Easing Into Transition

November 30, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on December 2007 Since Larry Klaben took over Morris Furniture in 1998, the company has added 10 stores and sales have quadrupled. So you might think Klaben would stick with his winning formula.

He will, and he won’t.

The Ohio chain, celebrating its 60th anniversary this year, is on a roll with its Ashley Furniture HomeStores—now seven strong—and plans more for the coming years. But at the same time, Morris Furniture is going to try something completely different: “The Home Center,” a 100,000-square-foot furniture lifestyle mall with five entrances to invite customers into five separate stores whose interiors flow into one another.

“It has the benefit of a mall in its easy interior circulation,” says Klaben, a Congressional aide-turned-entrepreneur, “but it’s also the newest trend in consumer shopping areas, which brings back the old downtown concept.”

Site work has already begun on the lifestyle mall, which will include a Morris Home Furnishings, an Ashley Furniture HomeStore, a sleep shop, home theater store, and a children and youth furniture showplace. The mall, expected to open in late 2008, will sit at the intersection of two interstates north of Dayton. With this new venture, Klaben predicts that Morris Home Furnishings will surpass the $100 million mark in annual sales. The company now captures 35 percent of the Dayton market.

Steeped in History

Certainly before Klaben entered the picture, Morris had much going for it—stable family ownership since 1947 and a strong brand name in southeastern Ohio. Morris Lieberman and his son Burt founded Morris Furniture in downtown Dayton, and sold used and new furniture in a 3,600-square-foot store, the last to join a total of eight on downtown Dayton’s furniture row. They were also the last furniture store standing on the row in 1965 when Burt Lieberman bought a 12,000-square-foot church, built by the congregants themselves, in the growing suburbs north of Dayton, near Wright-Patterson Air Force Base.

“It was near a very large area of brick homes, and it was considered the largest area of brick homes in the United States,” says Lieberman, who today, at 81, still works every weekday in the building, though Morris Home Furnishings has a new headquarters farther outside Dayton. The store near Wright-Patterson expanded and expanded until it hit 100,000 square feet of showroom, warehouse and office space.

In 1986, Lieberman brought Larry Klaben, his son-in-law of a few years, into the family business. At the time, Klaben and his wife Marilyn were living outside Washington, DC. Klaben had worked as an aide to former Ohio Rep. Tony Hall, a Democrat, and had then owned a series of computer businesses. For Hall, Klaben handled legislation pertaining to the congressman’s work on the small business committee, and also computerized his office. Klaben’s own computer businesses were software start-ups.

Leiberman wanted to hire Klaben only partly because he thought he would make an excellent employee. The company needed a computer system—its first—and Klaben knew computers. But more than that, Klaben and Lieberman’s daughter had just had their first child, Max.

“I thought I’d like to have that grandchild close to me, in Dayton,” Lieberman says.

On the young family’s next visit to Dayton, the father-in-law asked the son-in-law if he could recommend a computer company. Klaben did his research, and dutifully reported his results to Lieberman, who had a second question:

“Why don’t you come up and install it?”

The Klabens sold their Washington house and moved to Dayton, where Larry Klaben became vice-president of operations. “The rest is history,” says Lieberman.

History for Morris Home Furnishings is a tale of fast-paced, robust growth. Klaben turned out to have the most vigorous of entrepreneurial spirits, and grand ideas for his father-in-law’s company. “Never in my wildest dreams” is Lieberman’s assessment of what his business has become.

Timely Transitions

In the decade after Klaben arrived in Dayton, the emphasis was on building the Morris brand. The company changed its name from Morris Furniture Mart to Morris Home Furnishings. It formed an executive committee of experienced leaders, and installed its first computer system.

It was time for a second location.

In 1996, Morris Home Furnishings opened a Thomasville store in the southern suburbs of Dayton and attached a Morris store to it. Klaben drew up an ambitious plan for stores throughout southeastern Ohio, and put it into play after he purchased the balance of the company’s ownership stock. Morris Home Furnishings officially passed to a third generation.

