HGO Merchandiser Winter 2016

Michael Knell’s

HGO merchandiser WINTER 2016

HomeGoodsOnline.ca

Volume Five, Issue 4

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ADVERTISING SUPPLEMENT

Jaymar’s 60th Anniversary Catalogue

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Spotlight: Phoenix AMD Working with Designers High Point Highlights Stubbe’s new appliance centre Dennis Novosel Retires?

LEON’S FINALLY GOES

coast to coast

CONTENTS

6

EDITOR’S LETTER SOMETHING TO THINK ABOUT

When the decision was made to launch this electronic magazine, one of the intentions was to provide Canadian furniture, mattress and major retailers with a platform where ideas they could use to build their businesses could be found. Our Spotlight on Phoenix AMD International and our introduction of interior designer and TV personality Jane Lockhart as our newest contributor should help in this regard.

8

SPOTLIGHT THE DRIVE TO GROW PROFIT

Albert Marrache firmly believes retailers, particularly independent retailers, should stop trying to grow sales. Their focus should be to grow profits. His friend and partner, Dawn Rowe also believes this. And, for the past 25 years, they have built their business – added value resource Phoenix AMD International – around this fairly simple but nonetheless unorthodox idea.

16

HIGHLIGHTS HIGH POINT MARKET

Some 80 or so Canadian furniture makers and industry resources took part in October’s semi-annual High Point Market. Over these few pages, HGO gives a sample of what they had to offer.

20

PEOPLE DENNIS NOVOSEL RETIRES

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ADVERTISING SUPPLEMENT Jaymar, the iconic Canadian leather upholstery maker is celebrating its 60th anniversary in 2016.

Home Goods Online is proud to present and host a new catalogue created just for the occasion.

It can be found after page 27.

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4 HGO merchandiser

The founder of Stoney Creek Furniture has accomplished a lot over the past 50 years. In addition to building one of the few destination furniture stores in Canada, he has a number of firsts to his name, such as being the first Canadian president of what is now the Home Furnishings Association. He says he’s looking forward to what the next 50 years will bring.

26

ON RETAIL GETTING OUT ALIVE

Succession is a critical component to any business owner’s long term plan.

Retiring in comfort and leaving behind a thriving business is worthy goal in itself.

But there’s so much that can go wrong.

Our retail guru, Donald Cooper has a few thoughts on the subject.

32

STORES LEON’S IS CHANGING AND GROWING

In the wake of a deal with Sears Canada and for the first time in its 107-year history, Leon’s became a truly national retailer with stores from Vancouver Island to Newfoundland recently. But that’s not the most interesting thing that’s happened recently to Canada’s largest fullline furniture retailer.

35

IDEAS DESIGNERS: RETAIL’S SECRET WEAPON

Finding new business is everyone’s top priority. In her first essay for Home Goods Online, Jane Lockhart, wellknown television personality, author and furniture maker, believes there’s one resource many independent retailers many have overlooked – the local interior design community. Here she offers a few suggestions about why and how retailers should build bridges to reach them.

39

APPLIANCES REIMAGING APPLIANCES

The ‘store-within-the-store’ concept has been around for a while now. But BrandSource injected new life into an old idea with a new scheme designed to enhance both sales and margins for those members wanting to revitalise their store’s appliance business while girding them to handle new competitive forces. Their first effort came into fruition on the floor at Stubbe’s BrandSource Home Furnishings in Tillsonburg, Ontario.

42 ADVERTISERS’ INDEX 43 INDUSTRY CALENDAR

ON OUR COVER: Leon’s Furniture honoured local cultures when it opened its first four stores in British Columbia a few weeks ago. The people of the Haida Gwaii were celebrated at the grand opening of the new outlet in Victoria.

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HomeGoodsOnline.ca

5

EDITOR’S LETTER

HGO merchandiser WINTER 2016 • VOLUME FIVE, ISSUE 4

MICHAEL J. KNELL

SOMETHING TO THINK ABOUT When the decision was made to launch this electronic magazine, one of the intentions was to provide Canadian furniture, mattress and major retailers with a platform where ideas they could use to build their businesses could be found.

O

UR SPOTLIGHT THIS TIME OUT IS ON PHOENIX AMD

International which is celebrating its 25th anniversary in 2016.

From Albert Marrache’s point of view, retailers are still focused on attracting new customers and growing top line sales, when perhaps they should be more focused on building long-term relationships with the customers who are already in their store and growing their profit instead. He argues it’s very expensive to get a new customer through the door and is more cost efficient to sell more to a customer who has already demonstrated a willingness to buy from you.

In many ways, his thoughts are contrary to other industry leaders and influences but these ideas are worth listening to – one never knows what one might learn.

He, and his partner, Dawn Rowe, are also fanatics about training and believe it’s something that must be ongoing and organised to be truly effective. Albert also believes the training programs they have developed are the key to their success.

For a change of pace, this issue we welcome Jane Lockhart to the masthead.

Jane is a well-known interior designer, author and television personality who made her mark headlining Colour Confidential for HGTV. In her first essay for the Merchandiser, Jane offers insights in why independent retailers should seek out and build relationships with their local interior designers. Historically, many retailers have seen interior designers as either competitors or a nuisance. But the world has changed. As consumer awareness of design has increased, thanks to media outlets such as HGTV, she has become more willing to hire a designer to help create her living space.

Lockhart’s contention is today’s interior designers are professionals. They have profession-level education and are looking to partner with other local businesses – including furniture, mattress and major appliance retailers – as part of their goal to serve the customer profitably and well.

Furniture store sales have been on the rise over the last couple of years, but it’s been a tough go getting there. Hopefully, Albert and Jane have given you something to think about.

Michael J. Knell Publisher & Editor mknell@homegoodsonline.ca

6 HGO merchandiser

ISSN 2291-4765

www.HomeGoodsOnline.ca PUBLISHER & EDITOR Michael J. Knell mknell@homegoodsonline.ca MARKETING DIRECTOR Corrie-Ann Knell marketing@homegoodsonline.ca CONTRIBUTORS Donald Cooper Jane Lockhart Albert Marrache ART DIRECTOR Samantha Edwards Sam I Am Creative samiamcreative@gmail.com IT DIRECTOR Jayme Cousins In House Logic websmith@inhouselogic.com PUBLISHED BY Windsor Bay Communications Inc. P.O. Box 3023, 120 Ontario Street Brighton, Ontario K0K 1H0 T: 613.475.4704 F: 613.475.0829 Michael J. Knell, Managing Partner PUBLISHERS OF

HGO This Week Home Goods Online.ca © 2016 Windsor Bay Communications Inc. All rights reserved.

Windsor Bay Communications does not accept any responsibility or liability for any mistakes or misprints herein, regardless of whether such errors are the result of negligence, accident or any other cause whatsoever. Reproduction, in whole or in part, of this magazine is strictly forbidden without the prior written permission of the publisher.

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7

SPOTLIGHT

The drive to grow PROFIT For the past 25 years, Phoenix AMD International has built a thriving, profitable business finding ways to make independent retailers more profitable, without necessarily having to grow sales. BY MICHAEL J. KNELL

LBERT MARRACHE FIRMLY BELIEVES

For nine out of the past ten years, Phoenix AMD International has received the Supplier Recognition Award from Mega Group for the service category. The award is given to those vendors who are voted best by in areas such as customer service and training. Here, Benoit Simard (left), president of Mega and Michael Vancura (right), the group’s vice president of retail present the award to Dawn Rowe and Albert Marrache during their 2015 convention in Saskatoon.

8 HGO merchandiser

retailers, particularly independent retailers, should stop trying to grow sales. Their focus should be to grow profits. His friend and partner, Dawn Rowe also believes this. And, for the past 25 years, they have built their business around this fairly simple but nonetheless unorthodox idea.

In many ways, this is a very different industry from the one they entered when they founded Phoenix AMD International in 1991.

But their almost evangelical devotion to the idea that profits need to grow, not only or just only top line sales, hasn’t changed at all.

Marrache admits getting into what’s now usually referred to as the added-value sector was a bit odd, especially for someone as entrepreneurial as himself. After all, it’s not a business with a high public profile – in fact; there are probably fewer than eight serious category players in all of North America. Phoenix AMD came into being because, by chance, as Marrache was leaving his first and only job in the sector, his exit interview was conducted by the woman who was to become his best friend and partner, Dawn Rowe.

Marrache launched his career in business as Quebec sales representative for Ultra Care Canada, which at the time was one of the power players in the added-value sector. He worked his way up to becoming vice president of sales for North America before deciding to leave the company. Meanwhile, after a stint in retail working for a now defunct competitor to Black’s and Japan Camera, Rowe joined the company in a human resources role and assigned responsibility for conducting Marrache’s exit interview.

“I remember saying to myself, ‘he’s the only guy in the company who is talking to our customers and he’s the one who is resigning’,” she recalls. “We became the best of friends right from that very moment.”

In a confluence of events, the owner of Ultra Care Canada indicated a desire to sell the company and retire. Marrache and Rowe immediately set upon a plan to buy it but before they could present their offer; the assets were sold to one of its U.S.-based competitors.

“We were passionate about the company; we were working with the owner and we cared about our fellow employees,” Marrache recalls.

“We were literally devastated when he sold the assets. To this day, we really don’t know what happened or why.”

In hindsight, both also admit they were also more than annoyed by the news. It was the catalyst prompting them to create Phoenix AMD International, which came into being a few months later.

“At that moment, we wanted to take back our market from the U.S. company that bought Ultra Care,” Rowe says, adding, “We also wanted to build something together…to create something where people could grow using our vision, not someone else’s.”

perate need of a unique product that would not only support their underlying motive – to help the independent retailer make more profit – but was exclusive to Phoenix. And since they were struggling to a gain a foothold, they needed quickly. That’s how and why what is now called the Excelsior brand of mattress protector was created.

“I had never seen a mattress protector in my life,” Marrache says. “At the time, they treated the mattress. So, we decided to put the (antistain) treatment on the protector during the manufacturing process.”

They found a supplier willing to take the chance on creating this new product almost ‘on spec’ so they could test it at the upcoming furniture market in Toronto. He made 1,800 of them. Every one of them – and more – was sold during the fourday trade show. “We were even selling units we hadn’t even ordered yet,” Rowe said.

