the “Legacy” and “Rooms Express” names and made plans for a second Rooms Express store, which opened in the summer of 2006 and became one of the chain’s top-producing locations.

“The merger of Linder’s and Legacy has made both our companies stronger,” Foucrier told a local newspaper at the time of the acquisition. “With our combined buying power, we can now offer customers the greatest selection and best prices in furnishings anywhere in Southern California.”

With the opening of a store in Costa Mesa this May, its 10th, Linder said the chain will take a break from expansion mode. The economy will not allow the double-digit growth the company enjoyed in the first half of the decade. To protect itself in the softening market, Linder’s within the past year switched to a complete rooms package, increased its average individual ticket price and focused on boosting its closing ratio. The strategy is designed to weather the current storm, and to prepare for the day when it will again be time to build.

“We’re out there looking,” Foucrier said. HFB