In 2000, another Morris Home Furnishings store opened south of Dayton, “our first store totally designed to meet the needs of the consumer,” according to Klaben. Shortly after its opening, the chain’s volume doubled, propelling it to first in the Dayton marketplace. Morris Home Furnishings now had the distributive capacity to tackle its aggressive growth plan.

In the late 1990s, Klaben and his executive committee watched area competitors fall like leaves in autumn—Montgomery Ward, Levitz, Sears HomeLife and Roberds among them.

“We saw all the changes in the furniture industry, and we felt we had to become a bigger player in our marketplace to survive,” says Klaben.

The openings then came fast and furious: Morris’ first Ashley Home Furnishings store, south of Dayton, in 2003, and a Dayton outlet featuring merchandise from all three of the company’s concepts—the Morris, Ashley and Thomasville stores. A second Ashley store opened east of Dayton in 2004, and that same year saw the opening of the company’s first Cincinnati store. In 2005 came the first Ashley store in Columbus. And in 2006 Klaben crossed state lines, opening an Ashley store in northern Kentucky. In 2007 came another Ashley store in Klaben’s hometown of Springfield, Ohio, as well as another Columbus-area Ashley store.

Unveiling the Plan

The grand plan is far from finished.

After the opening of the lifestyle mall next year, Klaben is looking to more than double the Ashley store count to 15 in the areas for which he is licensed. That’s the first tier of his plan: grow the Ashley and Morris brands.

“Early on, I felt that Ashley Furniture Inds., under the leadership of the Waneks, was one furniture company trying to change the status quo of the industry,” Klaben says. “They are an amasser of world and U.S. manufacturers, and their commitment to lean manufacturing has enabled them to provide extraordinary value—with an exceptionally fast distribution system.”

“To tell you how fast it is,” Klaben continues, “there are times when we have Ashley customers on a weekend, and the product will come from their Wisconsin distribution center and will be in our warehouse on Wednesday.”

As for Morris Home Furnishings, Klaben has staked its reputation on tried-and-true brands—including Berkline, Broyhill, Flexsteel, Lane, La-Z-Boy and Sealy—and extensive customization capabilities.

The second tier of Klaben’s growth plan is the development of the lifestyle malls. The first such mall, which is expected to cost $10 million, will bring in $25 to $30 million annually. Designed by New York-based Grid2, the store will be anchored by a 35,000-square-foot Ashley store and a 50,000-square-foot Morris Home Furnishings, which is itself an agglomeration of specialty stores—from dining to lighting. Each of the five stores within the Home Center will have its own advertising program. Klaben plans a second Home Center in the Columbus area, but has not yet found the right location. He’s also eyeing other Midwest markets.

As he sees it, the Home Center lifestyle malls are the future of retailing, but also a nod to the past, when stores such as the original Morris Furniture were established on furniture rows to generate customer traffic.

For a man who thought he would never move back to Ohio, Larry Klaben is remarkably involved in his community. Morris Home Furnishings supports children, education and the arts—including The Human Race Theater Company, for which his wife is education director. The company’s golf outing is organized annually to support the Children’s Medical Center of Dayton, which it did this year to the tune of an $80,000 donation. Also this year, Klaben was appointed to the board of trustees of Wright State University, where he was in the tenth graduating class.

He has also welcomed his younger brother into the business. Robert Klaben, as of two years ago, is vice president of marketing and advertising. Before joining Morris Home Furnishings, Robert worked in the retail camera business—at Click Camera, a chain founded by the Klabens’ father.

As for the possibility of a fourth generation running Morris Home Furnishings, Larry Klaben says he would welcome any of his three children into the business—but only after they found work elsewhere.

“The rule is they will work in another industry first and acquire a profession they are passionate about,” Klaben says. “If they want to come into the family business, they’ll need some kind of expertise. Then we’ll talk about it.”