But their new invention was a big hit with retailers from the start and put the young company on a solid footing. They were first to sell a treated mattress protector with an anti-stain warranty on the mattress – “we literally invented the idea.”

Marrache believes. Since then, Phoenix has added to this category and deepened its assortment to cover a number of sleep scenarios – in fact, mattress protectors treated during the manufacturing process have now become the norm in the added-value sector. }

“ At that moment, we wanted to take back our market from the U.S. company that bought Ultra Care. We also wanted to build something together… to create something where people could grow using our vision, not someone else’s.”

IN THE BEGINNING

For the first six years, it was the exclusive Canadian distributor of Scotch Gard, the fabric protector manufactured by 3M in both Canada and the United States.

Like most newcomers, their more-established competitors didn’t exactly welcome them into the market. “They were loading up retailers with three cans (of protection materials) for the price of two,” Rowe recalls, noting even retailers who embraced their message were having a hard time breaking away to join them because of the more-than-advantageous pricing they were being offered.

They found themselves in des-

Dawn Rowe and Albert Marrache founded addedvalue product and service provider Phoenix AMD International in 1991.

HomeGoodsOnline.ca

9

THE EXCELSIOR ASSORTMENT The Excelsior laundry detergent program has been one of the most successful programs Phoenix AMD has launched over the past decade. Excelsior has become the brand for almost every product in its assortment.

Disaster struck in the late summer of 2014, when a fire broke out destroying their head office facility in Bowmanville. Here, members of the Clarington, Ontario fire department are seen securing the building after the fire had been put out.

Fortunately, there were no injuries. Phoenix AMD International hopes to move back into their renovated head office building in early 2017.

10 HGO merchandiser

“It only took three years before one of our U.S.-based competitors began copying us,” Marrache said.

An act of desperation became the foundation of their business. “We invented the mattress protector with protection out of necessity,” Marrache says. “It really does prove that necessity really is the mother of invention.”

After six years, Phoenix parted company with 3M after its U.S. parent decided to grant distribution rights for Scotchgard to the now defunct StainSafe in the United States, which Rowe and Marrache had sought to help drive their first push into the American market.

Since then, Phoenix has been the distributor of DuPont’s Teflon brand of fabric protection products.

The biggest tragedy to strike was an electrical fire that destroyed the company’s head office in August 2014. No one was injured in the blaze and the company was fully operational two days later and has been housed in temporary quarters even since.

Phoenix expects to move into its newly rebuilt headquarters early in 2017.

In addition to fabric protection and mattress pads, Phoenix AMD’s product assortment today covers all of the added-value categories including extended service plans for both major appliances and electronics; furniture care products; and, detergents for both washing machines and dishwashers. All are marketed under the Excelsior brand name.

Expanding into each of these categories was deliberate and designed to support their fundamental goal of enabling retailers to generate greater profits. “Retailers have multiple lines, especially in Canada,” Marrache points out. “Each of these products – whether it’s fabric protection, a mattress pad, a service plan or detergent – is something that goes with something the retailer has already sold.

It’s designed to help the retailer make more money,” he says, adding each of these also has value to the customer in a real, tangible way.

“My message to retailers is if we’re not helping with all the categories in your store, then we’re not doing our job,” Rowe continues.

For the past decade or so, Phoenix AMD has been developing a strong business in the United States and has partnered with some of the largest and most influential owneroperated retailers south of the 49th parallel. “In fact, the only things were don’t sell in the U.S. are our extended service plans for appliances and electronics,” Marrache says.

FINDING THE RIGHT PARTNERS

Since day one, Marrache and Rowe have chosen to work with independent retailers. Over the past 25 years, Phoenix AMD has occasionally taken on a Canadian national chain. }

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Giving back has always been an important part of Phoenix AMD’s corporate culture.

Each year, it organises a toy drive to benefit children in need in and around Bowmanville, Ontario, which is home to its head office. Here, Dawn Rowe and Albert Marrache are standing immediately to the left of the local fire chief after delivering over $5,000 worth of Christmas presents for local children.

12 HGO merchandiser

None of these partnerships proved sustainable over the long term. Marrache believes there’s a simple reason for this.

“We work best with retailers who are passionate about their business, who are all about quality and service. We partner best with active owners,” he explains, pointing out that when working with the buyers, managers and executives of a big chain the tone of the conversation and the priorities are different.

“It’s not the same; they don’t think the same way owners do.”

This difference in approach is often based on price – they need to move product so that’s where their focus is. “We always loose on price, we never loose on anything else,” Marrache says.

Rowe also notes the Phoenix approach has always demanded an owner-to-owner relationship, that’s where the strength in building lies. “We want to help people. We are not really interested in selling a product,” she explains “We were always interested in helping retailers make more money – that’s never wavered. It’s always been about the customer.”

From time-to-time, consumer groups challenge the notion of extended service plans and claim they are not needed and, in some cases, accuse providers of being underhanded at the very least. Marrache has a simple counter argument. “People who own their homes buy house insurance. They might buy house insurance for 30 years and never make a claim. But these groups never say house insurance is a waste of money,” he says, noting financial institutions won’t hold a mortgage on a house unless the borrower proves it’s fully and properly insured.

Modern major appliances and consumer electronics are highly advance pieces of technology. Repairs are costly and often the consumer just has to make a single claim

against his extended warranty to justify the cost of buying it in the first place. “Giving the consumer that piece of mind has great value and is a great service,” Marrache says.

He also argues ensuring the purchase of a complex piece of household equipment – such as a refrigerator, washing machine or home theatre system – is well protected should be seen as the final piece in providing the ultimate ‘shopping experience’ today’s customer is demanding.

“Servicing has become more expensive and retailers cannot afford to give that service on their own. What we’re offering the consumer is the ability to have their new machine serviced for five years without cost,” Marrache says.

“It’s all just a matter of convenience for the consumer.”

Rowe adds Phoenix AMD International is quite proud of the Triple ‘A’ rating they have received from the Better Business Bureau as a supplier extended service plans.

GIVING BACK TO THE COMMUNITY

Given their focus on profit and their belief that profit should come before sales, it might surprise most to learn Marrache and Rowe give away most of Phoenix AMD’s profit every year.

“We donate a significant portion of our net profits to the community and what we don’t donate, we re-invest in the company,” Rowe explains. “We don’t have a killer instinct and are givers not takers.”

Both partners believe it’s almost a moral imperative to give back to the community. And the list of things they’re involved gets longer every year.

Almost every year since they were founded, Phoenix AMD’s charitable endeavours were centred on a toy drive held each Christmas to ensure local underprivileged children were

THE CHOICE IS CLEAR:

make profit or push water uphill

The path to greater profit lies with the customer who is already in the retailer’s store. In this essay first published in 2010, Albert Marrache explains why he believes this is so. BY ALBERT MARRACHE

E

very independent furniture and mattress retailer in North America has the same problem.

Each is asking himself: “How do I increase profits without adding more cost?” This has become a much bigger issue over the past few years because there are fewer and fewer people walking into furniture stores.

Historically, there have been four ways for the average independent retailer to boost profitability: buy better; exercise better control over overhead; get more new customers; and, capitalise on existing customers.

In my experience, most independent retailers focus on the first three.

Unfortunately, these three areas are where the owner/operator has the least control.

Cost cutting and overhead reductions can impact profits, but there’s a limit to what can be done – a retailer can’t reduce property taxes or utility bills, for example. Staff can be cut, but how long before that means the store can’t sell or service the customer properly?

Business owners have no control of the economy. In a tough economy finding new customers and getting them into your store is a little like pushing water uphill.

To make more profit, a retailer needs to sell more – which is something better buying, more cost controls and a poor economy won’t produce. Since there are fewer consumers in the market, the focus needs to be on the customer in the store right now. This person is saying she’s ready to buy

and the economy isn’t necessarily a pressing issue for her and her family.

Statistically, an average independent store is going to close three out of every ten walk-ins. (As an aside, do you know how many potential customers walk through your doors every day? If not, start finding out for only that which can be measured can be improved.)

What would a furniture retailer’s top line sales and bottom line profits look like if the sales staff were to close four in ten? What would they be if just one item was added to every invoice written?

To accomplish this, there are just three things to do: determine what more to sell to a customer; have the products on hand; and, train the sales staff to be capable of selling more.

These three things are absolutely within the store owner’s control, even though most believe the opposite to be true. The control is gained by coaching the sales staff and then monitoring their performance – if the store owner doesn’t control the sales staff, he or she will lose control of his business because the sales staff has taken control of the process.

When the owner isn’t in control of the sales process, he starts managing the store around the sales staff and creates ‘work-arounds’ to make up for missing profit dollars.

Store owners need to train and control their sales staff. Show them the desired customer experience and set the standards for every customer encounter – have them do

Here a much younger Albert Marrache is seen chatting with the company’s former sales manager for Western Canada, Brad Tripp, in their booth at a Canadian Furniture Show sometime in the mid1990s. The show remained an important part of the company’s marketing efforts until quite recently.

role-playing and other techniques to sharpen their sales skills and them create an incentive plan for those who consistently up-sell.

If the sales person isn’t presenting an add-on with every sales – whether its stain protection, mattress protection, lamps, accessories or an extended service plan for a major appliance – he or she is leaving profit dollars on the table and, in essence, pushing water up hill. Once the training plan is devised and implemented, monitor and track results every day.

Review each day’s invoices without fail and be ambitious.

Profits forgive all mistakes and the best way to increase profits is to increase sales to the customer who is already in your store.

ALBERT MARRACHE is president

and co-founder of Phoenix AMD International – a Canadian valueadded product and service supplier based in Bowmanville, Ontario.

He can be reached via e-mail at phoenixmontreal@phoenixamd.com.

HomeGoodsOnline.ca

13

For the past several years, Phoenix AMD International has had a growing business in the United States.

Here is the company’s presentation at a recent PrimeTime event, organised by Nationwide Marketing Group, the largest furniture, mattress and appliance buying group in the U.S.

14 HGO merchandiser

remembered during the Holiday Season. Usually, Phoenix works with their local fire departments and the Salvation Army to distribute what was raised.

The most public event held over the past couple of years has been the Wounded Warrior promotion held in honour of two members of the Canadian Armed Forces who were assassinated by two extremely distributed individuals in late 2014. Altogether over the two campaigns, the effort raised almost $100,000 which was divided between two organisations dedicated to aiding wounded veterans and their families: True Patriot Love in Canada and Wounded Warriors Family Support in the U.S. The company is currently deciding whether to stage the event again in 2017.

