May 31,
2008 by in UnCategorized 
By Home Furnishings Business in Furniture Retailing on June 2008
It’s no secret that the economic forecast for retailers in 2008 is pretty grim. As we detailed in the April 2008 “Got ‘em?” issue of
Home Furnishings Business, there are tough times ahead for furniture retailers.
But there is light in the darkness: For one area of the furniture business, bedding, the prognosis is ... not so bad. Actually, the signs are very positive. Recent research points to bedding as a category that should weather the storm of economic downturn.
NHFA: Bedding is Tops
According to the National Home Furnishings Association’s (NHFA) 2007 Retail Performance Report, the mattress category was a top performer in furniture stores in 2006, with inventory turns of 4.5 times, compared to an average of 3.0 times for all categories.
Bedding also had 341.1 percent Gross Margin Return on Inventory (GMROI) rating, coming in second only to motion furniture (not including recliners), which had a 363.5 percent GMROI. Compare bedding’s rating to the general GMROI for all home furnishings categories (237.9 percent) and you’ll see the resilience the category has enjoyed within the industry.
In total store sales, bedding came in third at 11.4 percent, behind upholstery’s 17 percent and bedroom’s 13.1 percent. But bedding’s gross margin was strong at 46.2 percent, second only to lamps and lighting, which had a slightly better 47.2 percent.
According to the NHFA research, small retailers did particularly well with bedding, with an average 500.2 percent GRMOI and inventory turns of 5.1 times. An impressive 19.4 percent of all small store sales were in bedding, making this the strongest category for such businesses.
Bigger stores fared well with bedding too: Those with annual sales in the $5 million to $25 million range recorded 47 percent GRMOI, while stores with more than $25 million a year fared best at turns, with an average of 6.6 times.
For more information on the NHFA report, go to nhfa.org.
Getting Moody Over Bedding
The NHFA stats aren’t the only indicator of not-bad times ahead for bedding: Moody’s Investors Service (moodys.com) recently released a special report that predicts the category will likely hold up better than other products in 2008.
While Moody’s overall outlook for home furnishings is somewhat negative, the firm expects mattresses to be the least-affected category during these tough times.
The reason: With the tightening of budgets due to a soft economy, and rising prices for gas and other necessities, consumers are going to cut back on buying products that are nonessential or can be put off until later.
These “nonessential” purchases include recreational products such as sports equipment, software, toys and game systems. Sales of appliances will be moderately affected, Moody’s predicts, more so than mattresses which are, obviously, a necessity. It’s also worth noting that Moody’s rated furniture as the second most vulnerable industry, ahead only of recreational products.
While consumers may not be as quick to replace older mattresses as they have been in the past, the fact remains: When they need new bedding, they’ll bite the bullet and buy new bedding, probably choosing it over less urgently needed purchases.
That’s good news, along with the NHFA findings, for the many furniture retailers who carry bedding. Armed with this information, you may want to boost your bedding offerings, and boost your promotional efforts to emphasize this highly profitable category.
May 31,
2008 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on June 2008
Modern parent that he is, Bob Masin refused to push his son into the family business. But in 2001, the father couldn’t help but give Dave Masin a little nudge.
That year, of course, Americans absorbed the horrific shock of a major terrorist attack on U.S. soil. Suddenly the unseen enemy, the possibility of war, and the downturn in the economy all conspired to make us feel far less secure. The Masins, like every other American family, and every other American family running a business, had all this to contend with, but two other unforeseen disasters as well.
In February, in the midst of the winter sale at their original store in downtown Seattle’s Pioneer Square, Bob Masin heard a loud cracking sound. Then the store began to shake, the customers started to scream, and the china cabinets fell to the floor. The earthquake measured 6.8 on the Richter scale. No one was hurt, but $300,000 worth of inventory was lost. The store closed for a week.
In December of that same year, Masins’ suburban Seattle store burned nearly to the ground. Bob Masin and his family were vacationing in Hawaii when he got the call from his sister.
“There’s a fire at the Bellevue store,” she said.
“Make sure the fire department knows,” he said, picturing a few flames in a dumpster.
“No,” she said. “The whole store is burning.”
The losses were in the millions. Masins would never return to that location and spent two years building a new store several blocks away.
Soon after, Bob Masin called his son, then five years out of college and working for an Internet start-up in San Francisco. Dave Masin had expressed interest some years before in eventually joining the family business, but he didn’t know when.
“Now,” his father suggested, “might be a very good time.”
Dave Masin took his place with the company in April of 2002, becoming the fourth generation of Masins at Masins. A marketing and communications major, Dave urged a fresher look for the retailer, and more contemporary offerings. And as the economy soured, father and son together added a more affordable line to their decidedly upscale product mix. Though these changes seemed to strengthen the retailer, Masins, in today’s tough climate, suffers like nearly every other home furnishings business. Though sales grew at 20 percent during the past five years, they were flat in 2007.
