Learning One Store at a Time

June 30, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on July 2007 This spring, Marty and Michelle Cramer, together, were honored with the National Home Furnishings Association’s Retailer of the Year award because their Washington and Idaho stores are prosperous, innovative models of what to do right. Marty is the CEO, the treasurer of the Western Home Furnishings Association, and by Michelle’s admission, the genius behind their remarkable expansion. She is his perfect complement, a whiz with numbers who kept their company on firm financial ground through its most difficult growing pains.

That is now.

This was then, 1988.

Michelle is a 22-year-old newly minted graduate, with honors, of the University of Washington’s business school. Marty is a former crab fisherman who studied theater in college. He is 10 years older than Michelle, broke, and fresh out of a drug rehab program. He drives a 1978 Dodge Aspen station wagon with a duct-taped fender to introduce himself to Michelle’s father, a prosperous engineer, who has one question for his daughter’s intended:

“Why are you such a mess?”

Marty’s response: “It’s a temporary thing.”

It was.

Cramer’s Home Furnishings opened its fifth store last year, in Idaho, marking its first venture outside Washington state. It boasted more than $7 million in sales in 2006, double-digit growth and 45 employees. Announcing the NHFA award—the Cramers won for a businesses with less than $10 million in sales—the association cited the chain’s rapid growth, top-notch customer service, service to the industry and support for charitable causes.

But Cramer’s is no textbook model for business students or would-be furniture retailers. Marty Cramer never had much of a plan, just a knack for sensing opportunity in out-of-the-way places and a desire to lead a very interesting life. He also had Michelle to hang tight to the purse strings. What Cramer’s really won the award for, Marty said, is its wacky story and strange cast of characters.

Marty, who had one big role in Seattle theater before deciding that he couldn’t make enough money on the stage, employs all his theatrical skills in the telling of this entrepreneurial tale. It probably has a lesson in it for fellow retailers, but that lesson may be to embrace your craziest ideas—and marry someone who will steer you away from the truly insane ones.

The Cramers didn’t start out in furniture. They started out working for a chain of Hallmark stores, in Seattle, near where Michelle grew up. She managed a store. He managed a warehouse, and was promoted to operations manager. Marty was bored. But he found a job two hours north, on an Indian reservation, as operations manager for the largest fireworks distributor in the Northwest. Michelle, a fervent anti-smoker, wound up managing the reservation smoke shop. They quit within a year.

But back in Seattle, Marty’s brother needed a warehouse manager for his successful trading card company. It paid less than Marty’s job with the fireworks distributor, but Marty didn’t care. Within a year he was promoted to vice president of operations, and was hobnobbing at the Super Bowl and Beverly Hills hotels with the stars of the trading cards. It was 1992, and he was making mid-six figures. The Cramers bought a house in a fancy Seattle neighborhood and Michelle spent her days volunteering at the local animal shelter before she too joined Pacific Trading Co. Within weeks of becoming credit manager, Michelle had the 90 days accounts payable down from $1 million to $200,000. She also got to schmooze with the likes of Mike Piazza, Cal Ripken Jr. and Nolan Ryan. It was a good life, with excellent salaries and enviable perks.



“I have to get out of here,” said Marty.

“Let’s go,” said Michelle.

Marty needed a challenge, something more exciting than the guaranteed paycheck. So to stave off boredom, and to start their business, Marty and Michelle quit. It was the spring of 1995, a nice time of year to retreat to a small cabin they owned on an island in the Puget Sound, and to ponder their next step as they renovated the place. It’s where they met the man who, while helping them with the renovations, clued them in to their entrepreneurial future. He is their former partner, now known as “the contractor guy.”

One day, as the contractor guy was working on their cabin, he told the Cramers that if he had enough money he would open a store in Ellensburg, a town 90 minutes southeast of Seattle at the base of the Cascade Mountains. The Cramers had some money.

People in Ellensburg and vicinity, the contractor guy continued, didn’t relish driving to Seattle to shop. But what to sell? Marty and Michelle thought a furniture store made sense. They wanted to ring up big sales, as compared to the small-ticket items they helped sell at Hallmark. Marty went scouting for their future furniture store and found no available real estate in Ellensburg.

But he did find an abandoned, freestanding gym in the center of Cle Elum, a short drive from Ellensburg. It was 6,000 square feet, and had been used by the local high school. But the roof was leaking badly. Marty offered to repair it for free if the school district would allow him to rent it for $500 for six months. The district agreed. So Marty, who had never fixed a roof, climbed atop with buckets of tar, sloshed the tar around with a mop, and was pleasantly surprised that the gym stayed dry in the next rainstorm. He and Michelle went into business with the contractor guy, knowing that the partnership would be short-lived. Marty wanted to go into business only with Michelle.