They have also been big supporters of the Rouge Valley Hospital Foundation. A few years ago, the hospital needed new baby warmers for its pediatric wing. After providing two units – at a cost of about $35,000 each – they then challenged other local businesses to get involved in finding the money the rest.

The Maurice Tanguay Foundation, operated by one of their largest retail partners – Ameublement Tanguay – and dedicated top assisting handicapped children throughout Quebec is also a beneficiary of their generosity.

They also give regularly to women’s shelters, the Children’s Wish Foundation, the Breast Cancer Foundation as well as the Heart &

Stroke Foundation. They also give to locally in the community’s where they have established retail partners.

“We’ve always tried to give back,” Rowe says.

“We don’t do it for publicity. We do it because it needs to be done.”

When pressed, they admit Phoenix AMD often gives back as much as 50% of its profit to the communities in which they operate. “The rest is always re-invested in the business,” Marrache says.

LOOKING TO THE FUTURE

Both Marrache and Rowe want Phoenix AMD International to continue growing for some time to come. While not verbalising the sentiment, both believe the company’s core mission will still have validity 25 years now.

Retailers will still need to put profit first. In fact, both believe the mission is still the same as it was in 1991.

“At the core, there’s not a big difference between Phoenix as it was then and how it is now,” he said. “But it is evolving. We are using technology, we are using better training but the message hasn’t changed.” HGO MICHAEL J. KNELL is the publisher and editor

of Home Goods Online and all of its platforms.

He has observed, researched and written about Canada’s furniture and mattress industry for the past three decades.

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15

HIGHLIGHTS

Some 80 Canadian furniture makers and industry resources took part in October’s semi-annual High Point Market.

Seen here is just a sample of what they had to offer.

HIGH POINT MARKET

Barrymore Furniture

High-end custom upholstery house Barrymore Furniture showed off this new wing chair at the October market.

16 HGO merchandiser

Bermex

The Hatteras casual dining collection from Bermex features light, almost bleached colours that are a treat to the eye as well as Sunbrella fabrics on its upholstered seats.

Bugatti Designs

Montreal-based upholstery maker Bugatti Designs created Pasha, a reclining sofa group covered in this rich purple leather.

South Shore

South Shore launched Morice, a retro-chic bedroom furniture collection that fits into the current ‘mid-century modern’ style popular with consumers, was one of 17 new groups the e-commerce specialist unveiled.

Sunpan Modern Home

The Everleigh sideboard from Sunpan Modern Home balances fine form and function with wine storage and display through a tempered glass top, along with ample drawer and shelving space that sits on a stainless steel base with a dark zebra brown finish.

Jaymar

This upholstered bed helped mark Jaymar’s return to the High Point Market after a one-year absence.

HomeGoodsOnline.ca

17

Gus Design Group

Gus Design Group’s Aubrey sofa embodies chic sophistication with piped edges, a buttontufted seat cushion and three luxurious back cushions. Its angled back and slim sled base gives it a clean, refined silhouette which evokes Scandinavian design influences.

Amisco

Metal specialist Amisco added these kitchen/dining stools to its assortment.

Durham Furniture

Modern Simplicity, a new solid maple bedroom collection from Durham Furniture, features crisp geometric lines and urban-inspired details.

Dorel

Dorel’s Signature Sleep unit unveiled this bed with storage – the mattress lifts to reveal the space. HGO

18 HGO merchandiser

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HomeGoodsOnline.ca

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19

PEOPLE

DENNIS D NOVOSEL

retires

The founder of Stoney Creek Furniture has accomplished a lot in 50 years. In addition to building one of the few destination furniture stores in Canada, he has a number of firsts to his name, such first Canadian president of the Home Furnishings Association.

BY MICHAEL J. KNELL

20 HGO merchandiser

ENNIS NOVOSEL IS RETIRING. AFTER

50 years in business, the 68-year-old furniture retailer is stepping away from the full-time management of his various interests, the most notable being Stoney Creek Furniture, the destination store he founded in 1969 and which at one point in the early 2000s was thought to be the largest showroom of its kind in Canada.

“2016 was my 50th year in business,” he observed in an interview with Home Good Online a few weeks ago. “And I need to have another 50 years to do everything I want to do.”

Novosel – who the writer of this article has been fortunate to know for the best part of 30 years – has never been one to sit still for very long. In a profile written for Furniture Today in early 2006, I described him as having “itchy feet” as there was a point in the 1980s and 1990s where he was becoming as well known for his travels to exotic places such as India, Nepal, Africa and elsewhere as for running what was one of the handful of destination furniture stores in Canada.

The stories surrounding the early years of Stoney Creek Furniture (SCF) are well known.

Novosel’s entrepreneurial streak emerged in high school when he bought a used pick-up truck and started a one-man delivery service that soon evolved into a small new-and-

In 2010, Dennis Novosel was named Retailer of the Year by what is now called the Home Furnishings Association. He was the first Canadian to be awarded this prestigious honour by the California-based association of mainly U.S. furniture retailers.

He is seen here in front of his store, which at the time covered some 140,000 square feet of selling space.

A very young Dennis Novosel is seen here at the start of his career, during the time when he was operating a home delivery service for furniture and appliances.’

used furniture shop that, in turn, grew up to become Stoney Creek Furniture. To create a destination store, he had to build a following beyond Stoney Creek, a small community between the Ontario cities Hamilton and St. Catharine’s. Doing that meant spending most weekends participating in every community home show from Windsor to Ottawa. Those weekends were spent selling case goods from the now-defunct Richardson Bros, which was manufacturing in Wisconsin at the time.

In that profile Novosel said his willingness to re-invent the store when needed was the key to SCF’s long-time success. It’s something that’s now happened at least five times since the original shop opened. From selling new and used furniture, it became a 9,000 square foot store with a 12-member work force before morphing into a 30,000 square foot facility in the mid-1980s.

With the dawn of the new century, SCF made the big push to 140,000 square feet and positioned itself as probably the largest retail furniture showroom in the country. And then, the world went sideways in 2008 with the sudden onset of what’s still called the ‘great recession’ which drove down furniture store sales for the next few years. To adapt to the changing reality, SCF monetised some of its real estate assets in mid-2014 and shrunk the showroom down to about 85,000 square feet.

SCF management admitted in many ways

the bigger showroom could become confusing for the visiting customer. Re-imagining the footprint would allow them to concentrate the product line-up and heighten the consumer’s overall shopping experience.

In addition to SCF, Novosel dabbled in real estate over the years and also became one of the largest Ashley Furniture HomeStore licensees in the country via his Furniture Investment Group (F.I.G.) before also becoming a furniture manufacturer a couple of years ago with his acquisition of Artage International, a Toronto-headquartered producer of accent and occasional mixed-media furniture.

It’s not widely known, but Dennis Novosel has been an active member of the Evolution Group, an alliance of larger-format independent furniture merchants operated

by Mega Group for the past decade or so. He’s seen here with Canadian television personality and building contractor Mike Holmes at the group’s meeting in 2010.

GIVING BACK TO THE INDUSTRY

Novosel has a number of firsts to his name. He was the first Canadian to serve as president of what was then called the National Home Furnishings Association – now the Home Furnishings Association (HFA) – in 2004 after spending several years on its board and as chairman of its annual convention. He was also the first Canadian to be named as the California-based association’s Retailer of the Year, a distinction he was awarded in 2010. } HomeGoodsOnline.ca

21

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‘Santa’ Dennis has become a leading figure is Stoney Creek Furniture’s Christmas Season events. Here he’s decked out for the season at his lodge in Northern Ontario.

Laine Reynolds (left), chairman of the Canadian Home Furnishings Association, is seen here presenting the group’s Retailer of the Year Award to Dennis Novosel in August 2006.

24 HGO merchandiser

He has also been deeply involved in several other industry organisations such as the advisory panel to the High Point Market Authority and the Interior Design Society as well as a board member for the American Furniture Hall of Fame Foundation.

He was also named Canada’s Retailer of the Year in 2006 by the Ontario Furniture Manufacturers Association, now the Canadian Home Furnishings Alliance (CHFA) and for the past two years has sat as a member of the advisory board to the Canadian Furniture Show.

He was recently elected to the CHFA board of directors as the Toronto-based furniture group is seeking to expand its presence among furniture retailers in this country.

WHAT COMES NEXT?

Novosel will now serve as chairman of Stoney Creek Furniture, although he admits it’s been difficult to actually close his office there – “there’s just too much stuff to sort through.” But he’s left the company in good hands. Jim Fee, who Novosel first hired at the age of 15 back in the 1970s, has taken the reins as president. Fee became a partner in SCF in 1993.

His daughter, Cassandra, will work closely with Fee and is in all likelihood also being groomed to lead the company one day.

Although he sold his majority interest in F.I.G. to The Dufresene Group – the Winnipegbased company that operates Dufresne Furniture & Appliances, the Dufresne Retail Solutions Group and a chain of Ashley Furniture HomeStores from Ontario to Alberta

– in early 2015, he remains on its board of directors. He will also remain chairman of Artage International as its president, industry veteran Bob Klaussen will lead its day-to-day operations.

While he has resigned from his board directorships with U.S. industry groups – indeed, Jim Fee is slotted to become president of the Home Furnishings Association in the next year or two – Novosel will remain on the boards of CHFA and the Canadian Furniture Show.

After 50 years on retail’s front lines, he firmly believes there is a future for the independent merchant. While he admits that future is going to look different, it has enormous potential.

“I think there are a lot of opportunities to be had out there,” Novosel says, adding young people in 2016 might not be willing to put in the long hours – week after week and year after year – that’s needed to be a successful independent retailer. “In today’s world, it’s a crummy job – its nine to nine Monday to Friday and then nine to six Saturday and Sunday.

Many young people don’t want to do that but I’m very lucky, my daughter loves the business, so Stoney Creek is in good hands.”

He’s also not that impressed with the internet. “It’s a lousy way to conduct business,” he believes “It’s not a personal way of selling.”

His advice is simple, use it for what’s it good for but focus on building that all important one-to-one relationship with the customer. “I don’t think furniture, as we know it, is going to be something that can be sold successfully over the internet.”