But absent at Masins is the anxiety and pessimism that seem to float like a dark cloud over so many other independent furniture retailers.
Why? A long history provides perspective, the Masins said.
The company is a landmark Seattle brand, and celebrates 81 years in business this year. The stores have weathered recessions, the Depression, earthquakes and fire—and flourished nonetheless. The family can rely on the deep-seated confidence that only time and experience can offer.
But the Masins can also rely on something even less tangible.
“We have a passion for this business that makes me wonder what else in the world we could possibly do,” said Bob Masin. What the Masins convey above all else is the family’s sheer enjoyment of running their business—as a family. Even as sales slump, they still sound as if they’re having a terrific time.
They joke about how Dave won “employee of the year” his second year on the job, and how Bob has, to this day, never won. Dave praises and teases his father about his willingness to embrace new technology, given, well, his advanced age. And together they gloat about CEO Ben Masin—Bob’s father and Dave’s grandfather—and how the 88-year-old still reports to work every single day of the week.
“He’ll arrive about 11 a.m. He’ll walk around. Talk to the designers. Talk to the customers. Take a nap. Then balance his checkbook with an adding machine,” said Dave Masin.
Ben Masin, whose own father founded the business, is a living, breathing, daily reminder that Masins has a proud history.
It began in 1927, with Ben Masin’s father, who had immigrated to Seattle from Latvia. Known as Eman Masin—his actual first name was mangled by immigration officials—he would walk down to the railroad tracks and buy inexpensive damaged goods, dented cans and shoes in ripped boxes. Then he would sell them from his home in downtown Seattle.
The young Eman Masin got his big break when a railroad car filled with damaged furniture pulled into the station. He couldn’t afford to buy it outright, but worked out a payment plan. The profit far exceeded what he had made off the dented cans, and it wasn’t too long before he began buying new furniture and had a store separate from his home, just south of downtown: E. Masin Furniture was born.
In the post-war years, Eman Masin and his son Ben purchased their first building in what was then a rundown neighborhood but is now one of Seattle’s premier shopping and cultural destinations—Pioneer Square.
“It was a skid row, and the only place they could get the square footage they needed,” said Bob Masin.
Filling that space proved a monumental challenge. Manufac-turers shunned them, unable to see the potential in the fledgling business. But Ben Masin gave his father a piece of counterintuitive yet sage advice: Try for more upscale lines, lines that don’t have a strong presence in Seattle.
The idea worked.
“It was a different customer base, and there were lines available,” said Bob Masin. What Eman also established was a family practice that has served the Masins well over the decades—the willingness of elder Masins to take seriously the counsel of the young.
“We don’t always agree,” said Bob Masin, explaining the formula for family harmony. “But we can wait to move forward until we do.”
In the post-war years, Masins grew with Seattle, which grew with Boeing, the military aircraft company that transformed itself into the leading global supplier of commercial planes. But the city’s boom ended at just about the time that Bob Masin was ready to join the workforce. In 1970 Boeing saw the cancellation of its supersonic transport program, and with it, the loss of more than 40,000 jobs.
“It was terrible in Seattle. No one came to the school to interview,” said Bob Masin, who graduated from the University of Washington in 1971 with a major in communications and advertising. He had no offers.
Well, there was one offer—from his father. But the family business that is now his passion held little attraction at the time. Unhappily, Bob Masin took his seat at a metal desk next to his father’s secretary at a starting salary of $550 a month.
“We had days when there were literally no customers in the store,” Bob Masin remembered. “I thought, ‘How do I get out of here?’ or ‘How can I change this place?’”
Bob Masin could imagine a better Masins, a Masins where he might actually enjoy working. He argued for a different type of home furnishings store, with very high-end furniture, a spectacular presentation and designers on staff to help customers plan their homes.
Ben Masin was open to his son’s ideas—perhaps because his own father, Eman Masin, had listened to him a generation earlier, when he too had advocated taking the store in a more upscale direction.
So Masins hired designers, revamped the store, and in 1972 Ben and Bob Masin headed to High Point—Bob’s first trip—where they made the first substantial purchase to reflect their new image: $25,000 worth of Henredon.
“We were so nervous, we didn’t sleep for two days,” Bob Masin remembered. “We didn’t know whether we could sell it or not.”
The Henredon sold well. Customers made good use of the staff designers. Sales increased and Bob Masin got a raise.
“Now I was having fun,” he said. “It became rewarding.”
In 1981 Masins opened its second location in the burgeoning Eastside suburb of Bellevue. The family rented out 8,000 square feet in a two-story building, but unsure of its potential, left the top floor empty. Within a few months, they had showrooms on both floors. Seven years later, they moved to a 14,000-square-foot Bellevue location.