Inventory had to be acquired on the cheap. “Miss Moneybags wouldn’t let me have any money,” Marty explained. So he cold-called Emerald Home Furnishings, a local importer. “You don’t know me,” Marty told the importer, “but I’m a good guy and I know I can do this.” When the importer, now a close friend of the Cramers, didn’t say no, Marty kept talking, and eventually secured several truckloads of dining room sets and upholstery originally intended for a store that was going out of business. The Cramers hyped the August 1995 opening by hitting the radio with what Marty calls “big, obnoxious commercials.”

“We opened on a Saturday and damn near sold everything we had that day,” he remembered. “It was fun, wasn’t it Michelle?”

“Yeah, it was,” said the understated Michelle.

“People drove from as far as Yakima,” Marty continued. “We made a bunch of money.”



Small Town Marketing

The concept behind a furniture store in Cle Elum, Wash., population 1,770, is that people in small towns shouldn’t have to drive to big cities to find good, mid-priced furniture and excellent service. The idea worked so well in Cle Elum that the Cramers opened their second store the very next year in Ellensburg. Marty and Michelle were so busy that they hardly had time to notice that they lived in a rat-infested, $200-a-month studio apartment with drug dealers working the hallways.

That same year, the Cramers bought out their partner, but decided to follow through on another suggestion of his: open in Omak. He had been right about Ellensburg. Omak was another small town. Located in north central Washington, it had one high-end furniture store that was doing well. Marty discovered a former J.C. Penney there, an 8,000-square-foot building he considered perfect, and Michelle considered unaffordable.

“She would just not let me have it,” Marty said.

So he hit up Michelle’s father, who had decided that perhaps his daughter hadn’t married such a disaster after all. Michelle’s father and stepmother put up two-thirds of the cash, and the Cramers contributed the balance. They rushed to get the store open for the day after Thanksgiving 1997, and made it—sort of.

“I took out a double-truck ad in the paper that said, ‘We’re not quite ready but if you don’t mind stepping over a few boxes, come on in,’” Marty recalled. A line of 40 people stood waiting before the doors opened at 8 a.m. Later in the day, a very unhappy fire marshall told the Cramers that more people would have to leave the store before they could allow any more customers in.

“That weekend we did $60,000, and we only had $40,000 worth of furniture,” Marty said. “It was one of the funnest, if not the funnest three days of work I’ve ever done. Were you there, Michelle?” he quipped.

“I think I was back at the other store,” she chuckled.

The Cramers next move, five years later, brought them to Yakima. With 70,000 people, it is a large city by their standards. The industry was in the doldrums, and Yakima no longer had a La-Z-Boy dealer. Marty found a 30,000-square-foot building and bargained the owner down from $15,000 to $3,000 a month, and begged La-Z-Boy, which was looking for a more established dealer, to give him the line. The Cramers opened in Yakima in 2002. It and the Omak store are now their leaders.



More Momentum

By now Marty and Michelle had moved out of their drug den of an apartment building and into a decent house in Ellensburg. They picked another Ellensburg property, an old farmhouse, for company headquarters. They also opened, in 2004, a fourth store in Oak Harbor, near Seattle on Whidbey Island, which they purchased from a friend in the business. And last August, they crossed state lines on the advice of a friend and furniture representative who thought Moscow, Idaho, would be a good home for a new Cramer’s. Marty negotiated the lease on his first visit to the town.

Cramer’s also renovated its Ellensburg store—“the ugliest in the world,” according to Marty—with design guru Carmine Caruso. Marty had a hard time convincing him to come to Ellensburg, and Caruso wanted a hefty fee just to look at the place. Finally, he made the trip, agreed that the store was the world’s ugliest, and recommended a $500,000 renovation. Caruso said if it didn’t double sales, he would return his $15,000 fee. The Caruso renovation tripled sales. He is still a private consultant, but effectively Cramer’s director of merchandising, Marty said.

And that, to date, is the story of Cramer’s Home Furnishings.

So what’s next for Marty and Michelle? Can they be a Northwest powerhouse? A national chain? Are they going to sell the business and motorcycle across the country?

They might look to expand further once the market shapes up, said Marty, who is going to keep an eye out for hard-on-their-luck locations. “I like to go into towns where things are somewhat depressed,” he said. “The people are glad to see you, the buildings are cheap, and the government comes in on a white horse.”

And as usual, Michelle won’t have the most words, but she will have the last.

“We always thought we wanted 10 stores,” she said. “But we’re pretty happy now.” HFB