With Christmas approaching, Novosel is ensconced in his lodge – located about a halfhour’s drive from North Bay, Ontario – waiting for the snow to fall so he can pursue one of his passions, exploring the wilderness from the back of his snowmobile. For when spring comes, he’s decided to going to build a lake house using the completely outfitted John Deere tractor he bought himself for his last birthday.

Then, in the spring, he’s off to Africa on safari and not just to see a part of the world he hasn’t seen enough of, there’s charity work to do.

His furniture industry shouldn’t worry too much. He’ll be at High Point for both the spring and fall trade events as someone has to cook the salmon for Stoney Creek Furniture’s famous market party. HGO MICHAEL J. KNELL is the publisher and editor

of Home Goods Online and all of its platforms.

He has observed, researched and written about Canada’s furniture and mattress industry for the past three decades.

CATALOGUE

2016

years

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CATALOGUE

2016

years

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04-05 Jaymar Celebrates 60 Years 06-07 Jaymar Chronology 08 A Word from the President 09 Jaymar Showroom 10-13 The Conception 15 George Reinitz, Jaymar Founder 16-19 Optima Collection 20-21 Jazz Collection 22-23 New swivel rocking motion chair 24-25 #mon jaymar, living room furniture 26-27 D-BOX technology 28-29 #mon jaymar, Home Theater 30-31 Upholstered beds 32-33 #monjaymar, upholstered beds 34-35 Inspiration 37 Media Publications 38 -3-

Finishing Options

Celebrates 60 years

FOR FOR IT’S IT’S 60TH 60TH ANNIVERSARY, ANNIVERSARY, JAYMAR JAYMAR WILL WILL MAKE MAKE HEADS HEADS TURN TURN WITH La 1956 1956 CHAIR. CHAIR. WITH THEIR THEIR NEW NEW La DARE DARECOLOUR COLOURIN INYOUR YOURLIVING LIVINGROOM. ROOM.

Jaymar’s Jaymar’s evolution evolution through through time time ……

We Weoften oftenrevive revivemodels modelsthat thatwere weremade madeseveral several years years ago ago and and refresh refresh them them to to today’s today’s trend. trend.

Over Over the the years, years, the the company company kept kept the the same same winning winningrecipe recipeto toensure ensureits itssuccess successJaymar Jaymarmakes makes the thedifference differencewith withits itsdesign, design,unequalled unequalledcomfort comfort and andnotoriety notorietyacquired acquiredthroughout throughoutthe theyears. years.

From From1956 1956to totoday todaysee seenext nextpage... page...

FROM 1956 TO TODAY...

u p h o l s t e r i n g

1956

First official Jaymar logo; George Reinitz launches Jaymar company in Montreal in 1956.

Jaymar furniture arrives in our living rooms. They are well designed with storage compartments and quality craftsmanship that is made to last.

1965 Jaymar is recognized for their quality and well-designed furniture. The colorful prints, skirts and piping gave a chic look to the furniture.

1970-75 In the 70’s, floral and tropical prints were in style and the decorative wood inserts gave a luxurious allure to the massive piece of furniture.

1980 The presence of multiple cushions makes their appearance. We decorate the furniture with fringes and trendy pastel colours that are the highlight of the living room.

1985 The mid-80’s, floral fabrics, fringes, Queen Ann chairs and recliners are very present. A time where we liked texture, detail and motifs; a very busy decor.

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1990 In the early 90’s, we observe a lot of rounded shapes and suede covers in bright colours. We want vibrant colours that energize the living area.

&STYLE

1995

The arrival of modern sculptural chairs to give a touch of ‘’avant-gardiste’’ in the living room. It’s the element which makes the difference in decor.

2000 In year 2000, pure whites are very popular. We see them everywhere; sectionals, love seats and upholstered beds. The furniture pieces have clean lines (simple edges, curves and angles).

2005 Recliner styles now have a modern look with adjustable headrests. Comfortable furniture with a trendy look and suitable for any home decor.

2010 The Linea collection models with adjustable headrests have a lower back line and the contrast stitching accentuates the shape. This style is favoured in open space decors.

2015 Arrival of new JAZZ collection. Jaymar takes advantage of improving the quality of their products. New memory foam for added seat comfort, full-leg recliners, choice of seat depth and width, choice of arm width, finishing touches, and more. We now find these aspects in all our new models.

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A Word from the President, Jaymar celebrates their 60 years.

Since its early beginnings, Jaymar managed to distinguish itself through time thanks to its design and exceptional quality.

I thank all our employees for their great loyalty and contribution by committing to our values based on respect, team work, integrity, autonomy and attention to detail. Jaymar has remained a leader in modern furniture manufacturing and design in Canada and it is with great pride that we celebrate our 60th year in business.

We have entirely renovated our showroom by adding wall dividers and decorative accents to create several homey living room spaces in which you can appreciate our new models designed in the latest trends and fashion. We invite you to come and try out our products while sipping a good cup of coffee in the company of our consulting experts.

They will listen to your needs and show you the different features and options that are available to you. We have recently built a new Home Theatre room for you to try and enjoy our relaxing recliner chairs. To sum it up, we have done quite a lot in the last couple of years and we will continue to surpass your expectations in the years to come.

Come and drop by our showroom!

Daniel Walker, Jaymar Furniture President

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SHOWROOM Located in Terrebonne, Quebec with an 8 000 square feet surface has been entirely renovated to the latest decor trends in 2014. We offer consumers a unique experience by trying out quality upholstered furniture in different living room settings. The showroom is opened to public and welcome customers referred by our retailers across Quebec.

PHASE 2.0 Showroom entirely renovated in 2014 and in constant evolution. Presently in Phase 2.0, we will be expanding to add a new Home Theatre section. Consumers will now be able to try out the new D-BOX technology by watching an action movie and live the D-BOX experience.

The exterior landscaping was also revamped in order to receive more customers. Parking spaces were added for visitors, a rest area for employees and the facade of the building was improved.

Did you know that...

Our consultants are there to guide customers towards finding the right furniture suitable to their needs. By asking the right questions, they can determine the customer’s needs; show them the different features and options that are available to them which will allow them to make an informed decision.

Furthermore, with more than 100 models on display, they will be able to see several different configurations and decide which is best for their living space. Not to mention our vast choice of fabrics and leathers to choose from.

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Our manufacturing process in 6 stages WOODCUTTING

ASSEMBLY

ANALYSIS & COVER CUTTING

SEWING

UPHOLSTERY

INSPECTION

MADE IN NORTH AMERICA All Jaymar furniture are designed and manufactured at the factory by craftsmen for which some have more than 30 years experience. They work day after day designing quality custom made furniture.

DID YOU KNOW THAT...

Our company offers the widest selection of fabrics and leathers on a range of upholstered furniture that are available in multiple configurations; stationary, recliners and sectionals? We allow our customers to personalize their configuration so that they can get quality furniture they’ve always dreamed of.

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From

Inspiration

to

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Design

to

Conception

to

Reality

Like in many other industries, Jaymar models are at that start; just a drawing. Creativity and innovation is becoming more and more important in the furniture industry. Style, trendy design and comfort must be considered during the creation of the model. Jaymar has their own research and development team and hires renowned designers from the industry.

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Dare to

add colour!

14

THE FOUNDER and his story.

Mr. George Reinitz, founder of Jaymar Furniture.

Native of Hungary, holocaust survivor and orphan at the age of 16, George Reinitz immigrates to Canada and starts working in the furniture industry at Montreal Upholstery. After more than 8 years of experience, he acquired an in-depth knowledge of his profession. At the age of 24, he wants to invest in the company for which he worked for and asks to buy shares; the owner refused.

NAMED IN THE HONOUR OF HIS PARENTS: JAY FOR JACOB AND MAR FOR MARTHA. HE HOPES THAT JAYMAR BECOMES HIS SECOND FAMILY.

Hence, Mr. Reinitz decides to leave his employment to start his own company; JAYMAR.

He wants, above all, to offer good working conditions for his employees who will work in a fine point technology factory. His objective was to build durable furniture of the latest trend, made in Canada. To do so, he decides to settle in the great metropolis area of Montreal.

At that time, sofa beds were a rising tendency in the upholstered furniture industry. It was thus, Jaymar’s first product produced in 1956. Gradually, the company expanded and developed new models such as rocking chairs.

A few years later, Montreal Upholstery goes bankrupt and Mr. Reinitz decides to hire his former boss who said to have sorely regretted not selling him shares of company. By allying their forces and their respective experience, it allowed the company to continue to offer great quality furniture in Canada.

Mr. Reinitz was known by his employees as having a great technical knowledge, ingenious manual dexterity and attention to detail. He preferred making new models rather than working in sales and marketing. In spite of all, he was involved in all aspects of the business from the construction of furniture to the purchasing of material and the hiring of employees.

After many years of hard work, Jaymar enjoys a surge of popularity and it’s now time to think of expanding. Mr. Reinitz decides to by a lot of land in Terrebonne to build an all new 128 000 square feet factory. The city decides to name the street in his honour "Jaymar". At that time, he was scrambling to keep his employees so he bought a bus in order to provide transportation for his workers to the new factory location on the North Shore.

This is how, under the leadership of Mr. George Reinitz, Jaymar reaches an all time high of $42 million annually with the help of his 345 employees. In 2000, after 44 years of work, Mr. Reinitz decides to take his retirement and sells the company to American Investment Company.

Jaymar then passes through the hands of Shermag in 2003, then Bermex in 2009 to be finally purchased in 2014 by Daniel Walker, the current owner.

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Wood leg LG106 Metal leg LG89

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THIS NEW COLLECTION OFFERS SEVERAL MODELS WITH ADJUSTABLE HEADREST FULL LEG RECLINER & SEATING WITH SHAPED FOAM AND MEMORY FOAM FOR UNPARALLELED COMFORT & ELEGANCE. • Complete height 33" / 40" • Seat width 23" or 30" • Seat depth : 22" or 20" • Choice of arm width • Shaped foam & memory foam • Adjustable headrest • Large flat thread in leather • Stationary or reclining with fully padded footrest

London Model, Optima collection Apartment sofa 169-170 Cover: Madras Steel

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Venice model, Optima collection Apartment sofa 169-170 Cover: Princess Sterling

Sorrento model, Optima collection Apartment sofa 169-170 Cover: Madras Cobblestone

Amsterdam model, Optima collection Apartment sofa 169-170 Cover: Madras Clay

London model, Optima collection Apartment sofa 169-170 Cover: Madras Steel

Washington model, Optima collection Apartment sofa 169-170 Cover: Sergio Leone Chocolate

One collection, an infinite choice of configurations...

