FT part 2

38
FEBRUARY 23, 2015
FURNITURETODAY.COM
INDUSTRY NEWS
Freezing weather hurts retail sales
continued from p1
side of the street since the record
storms hit, dumping about nine
feet on the city so far this winter.
What’s more, some of that store’s
employees don’t have cars and
typically take public transportation into work — but the system
was shut down for three days,
and was still operating with limited service last week.
The snow situation is worse in
Middleton, Mass., where Circle’s
newest store is located and
where the snow piles are so high,
passersby can only make out
the upper level of the two-story
showroom from the road.
One of the biggest effects on
business has been with delivery.
Circle customers have been calling and canceling deliveries every
day because the trucks can’t get
down the residential streets. De-
liveries in the city of Boston are
nearly impossible, she said.
Boston has had plenty of terrible snows in years past, she said,
but this time is different because
the temperature has remained so
cold and the storms have been
so heavy and close together that
there’s no time for anything to
melt.
“The other day on the news
they were joking, calling it balmy
in Boston because we were in the
double digits,” Burns said. “It
was 10 degrees.”
In Erie, Pa., John Schultz, president of the 100,000-square-foot
John V. Shultz, said his company
is used to this kind of weather
and lake-effect snow. Last winter
Erie was crowned the snowiest
city in the country by website
goldensnowglobe.com. (It was
knocked out of first place by three
Massachusetts cities this season.)
“We never close,” Shultz said.
“This is just normal life here.”
But he did wish a blizzard of
18 inches of snow and belowzero temperatures hadn’t hit on
the recent Saturday of Presidents
Day Weekend.
“That hurt us,” he said. Traffic and sales were off about 50%
that day. Sunday was clear, but
the temperature was minus 18.
Traffic was down again Sunday, but fortunately, a higher than
average close ratio and higher
average tickets helped bolster that
day’s sales performance. Presidents Day Monday came back
even stronger, giving the store
results that were about even with
the previous year’s strong fourday holiday weekend.
“I think it would have been a
lot better if the weather had co-
American Furniture booming
continued from p1
Al Wiygul, CEO of the manufacturer, told Furniture/Today on
a recent visit to the company’s
plant here.
Since Wiygul and Randy
Spak, vice president of sales,
joined the company in November and December of 2013
respectively, the company has
experienced seven consecutive
quarters of growth, with sales rising from approximately $92 million in 2013 to their current level
around $130 million. However,
according to Spak, since the beginning of the fourth quarter of
2014 sales have really exploded
— the result of “a perfect storm
of factors, but in a good way.”
First, Spak attributed the
growth to a revamping of the
company’s product lines to make
them more attractive to both
dealers and the end consumer.
He said the company has upgraded its fabrics to create better
value. “We’re not the lowest
price but we offer compelling
value,” he said.
The company has also made
logistics a priority, offering delivery on virtually any item in the
line within a two-to-three-week
window. It’s this commitment
that underpins the company’s
rapid hiring since the beginning
of the year as its looks to maintain existing service levels and
New motion upholstery lines are under construction at
American Furniture’s Pontotoc, Miss., plant
delivery windows in the face of
growing sales.
American, which manufactures here in Pontotoc, Miss.,
and keeps a deep inventory of
cut and sew kits, has also been
a beneficiary of the port slowdown that has crippled West
Coast ports since the fall and
led some competitors to run
short of imported kits and other
components. And while the port
slowdown is expected to be a
temporary situation, Spak said
he believes the impact on the
company’s sales will be more
enduring.
“A number of retailers have
been burned by this situation and
they’re looking at alternatives,”
Spak said. “If your landed price
value is close you’re going to get
all that business.”
He added that many of the
accounts the company has been
adding, which include several
Top 100 players, have helped
move the needle significantly
with orders of “several million
at cost.”
Wiygul said American’s sales
were up 25% in 2014 and he
expects annualized sales growth
of at least 10% to 15% over the
next three to five years.
Circle Furniture was planning a delivery on this snowy street in
Cambridge, Mass., but had to reschedule.
operated, especially on Saturday,
Shultz said. “We would have had
an incredible weekend.”
Michigan has been hit with
heavy snow this season too. Business was off to a good start in
January, but 17 inches of snowfall “just whacked the first four
days” of February, said Tom Lias,
president of Farmington Hills,
Mich.-based Gorman’s Home
Furnishings and Interior Design,
with stores in greater Detroit and
Grand Rapids, Mich.
“We’re starting to get it back,”
he said, adding that traffic has
picked up and the upscale retailer’s designers have been working through their backlogs. Lias
expects Gorman’s to be pretty
close to this past February’s sales
numbers by the time the month
is out.
“But it’s no fun clawing your
way back every month,” he
added.
Detroit neighbor Art Van Furniture hasn’t really been affected
by the weather yet, according to
Diane Charles, director of corporate communications for the Warren, Mich.-based Top 100 chain.
That’s not counting the
impact from Art Van’s “Let it
Snow” promotion, which the
retailer held in its Chicago, Fort
Wayne, Ind., and Toledo, Ohio,
markets recently. The promotion led to a $2.5 million freefurniture payout to thousands
of customers after 10 inches or
more of snow fell in all of those
markets on Super Bowl Sunday
(customers only needed three
inches to collect). The promotion was insured, so Art Van
was glad to see the snow.
While some say it’s difficult to
get back all of the business lost to
bad weather that keeps consumers away, back in Boston, Peggy
Burns is holding out hope. She
said furniture stores are in a much
better position to recoup lost business than, say, restaurants, which
can’t sell twice as many meals to
make up for bad days.
“This is what I’m telling
myself,” Burns said. “I’m hoping people have been cooped up
in their homes, looking at their
furniture and saying. ‘What the
(heck) are we doing? If we’re going to be stuck at home, we have
to have better looking furniture,
more comfortable furniture.
We’ve got to prepare for the next
Snowmageddon.’”
Finance Workshop to help retailers
continued from p6
expertise at helping retailers transition consumers who have not
qualified for primary finance options into additional options without putting shoppers through a
difficult or embarrassing rejection.
To meet the needs of those
consumers who do not qualify for
either primary or secondary lending options, the workshop will offer a session entitled, “Maximizing
Sales through Waterfall Financ-
ing.” Also sometimes referred to
as cascade financing, this emerging finance option has evolved
in recent years from something
once viewed as the practice of
“dirty window” retail stores into
an option that can effectively fit
the business model of mainstream
furniture retailers.
The panel will include Blake
Wakefield, president of Progressive Leasing; Steve McKinley,
divisional vice president of Accep-
tanceNOW, and Bob Millerberg,
CEO and co-founder of Crest
Financial.
The group will discuss strategies for transitioning potential
furniture purchasers through the
financing process as well as best
practices for integrating these
options within existing retailer
finance programs.
To register or for more information go to www.furnituretoday.
com/finance.