Then it was 2001, the year the earthquake struck the Pioneer Square store and the fire gutted the Bellevue store. The earthquake, in December, brought major upheaval, but also touching efforts from reps and staff.
“Every rep we had came in,” said Bob Masin. The reps brought pizza and for four days the whole staff worked to clean up the broken furniture and glass.
The fire, in February, presented longer-term challenges. It was one of the hottest in the history of Bellevue, according to the fire department, and to this day the cause is unknown. Little could be salvaged and it made sense to move. All the Bellevue employees—15—were moved to the downtown Seattle store as the Masins worked with architects and builders on a contemporary two-story brick building two blocks away and twice the size of the location that burned. The new building, which also includes 60 condominiums, is not owned by the Masins but is known as Masins on Main.
The Masins carry on, cutting costs where they can these days, and proud that they have not laid anyone off. The economy will eventually improve, they know, and when it does, they will have two solid stores and a reputation to build on. But even when the economy lifts, they have no plans to expand.
“We’re too hands-on for that,” said Bob Masin, who said he could only imagine more Masins stores if more Masins went into the business.
Lesley Masin, Dave’s younger sister, works in Southern California, and leans more toward the artistic side of business than management, said her father. But there is also hope in a fifth generation of Masins. Dave Masin and his wife Anne are expecting their first child, a baby boy, this spring.
May 31,
2008 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on June 2008
This month, we’ve got the great and the ugly in our mail bag. We’ve got one retailer complaining about our edgy, out-of-the-rhombus cover from April. To be honest, we heard from three other folks during the week of High Point Market who weren’t thrilled with our cover. Everyone else loved it almost as much as we did. On the great side of comments, a design consultant in Florida shares her view on winning customer service. Read on for insight.
I am offended by your most recent cover (April, 2008). There is no need to stoop to conquer. This is an incredible industry. We don’t need your brand of journalism or poor use of the English language.
Cancel my two subscriptions. They really are worth what I paid for them.
Richard E. Andrews
President, Andrews Furniture, Abilene, Texas
Yes, we realized we were pushing the envelope with our April cover; that was the point. Thank you for your comments. Mr. Andrews’ subscriptions have been deleted from our list.
SheilaI completely enjoyed the publisher’s letter this month (March, 2008). I was so unsure; all the while I read what the eternal question at the end would be. To my delight, it was about capturing a guest opportunity and turning it into a lovely memory. It is our favorite subject here at La-Z-Boy!
When I was 13 years old, I went to buy my first pair of jeans by myself. Growing up in the ‘70s in a small town in New England, our choices were somewhat limited and oftentimes, we would have to resort to special ordering from our local store. Remember, it was the ‘70s, and by the time the new joy frock would arrive, it would be two seasons later.
I had received an enormous amount of money for my 13th birthday on Jan. 1, $35, and could not wait to order my “elephant leg” bell bottom jeans. I called my best friend and we took the half-mile walk, uphill, in the snow (no kidding) to the town’s most prestigious store. Julie and I excitedly walked in from the cold to an awaiting clerk who was angry because we had opened the door and let the cold air in and that WE were her only customers. How could we have the nerve to come into the store alone? Surely she would take it up with our irresponsible parents.
I told her what I was looking for and she rolled her eyes and took us to the rack where there were three sizes to choose from, none of them mine or Julie’s. I knew that other friends had special-ordered and asked her if she would order them for me. I have always been a “big-boned” girl, and as she scanned me up and down, she snarled the words, “I don’t think they came that big.” I was crushed, embarrassed, ashamed and 13. Julie and I promptly left the store and hurried home. Once alone in my room, I cried. I knew that day I would try never to make anyone else feel the way I had.
When I was 16, I got my first job at that very same store. It was Christmas time and I worked wrapping the gifts our customers were buying. It was a lot of fun and a lot of work but NO ONE walked away from my department with a frown on their face.
I have been in sales most of my life and love it. I am proudly working at La-Z-Boy Furniture Galleries and Design Center in Ocoee, Fla. Our store is filled with people who genuinely care about the quality of the lives of the people who walk through our front door. The experience here is easy, engaging, informative and hospitable, and comes filled with as much relationship as you desire from your consultant. Relationships between employees and guests go much further than the transaction; we help one another in life as well. We treat each person as though they are the ONLY guest we will have that day. Many of our associates have been with La-Z-Boy for years and have transferred from other states to continue their careers with the most respected name in furniture year after year.
Our goal is to make your day better because we were in it, so the only question that remains is: When will you be visiting us, so that we may change your mind about your next home furnishings experience?
Susan Swain
Design Consultant, La-Z-Boy Furniture Galleries, Ocoee, Fla.