009

005

169 177 174

041 051

050

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177

179

177 170

051 042

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096

055

011

055

041 042

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THE PERFECT COLLECTION FOR ALL SPACES. OFFERS COMPLETE BACK SUPPORT WITH ITS 42” HEIGHT MODELS. • Complete height 42" • Seat width: 30" or 22" • Seat depth: 21"

• Arm width: 5,5"

• Memory foam

• Adjustable headrest

• Choice of leg or without

• Stationary or full leg recliner

FROM LEFT TO WRIGHT Alto model, Loveseat 041-042 Cover: Hugo Black Chill model, Sofa 003 Cover: Pony Noir

Orchestra, model Jazz collection sectional 041-051-050-061 Cover: Pony White

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Groove model, Sofa: 041-051-042 Cover: Illusion Charcoal Trendy model, sectional 169-174 Cover: Trespass Grey with black piping

NEW SWIVEL & ROCKING MOTION CHAIR Each Optima, Jazz, Linea and Parallele Collections have their own swivel and rocking motion chair. This chair features a reclining with fully padded footrest and seating composed of memory foam for an ultimate comfort.

You also have the choice of manual or power recliner.

And, an adjustable headrest for a perfect recline while you watch your favorite movie.

Well-thought-out for best ergonomics comfort.

Adjustable headrest

Available in more than 25 different styles and offered in a vast selection of covers.

Star model, Parallele collection Cover: Princess Sterling

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Clario Model, Parallele collection Cover: Trina Blue Amsterdam Model, Optima collection Cover: Balance Beige London Model, Optima collection Cover: Madras Navy Blue

Vanda Model, Parallele collection Cover: Madras Cobblestone James Model, Linea collection Cover: Trina Tangerine

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Leonardo Model, Optima collection Cover: Illusion Black

We are SOCIAL Show us your jaymar

#monjaymar

#monjaymar Sacha Model, Parallele collection Creation of designer Sylvie Caron

#monjaymar Barcelona Model Creation of designer Marylaine Langevin

#monjaymar

Eclipse Model, Creation of designer Marylaine Langevin Havre des Légendes, Mont-Tremblant project. © havredeslegendes.com

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READY

Ventura Model DBOX, Apartment sofa Cover: Florance Black

Examples of configurations available

INSTALLED technology

Combine DBOX with regular items.

057

042

008

008

011

174

061

235

Star Model DBOX, sectional; 030-055-089 Cover: Florance White

047

Live a UNIQUE experience!

ADD D-BOX TECHNOLOGY TO YOUR JAYMAR FURNITURE. Jaymar is the only upholstered furniture manufacturer in North America to include D-BOX motion technology embedded in their seating. Pick out your style and include the D-BOX motion system.

Choose among our D-BOX Ready Home Theatre chairs or from our sectional models where you may opt for seating with or without D-BOX installed. A chic look for a stylish living room coupled with a cutting-edge motion technology that will make you feel the action of your favorite action movie.

Examples of configurations available

Indiana Model, Motion seat D-BOX Ready Cover: Illusion Charcoal

069

165

Motion Sofa Apt. 4 actuators

Fauteuil double inclinable 3 actuators

032

044

Motion Loveseat 4 actuators

WHAT IS D-BOX TECHNOLOGY? D-BOX Motion Systems and motion codes are built to transfer back true-to-life motion and vibrations from the screens to the viewer. No matter the context D-BOX Motion Systems will transfer motions and vibrations from the virtual world to the real world.

Movie audience, Home Theatres as well as simulators trainees can feel the action and become truly part of a powerful and precise motion experience.

Motion effects are artistically scripted motion and vibrations that emulate what is happening onscreen, in perfect sync. The result is a truly immersive experience.

Motion Chair 3 actuators

We are SOCIAL Show us your jaymar

#monjaymar

#monjaymar 351 Home theater Model Concept of Soundlab & Ultimation in Australia

#monjaymar 351 Home theater Model Concept of K & W Audio

#monjaymar 351 Home theater Model Concept of Soundlab & Ultimation in Australia

NEW personalized bed program to suit your needs.

+ 20 Bed Headboards Choice of bed base with

Large or Narrow contour

With legs

With front drawer

Leg choices

No Dust

With storage

With side drawers

Different Covers

Decorative Nail

A personalized upholstered bed made just for you

Leave room for your imagination...

Jaymar is introducing for their 60th anniversary, a new upholstered bed program. Choose your headboard, choose your bed base and add your final touches. You’ll find multifunctional beds with storage, with front or side drawers as well as adjustable headboard cushions which offers increased comfort.

Modena Model, King Bed with legs Cover: Chess Silver

Rachel Model, Queen bed with side drawers Cover: Stallion Black

Melanie Model, King bed with storage Cover: Bonanza Taupe

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We are SOCIAL Show us your jaymar

#monjaymar

#monjaymar Dylan Model Jaymar client concept

32

#monjaymar Alonzo Model Concept of Auberge du Lac à L’eau Claire

© lacaleauclaire.com

#monjaymar Alonzo Model Concept of Designer Marylaine Langevin © havredeslegendes.com

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Media publications THIS YEAR, JAYMAR REDOUBLED THEIR EFFORTS TO UNDERLINE THEIR 60 YEARS BY OBTAINING HIGH VISIBILITY THROUGHOUT DIFFERENT MEDIAS. IT’S WITH PRIDE THAT WE ACCEPTED THE DIFFERENT MEDIA PROJECTS DURING THE LAST YEAR. Contact us if you are interested in publishing photos of our products. We have also invested in an all new photo studio which will enable us to offer even more photos of our products in different configurations and covers.

- 37 -

MEDIAS

+ To see our media reviews (newspaper articles and catalogues); visit our web site under our Media publications page.

Finishing Touch THE FINISHING TOUCHES OF EACH UPHOLSTERED PIECE THAT WE CREATE TESTIFIES TO THE QUALITY AND FINE DETAIL FOUND IN EACH JAYMAR PRODUCT. OUR FABRICS At Jaymar, we offer a huge selection of in stock fabrics. Whether it be to cover a furniture set or do a fabric and leather combo or to decorate your new set with assorted accent pillows, you’ll find the fabric of your choice among a variety of more than 70 fabrics in different colours and textures.

OUR LEATHERS A large selection of quality leathers are offered, in order to provide you with an ultimate comfort.

A vast choice of colours, textures and grades are made available to you. Discover our selection of 90 leathers. The Rainbow collection is sure to satisfy those colourful needs with its flamboyant palette of colours.

COMBO A combo consists of combining two different covers. You may opt for a combo of two fabrics or a leather and fabric combo. Create your own original look.

507 Model, Swivel Rocking Chair Cover: Bonanza Marmor and Trina Violet

Example: Chloe style with white piping and a fabric and leather cover combo.

Contrast Thread & Piping Among selected Jaymar styles, you may also add finishing touches such as contrasting thread or piping. This will give your furniture piece a unique and personalized look.

At Jaymar, each piece of furniture is unique, like our customers !

- 39 -

years

JAYMAR.CA 75, JAYMAR STREET TERREBONNE QUEBEC J6W 1M5 CANADA

1.888.529.6271

FOLLOW-US ON SOCIAL MEDIA

ON RETAIL

OU G T N ALIVE I T T E G Succession is a critical component of any business owner’s long term plan. Retiring in comfort and leaving behind a thriving business is a worthy goal in itself. But there’s so much that can go wrong. Retail guru Donald Cooper has a few thoughts on the subject.

BY DONALD COOPER

26 HGO merchandiser

ny conversation about succession and exit planning involves the use of three terms which often cause confusion. To start out, let’s be clear about what we’re talking about here.

There are actually two kinds of succession planning. The first involves the ongoing process of developing ‘bench strength’ throughout your business and preparing your talented people for career growth and promotion. You can’t grow your business without growing your people. Every business, especially those that work closely with consumers such as furniture, mattress and major appliance retailers, needs a ‘talent pipeline’ – do you have one?

The second kind of ‘succession planning’ is preparing the business to operate without you, both eventually and catastrophically. ‘Eventually’ means when you choose to leave while and ‘catastrophically’ means if you get ‘hit by a bus’ before your time.

Most good succession plans have two key components: estate planning and an exit strategy.

Estate planning focuses on the disposition of physical and financial assets during your later life – and at death.

It’s the complex but important process of working with experienced and trusted advisors such as a business and tax lawyer, accountant, financial planner and life insurance professional. The cost of not getting this one right can be huge both financially and in family strife. The truth is, ‘you’re going to die eventually, tidy things up.”

An ‘exit strategy’ is focused on how and when the business owner will exit the business effectively and profitably. Key factors here will involve your health, your ability to lead and manage; your level of interest in the business versus other things and the financial realities of the business and your life. You may even continue to own the business, but not manage it.

Every business eventually gets sold, either to a family member, to a group of employees, or to an outsider. Unless, of course, it just quietly and unprofitably fades away and closes. This means, every business should be run with a successful transfer in mind.

In order to make your business more saleable someday, let’s look at a checklist of what a buyer is actually buying, to see what might need more attention in your business.

CALCULATING YOUR ‘SALEABILITY SCORE’

On a scale of one to ten – with ten being excellent – honestly rate your current performance in each of the 11 key factors listed below. Then, at the end, calculate your ‘saleability score’.

1.

Exceptional, growing and sustainable profitability.

Cash flow is ‘king’. Without a healthy and growing cash flow (profitability), no one will want to buy your business except maybe at a ‘fire sale’ price that you’re not going to like.

2. A relationship with loyal and profitable customers.

Profitable and loyal customers are the ‘well’ from which future profits come. Do you have a large number of profitable customers or members who prefer you, are loyal to you and go out of their way to do business with you? Do you have a database of those customers or members and do you use that database to proactively communicate, add value and nurture the relationship?

3. An industry that is growing and sustainable. Is recreational golf growing in your market, staying about the same, or in decline? Are changes in lifestyle, demographics, environmental rulings, property taxes or other government legislation affecting the sustainability of recreational golf in your market?

4. A trusted, clear and sustainable brand is generally worth big money to a buyer. It is the sum total of all the ‘good will’ you have built up over the years, one customer at a time. What are you known for and trusted for that really matters to a lot of people with money to spend? A brand is a promise to deliver a consistent set of values, standards and experiences that your target customers want in their lives. To have a clear brand you must effectively communicate a clear promise about value and values that resonates with your target customers – then you must live by and deliver that promise, every day. How do you score on this one?

5. A world-class, capable, engaged and empowered team. No one wants to buy a business that can’t survive without the owner who is about to leave. And no one wants a business full of mediocre, disengaged or toxic employees. Your team is a big part of your businesses value.

6. A culture of respect, efficiency and accountability.

Nobody wants to buy a business with a toxic, dysfunctional culture.

7. Systems, processes and technologies that help deliver an extraordinary customer experience and world-class operational efficiency. Do you have upto-date systems, processes and technology, or are you always playing ‘catch-up’ and making things up as you go along?

8. Machinery and equipment that’s current, efficient and in good condition. } HomeGoodsOnline.ca

27

Most business owners don’t know when it’s time for them to leave. They can’t imagine their life without the business. It defines their value and their life, it’s where they feel safe and in control.

9. Patents, trademarks or ‘secret recipes’ that provide premium pricing and protect the products, brands or intellectual property of the business.

10. Inventory and real estate. Inventory may or may not be a big factor in the value of your business, depending on its age and desirability. If you own the land and building in which you operate, that could be worth far more than the business itself (this is often the case for smaller furniture retailers). I generally advise clients to own the real estate in a separate real estate holding company and have your operating company pay your real estate company rent each month. Then, when it’s time to sell the business you either get rent from the new owner, sell them the real estate separately, or invite them to relocate the business and you sell the real estate to someone else – perhaps for a very different end use.

11. A clear and documented vision for your business that will allow a potential new owner to visualise and embrace the ‘possibility’ of an extraordinary future. If you don’t have a clear vision for the future of your business, purchase my Vision Critical Guide on my web site.

So, there you have the 11 things a buyer is looking for and will pay good money for. How does your business rate on ‘salability’? What needs your attention and when will you start? It takes years to get a business ready to sell or transfer, starting now is a good idea.

To calculate your ‘saleability score’ out of ten, recheck your individual scores above to make sure you were absolutely realistic. Then, total your score for the 11 points above, multiply that total by 100 and divide the answer by 110. Your ‘saleability score’ will then be ‘x’ out of 10. The closer your score is to ten, the more saleable your business is.

WHY YOUR BUSINESS MAY NOT BE ‘SALEABLE’

To figure out whether you are building a profitable and saleable business or just buying yourself a job, carefully consider these five questions: 1. Does most of the knowledge or customer value in the business revolve around you personally?

2. Are you barely making a living?

3. Are you in an industry or market that’s unattractive or confusing to most prospective buyers? Or, are you in an industry that is about to be radically disrupted or even replaced by new technology, different business models, environmental concerns or social change.

28 HGO merchandiser

4.

Are you in a type of business that others could easily start up on their own, without paying you a penny?

Have you ‘fiddled’ the books to show little or no profit in order to avoid paying taxes?

If you’ve answered ‘yes’ to any of these four questions, you’re probably in trouble when you want to sell your business.

AS A BUSINESS OWNER, HOW DO YOU KNOW WHEN IT’S TIME TO LEAVE?

The short answer is most business owners don’t know when it’s time for them to leave. They can’t imagine their life without the business. It defines their value and their life, it’s where they feel safe and in control, or they hate the thought of spending more time with their spouse. The business is their ‘neat fort’ and they don’t want to leave. From my experience as a business coach, here are five reasons to transition out of your leadership or ownership role.

1. You have all the money you need and now have other things you’d rather do.

2. It needs someone else to take it to the next level…and you’re wise enough to know that.

3. You’re tired, and just can’t do it anymore.

4. It’s losing money; sucking you dry and you don’t know how to fix it.

5. It, or some asset in it, is worth more to someone else than to you.

A REAL-LIFE EXAMPLE OF SUCCESSION PLANNING GONE WRONG

I’m currently coaching a business owner who woke up one morning and said, “I’m 67, I’m tired and I just can’t do this anymore. I want someone to write me a big cheque so I can walk out of here as soon as possible.”

He called me for help and we quickly determined that he needs at least $5 million for the business to pay capital gains tax and retire in respectable style. The problem is his business is currently worth about $300,000 – at the most.

When I told him businesses in his industry typically sell for three to five times sustainable earnings, he flipped out.

Nike stock trades at 35 times earnings, Lululemon at 26 times earnings and Under Armour at about 85 times earnings. But small to medium size private companies sell for three to five times sustainable earnings. It seems unfair, but that’s reality.

He has two adult kids in the business who think Dad is going to hand it over to them as a ‘gift’. But, there’s no way that they could run the business – except into the ground.

As a further wrinkle, his older brother owns half the shares in the company, by inheritance, but has never }

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worked a day in the business. They’ve never discussed this to determine what will be a fair split of the proceeds when the business is eventually sold. This makes no sense, but I see this kind of ‘untidiness’ all the time – and it always ends in a mess.

IMPORTANT INSIGHTS FROM THIS EXAMPLE

First, your business is almost always worth less than you think or hope it is. The exception might be when your business is sitting on what has become a hugely valuable piece of real estate that’s now worth more than the business itself.

Second, it generally takes four to six years to get a business ready to sell at a decent price, and to put all the pieces of the financial and ‘people’ puzzle in place to make that happen smoothly and profitably. A buyer won’t magically show up tomorrow just because you’d like them to.

Then, there are ‘the kids’. In my experience, they’re usually not as smart, capable or interested in the business as you think they are. Sorry! When they are interested in the business and also capable of working in it and running it someday, you don’t have a problem.

If they’re not interested and not capable, you also don’t have a problem. They’ll choose another career path. If they’re capable but not interested, you don’t have a problem.

They’ll go their own way. But, if they are interested but not capable of leading or managing the business – whether or not they work in it – you have a succession planning and exit problem. That’s reality and you’ll have to deal with it.

If you have a number of children and some of them help grow the business and some go their own way, how do you divide the assets of the business in your will?

Does everyone get the same share of the business or the proceeds of the sale as a birthright? Or do those who helped grow the business benefit from their hard work?

This is a tough one, but remember ‘fair’ isn’t always equal.

And, by the way, your kids should go to work in somebody else’s business, preferably a very well run one, for at least three years before coming to work full time in yours.

Finally, there’s the issue dealing with other family members like brothers, sisters, cousins or non-family partners working in the business. Respectful debate should always be encouraged, but somebody has to be the clear leader and final decision maker or the business will flounder. And no family member or partner should have the job they do or earn the salary they do if he or she isn’t the best candidate available for the job. It’s bad for business if this isn’t the case. Much of my business coaching work is in sorting out some of these kinds of messes.

It’s vitally important to tidy up all agreements and ‘loose ends’ with proper documentation. Discuss everything that needs to be discussed. Come to an agreement and then document it so there’s no misunderstanding or even worse, fights and lawsuits down the road.

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Selling your business to family members or employees for a promise of future payment is always risky. If the business fails, you could lose everything. Get expert advice on how to structure, finance and protect yourself in any such deal.

When selling your business to a third party buyer, never accept a two-part payment scheme where you get some of the money up front and the balance in a year or two – unless you’re happy with the first payment being the only payment.

Buyers typically offer a two part payment in order to have time to make up a reason not to make the second payment.

I see it all the time. Just say no.

PREPARE FOR THE HUGE CHANGE IN YOUR LIFE

It’s one thing to prepare your business for transition, but you also need to prepare yourself. How will you stay active, healthy, sane and engaged? Here are the two questions I ask my coaching clients who are preparing to exit their business: How can you be helpful? You’ve seen a lot, done a lot and learned a lot. Who could benefit from all of that? Who could you mentor, coach and encourage? Look around your community or around the world to see where you’re needed.

Helping others will add years of meaning to your life. This could actually be the most rewarding period of your whole life.

What have you always wanted to try, do or see? People joke about having a ‘bucket list’ but it’s actually a good idea.

Make your list. You’ll be amazed at how many things you’ve put off. Now is the time to keep promises to yourself, your spouse, your family and your community.

FINALLY

Do you have a realistic ongoing and eventual succession plan for your business and your life? Whether you’re the business owner, or a manager in the business, this matters to you. Good managers will leave – and should leave – if they think the business has an uncertain future.

I also heartily recommend these additional resources on this important subject: 1. John Warrillow’s great book Built to Sell. It’s available at builttosell.com/book.

2. Gregory St. Arnauld publishes an excellent monthly newsletter on succession and exit planning. Ask to be added to the distribution list by e-mailing him at gstarnauld@lewisreedallen.com.

3. My 34-page Vision Critical Guide is available at donaldcooper.com for a fee of $24 (plus H.S.T.) HGO A regular contributor to Home Goods Online, DONALD COOPER has been both a world-class manufacturer and an awardwinning retailer. Now a Toronto-based business speaker and coach, he helps business owners and managers rethink, refocus and re-energize their business to create compelling customer value, clarity of purpose and long-term profitability.

For more information, or to subscribe to his free, monthly management e-newsletter, go to www.donaldcooper.com

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STORES

LEON’S IS CHANGING AND GROWING For the first time in its 107-year history, Leon’s is a truly national retailer with stores from Vancouver Island to Newfoundland. But that’s not the most interesting thing that’s happened recently to Canada’s largest full-line furniture retailer.

BY MICHAEL J. KNELL

Seen here taking part in the ribbon cutting to mark the opening of the new Leon’s store in the Toronto-area suburb of Erin Mills are: Edward Leon, president and chief operating officer of Leon’s Furniture; Mike Walsh, president of the company’s Leon’s division; Harinder Takhar, Ontario Minister of Government Services and MPP for Mississauga-Erindale; and, store manager Gabriella Lio.

32 HGO merchandiser

I

N EARLY OCTOBER, LEON’S FURNITURE

Limited rolled out ten new retail locations across the country, a move that in many ways recalled the decade before it acquired its arch rival – The Brick Warehouse – in March 2013 when it was opening new stores, both corporate and franchise, at a rate of about three every two years. But the expansion effort slowed as the company concentrated its efforts on absorbing its new route to market while searching for the backroom

efficiencies that were going to be needed if their plan to return to profitability succeeded.

Of these ten new stores, two were assigned to its Brick banner – one a full-size store in Moncton, New Brunswick (which, by the way, was its first in that region of the country) while a Brick Mattress Store was opened in Bolton, Ontario.

Also added was a fourth unit to it Appliance Canada network in the Toronto suburb of Mississauga. While not the most well-known of Leon’s’ operating units, Appliance Canada is one of the leading suppliers of major appliances to builders and developers in Ontario.

Three new Leon’s banner stores were also opened in and around the Greater Toronto Area.

But the star attraction was the four stores opened Victoria and the lower mainland of British Columbia (in the Vancouver suburbs of Abbottsford, Langley and Richmond) – the first to open in Canada’s westernmost province and giving the company a presence from coast-to-coast.

“I am proud of our employees and head office staff, who have been working tirelessly to open these ten new stores on time, and on budget,” Edward Leon, president and chief operating officer of Leon’s, said in a statement published when the stores opened in mid-October.

“Our stores are active participants in the local community. Attending grand openings across

Securing eight leases to what were Sears Home stores enabled Leon’s Furniture to fulfill one of its long-held ambitions and establish a beachhead in British Columbia, making it a true coast-tocoast retailer. Seen here is the new Leon’s corporate store in the Vancouver suburb of Abbotsford.

Beds and bedding are also getting greater priorities on the floor at Leon’s as it fights off a greater width and depth of competitive forces in the Canadian market.

the country over the past three months, I was encouraged by the reception we received from each community we visited. With the opening of four highly desirable locations in Greater Vancouver…the Leon’s banner is now within reach of Canadians coast-to-coast for the first time in our 100-year history.

“Each of our banners serves a distinct customer segment and we are confident that by expanding both banners in a measurable fashion, we will continue to drive significant value creation for shareholders over time,” he added.

Eight of the new locations – four in B.C., three in the GTA and the one in Moncton – were all acquired from Sears Canada when Leon’s assumed the leases of what were Sears Home outlets. In its drive to return to profitability and cut costs, Sears has been unloading a considerable portion of its real estate holdings over the past few years. No money changed hands when Leon’s took these locations, but the Toronto-based merchant said it had budgeted approximately $4 million dollars to convert them to their floor plate and merchandising profile.

“This transaction represents a significant opportunity for Leon’s to strengthen its leading position in existing markets around the GTA as well as to enter highly desirable locations in Greater Vancouver,” Edward Leon said when the deal was announced this past February.

When it acquired The Brick in 2013, Leon’s senior executive team promised investors they would run it has a distinct and separate business from Leon’s – even though the two had been slogging out for decades as masters of high-impact promotion.

But this meant one would have to involve into something different.

And, there was on other factor to consider. Furniture, mattress and major appliance retailing in this country is changing. At the low end, Walmart is expanding its Supercenter network and IKEA has launched an aggressive campaign to double both sales and store counts over the next decade.

Last year, the publicly-held and family-managed retailer hired a consulting firm to find out what Canadians thought of Leon’s. The results were probably not surprising. Older Canadians were fond of the brand. Younger Canadians wrote them off as stodgy, brown and boring.

So, this has led Leon’s to not only update its merchandising profile – check out the Astin sofa – but also to start broadcasting television commercials that failed to mention the }

Each store opening event contained a salute to the culture of the community it served. In Richmond, Leon’s paid homage to its Chinese-Canadian community with this colourful dragon leading the festivities.

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Top left: Expanding the store count hasn’t been Leon’s only initiative of late – modernising its product profile is a key plank in its growth strategy. Seen here is an example is it new contemporary upholstery offering.

Bottom left: For the first time, Leon’s has begun to emphasise decorative accessories, believing they’re a category that will increase the number of store visits made by their customers – they won’t have to wait a decade between upholstery purchases any longer.

Right: Fully accessorised presentations are now the rule at Leon’s, such as in this view of the floor in the new Abbotsford store.

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words ‘price’ or ‘sale’. Under the leadership of Mike Walsh – the first non-family member to serve as president of the Leon’s banner – they launched a whole new social media campaign and blog while setting about making itself a retailer that appeals to the consumer’s lifestyle aspirations.

Leon’s is also targeting a customer – a busy 35-year-old woman who cares about her home and likes to share photos of her imperfectly real living space on Instagram, Pinterest and Twitter. She also likes the good life and is the decision-maker when it comes to buying furniture, mattresses and appliances for her home.

The floor at Leon’s has also changed from what it was just five years ago. Today, midcentury, modern, industrial chic and rustic revival are the styles driving the merchandise assortment. It has also beefed up its contemporary offerings and expanded its assortment for small-space living. And for the first time, outdoor furniture made an appearance in a number of Leon’s stores this past summer.

And the merchandising modernisation didn’t stop with furniture as items such as stainless steel gas ranges, curved 4K televisions and gel-infused mattresses also get prominence on the floor.

In another move, Leon’s went all in on accessories, bringing in a smorgasbord of area rugs, lamps, cushions, wall art and other decorative items as part of its drive to bolster foot traffic and sales.

Indeed, in an interview earlier this year with Marketing Magazine, Mike Walsh candidly pointed out that consumers don’t visit furniture all that frequently as a mattress or upholstery suite can last as long as ten years, with a dining room lasting 15 or more.

“There’s no expiry date on furniture, so people don’t necessarily need to come in the store as often,” he told them.

So, if Leon’s wants to remain Canada’s largest full-line furniture retailer – which the evident suggests they should be for the foreseeable future – they have to modernise their assortment, appeal to young people setting out on the journey to adulthood while being able to talk to them the way they want to be spoken to.

To support the effort in B.C., Leon’s acquired 75,000 square feet of warehouse space from a third party while noting that it expects to complete the construction of a state-of-theart 434,000 square foot distribution – to support both Leon’s and The Brick stores in the province – before the end of August 2017. HGO

IDEAS Designers can be hired to hold design sessions and curate your furniture groupings for customers.

(THIS ROOM IS CENTRED ON THE BONIKOWSKY GROUP FROM JANE BY JANE LOCKHART.)

DESIGNERS:

retail’s secret weapon F OR THOSE OF US WHO RETAIL HOME

Finding new business is everyone’s top priority.

This well-known television personality, author and furniture maker believes

BY JANE there’s one resource many LOCKHART independent retailers many have overlooked – the local interior design community. Here she offers a few suggestions about why and how retailers should build bridges to reach them.

firnishings there’s no question it’s a tough business. With the increasing cost of land, labour and utilities the task is to stay competitive while turning a profit. The increasing viability of the internet as a way to reach consumers makes the challenge for brick and mortar stores an even greater.

There are a lot of changes – local, national and international – that will affect how business is conducted in the coming years. Understanding these changes and how they will impact retail is important as every local business is ultimately connected to the international marketplace. Canadian retailers need to search everywhere for creative solutions that will make them more competitive.

One solution is recognising the asset interior designers can become in broadening a retailer’s reach while enhancing customer value and brand differentiation. For many retailers this is not a partnership they have traditionally sought out.

Many saw designers as competitors rather than as partners. But as the market shifts, so too must } HomeGoodsOnline.ca

35

Design is a client-based business and practitioners soon discover no budget is so unlimited that prices don’t have to be reviewed or questioned.

Designers are on the frontlines of the trends. They know what your customers are looking for.

(THE GROUP FEATURED HERE IS COPPERHEAD FROM JANE BY JANE LOCKHART.)

36 HGO merchandiser

attitudes. Retailers and designers need to work together to embrace new, creative ways to address both the changing marketplace and evolving consumer spending habits.

It’s important to look at these changes are and where they came from. Although a retailer may be successful locally, the sheer workload of running a store – marketing, advertising, managing the business – leaves little time to explore the meaning of statistics provided by sources such as the federal government, universities, think tanks or researchers.

Understanding this information can help a retailer implement new market strategies or test new ideas.

Understanding this picture can frame the future marketing your business. For instance, looking at current population trends can help the store owner learn more about the consumer.

In 2017, Canada is still expected to have a negative birthrate. This means population growth depends on immigration. Canadians produce fewer children than required to support the current economy. European countries such as Germany and Britain share this issue. Both are dependent on immigration to fuel growth.

In fact, there soon will be more people over the age of 65 living in Canada than under 65.

How does this translate into retail sales of furniture and home furnishings? The baby boomer generation (who are now young seniors) is most likely to spend both on themselves and younger family members. They are also likely to update their furnishings and residences often because they don’t want to feel “old”. This suggests their wealth will not only be inherited at a later date, at least some of it may be spent now.

Downsizing was once the favoured buzz word for this group but it has since been changed to “rightsizing”. Surprisingly, some boomers move

to larger residences as their dream home has lots of space for younger generations to visit.

At the opposite side of the spectrum are the millennials. Born between 1980 and 2000, this new and dominant generation is just finishing school, entering the work force and searching for their first home. It is estimated to be as big as the baby boom generation – if not bigger – which bodes well for growth in the “home” market.

Millennials are also the most educated generation in history, and regardless of where they live, share traits such as a love of technology, a desire for public transit and environmentally sustainable products as well as a need to do things differently. This generation wants to change the world.

What does their emergence mean to the retailer? Traditional methods of reaching consumers are unlikely to make a lasting impression on them as they have already experienced more than their parents did in areas from travel to design. Connecting with this new generation of shoppers depends on embracing unique ideas, unexplored avenues and a new diverse set of partners.

This is perhaps where designers fit into the new retail world. In the past, designers were perceived to be elitist and were often not seen as hardworking, detail oriented and loyal.

But thanks to the growth of home and garden television programming on specialty channels such as HGTV as well as the emergence of web sites such as Houzz and Pinterest, design and designers have become part of the mainstream.

Today, they work with all sorts of consumers, not just those with unlimited budgets. In fact, the entire design profession has had to re-invent itself to compete in a changing marketplace.

These days, interior design is taught at a community colleges and universities, usually in a four-year curriculum. Graduates must then practice for another three or four years before they can apply to write a series of examinations to be recognised as registered interior designers.

Design is a client-based business and practitioners soon discover no budget is so unlimited that prices don’t have to be reviewed or questioned. Often designers are hired not just to complete one room but all principle spaces in a home. A successful design business requires tremendous detail co-ordination, great contacts, superior management skills, promotional abilities and a great sense of style. No longer are residential designers singularly focused on one skill set. They are multi-disciplinary professionals who understand all the channels needed to maintain a profitable business.

The days of designers waving their hands about in a flurry of pretention, pointing at items here and there are long gone. Nowadays, they possess an educated understanding of everything from construction basics to forecasting market trends in style, form and colour. As ‘early adopters’ – people who intuitively understand what’s next and know how to incorporate new trends into their life or business – designers were quick to adopt social media as a form of communication as well as a method to promote their business practices and style choices. A designer firm’s web site is often “content rich” as they are often a great source of information because of their ability to absorb and understand trends.

There are many ways retailers can benefit from partnering with designers. First, they can act as outside sales representatives. Designers are often working on numerous projects at the same – often at various stages of completion.

Second, design firms often employ a team of professionals, all able to sell a retailer to multiple customers. Third, designers drive project completion, as their pay-off is in a finished space. Retailers can likely expect that if a client has hired a designer, they are a motivated buyer when they walk through the door.

What is a designer looking for when he or she comes into a retail establishment? Product!

The best way a retailer can help a designer is to display more product. Make the store a onestop resource for busy designers and their clients. Consumers alone may not need a lot of choice but designers do. Have multiple fabric

samples and finishes for review. If items aren’t on the floor be sure to offer catalogues or easy access to online samples.

Store owners need to teach their sales associates that designers shopping with their clients are, generally, an easy sale. Designers are not a threat and don’t take clients away as most wouldn’t be there if the designer hadn’t recommended the visit. Ensure they assist and support the designer so everyone gets the sale.

In the end that’s what everyone wants.

Where possible, create designer discount programs that are protected from the public.

Protect this discount, as hard as it may be, and don’t give it to customers shopping without a designer. Designers are loyal and will continue to support a store that recognises their importance by preserving this discount for them. The choice to pass it on should be the designer’s, not the retailer’s.

Establish specific staff relationships with each designer so trust can be built between the designer and the sales associate. Once the associate knows the designer is competent and helpful, retailers will be better positioned to support the sale – and vice versa.

Also: make returns easy. Make cashing out fast. Make pick-ups easy.

There are many ways to partner with designers to increase your store’s brand awareness and speak to the online community. The market place is changing. The population is more international, younger, diverse and technologically savvy.

Consumers research online before they purchase and seek clear, simple answers. }

Boomers aren’t just down-sizing, they’re rightsizing. This can mean purchasing larger homes with new furnishings for when the grandchildren come to stay.

(PEYTON FROM JANE BY JANE LOCKHART WAS CREATED TO THIS ROLE IN THE HOME.)

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Create a shopping environment that attracts designers who will bring the customers to you.

(PICKETT’S FROM JANE BY JANE LOCKHART IS FEATURED HERE.)

If a designer brings a customer through your doors, they are already motivated to purchase.

(ROYAL TROON FROM JANE BY JANE LOCKHART CREATES SUCH AN IMPACT IN THIS ROOM SETTING.)

How does a retailer deliver all of this? As the home décor cycle of purchase is a long one, how does a retailer stay top of mind? And, how do local retailers compete against growing chain and online stores who have huge marketing and promotional budgets?

Creating a business and shopping environment that attracts designers can have long-lasting rewards. Here are a few ways to integrate designers into your business.

Hire a designer to write timely blogs for your web site about design and style. Consumers are searching for content and not just product. By being a content provider, a retailer can slowly move their brand out of the transactional category and into expert territory. Knowing this, consumers with deeper knowledge and bigger budgets will seek you out. Again, designers are content-rich partners who regularly see emerging styles and have multiple experiences to share.

Create in-store events and hire local designers to offer free advice or show

consumers newly arrived product. Creating an event is noteworthy as it keeps your name in the consumer’s mind in a different way than advertising. Event marketing avoids the clutter ads often create and makes a retailer stand out as a trendsetter. Social media can also assist in your marketing efforts when customers often use it to let others know they are at your event – this creates “buzz”.

For a small monthly retainer, many designers will create regular design content for social media platforms, aimed to distinguish your retail voice from your competitor’s. By talking about your product as an authoritative third party, a designer adds credibility to your store.

Their ability to provide insightful content may create more interest in unusual places.

For example, think about ottomans. How do you make them interesting? A good designer knows how – this is right up her alley!

Even though the store has terrific products on the floor, often consumers don’t know how to put them together. Hire a design professional to curate exclusive looks using what you have available. Photograph the results, post them to your web site and other promotional material as a way to connect with consumers. Show them how to use what you are selling. Better yet, hire a few fearless designers and film them pulling a room together with your items and post this on all social media platforms.

Working with designers is a smart retail decision. Designers can bring in new, younger buyers as well as those “young” seniors you might not have been able to reach previously.

By using experts, a furniture, mattress and major appliance retailer can develop a credible brand because third party endorsements (whether explicit or implied) moves him from mere product seller to trusted supplier of not just goods, but ideas, creativity and content.

This allows retailers to set and influence trends – which is where we all want to be when it comes to business.

Seek out your local community of designers.

Retailers can find them by contacting organisations such as the Interior Designers of Canada (findinteriordesigner.org) or its provincial associates (idcanada.org). HGO JANE LOCKHART is the principle of Jane

Lockhart Interior Design, a Toronto-based firm specialising in interior design and renovation for retail, hospitality, home building and residential clients. She is also the creator of the Jane by Jane Lockhart line of upholstery and accent furniture. She also hosted the television series, Colour Confidential.

38 HGO merchandiser

APPLIANCES

REIMAGING

APPLIANCES The ‘store-within-the-store’ concept has been around for a while now. BrandSource has injected new life into this old idea with a scheme designed to enhance sales and margins for those members wanting to revitalise their appliance business while also girding them to handle new competitive forces. BY MICHAEL J. KNELL

Gerard Stubbe (left), general manager and his father, Issac Stubbe (second from left), founder and president of Stubbe’s BrandSource Home Furnishings in Tillsonburg, Ontario, are seen here cutting the ribbon to mark the opening of their new appliance ‘storewithin-the-store’.

F

OR THE MAJORITY OF FURNITURE STORE OWNERS, MAJOR APPLIANCES

remain a vital part of the sales mix. It doesn’t matter whether the store is an independent or part of a national chain; Canadian consumers invariably expect their local furniture store to carry major appliances. It’s always been that way and probably will remain so for foreseeable future.

The latest data from Statistics Canada indicates major appliances account for about 14% of the typical furniture store’s annual sales. Furniture stores, meanwhile, account for about 32% of all major appliance sales – defined by the five core categories of refrigerators, ranges, dishwashers, washing machines and dryers.

Like mattresses, which account for roughly the same share of the overall sales mix, the importance of major appliances cannot be understated for the typical independent Canadian home goods retailer. } HomeGoodsOnline.ca

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Laundry was given heightened prominence in Stubbe’s new appliance centre, receiving twice the floor space it had before the project

In recent years, white goods have been both blessed and cursed. Improvements in technology and energy efficiency have made them highly sought after by the consumer while deflation has put real pressure on both prices and gross margins for retailers showcasing them on their floors.

Traditionally, there have only been three major segments vying for the consumer’s major appliance dollar. Competing with furniture stores were electronics stores and department stores. But over the past decade, a new competitor has emerged: the home improvement store.

“We’ll soon have in Canada when the U.S. has had for over a decade – two very large home improvement retailers battling in the marketplace that have changed the landscape significantly,” says Randy Molnar, general manager of appliances for Mega Group and its primary go-to-market vehicle, BrandSource Canada.

Most industry insiders acknowledge that Home Depot Canada and its arch rival – Lowe’s Canada (which recently acquired Rona and is in the process of adding white goods to its product line-up) – are the category’s two emerging superpowers.

The other major shift the market has been in the seasonality of sales. These days, 40% of annual revenues are generated in the last 30% of the year – thanks to the growing emphasis on Black Friday and Boxing Week as promotional vehicles.

These changes prompted Molnar and the senior management group at BrandSource Canada (BSC) to create a new ‘store-within-the-store’ concept specifically for major appliances. The pilot for the new initiative was unveiled recently at Stubbe’s BrandSource Home Furnishings in Tillsonburg, Ontario.

40 HGO merchandiser

Covering 3,050 square feet – almost twice the size of Stubbe’s previous appliance display – Molnar says the goal was to improve the customer’s overall shopping experience while demonstrating the family owned and operated retailer’s expertise with the most advance technologies available today. In fact, it’s designed to aid the customer suffering from information overload.

“Consumers have all this information available to them,” he points out. “Unfortunately, information overload can be confusing and so price becomes their main focus. A good sales associate knows how to simplify the selection process based on her needs and effectively qualify her into the right product – which adds value to the relationship.”

The goal of the newly designed appliance centre – which, if all goes well, will be rolled out to as many as three more BSC stores in 2017 – is to position Stubbe’s as the local community’s appliance expert. “For the consumer, the appliance purchase process can be daunting, so we’ve developed an experience that helps the consumer choose the right product on her ‘path to purchase’,” Molnar says, adding Stubbe store associates receive not only product knowledge from the store’s vendor partners but sales training from the BrandSource University.

During the selling process, Stubbe’s extensively-trained sales consultants qualify the consumers’ needs, narrow the options and ultimately help consumers make the best buying decision tailored to their needs and budget.

One of Stubbe’s key features is most of the appliances on the floor are fully functional in order to illustrate how new innovations create energy efficiency – saving the consumer time and money. “After all, adding the sense of smell to environment is a pleasing element to any promotional event,” Molnar says, adding the store now has the ability to hold cooking events or just bake cookies during a sales event to spice things up.

The concept

The BSC appliance centre is the next generation of the ‘store-within-the-store’ concept. “The retail space and merchandising elements were designed to assist both sales associates and customers along the path to purchase,” Molnar says. “The integration of all these elements is what builds expertise so a potential customer won’t need to go anywhere else for their appliance solution.”

But the real difference between this concept and the ones that came before it can be found in what happens after the grand opening. “In the past, a retailer might have experienced initial growth from a renovation only to see results taper off over time,” Molnar says. “We are working beyond the renovation to incorporate a more formalised operational performance process.” This will give both Stubbe’s management team and the BSC team the ability to evaluate and address issues as they appear.

Before embarking on this project, BSC discovered there was a success gap between appliance-only specialists and full-line or multi-category furniture stores. “That’s when we went looking for the right kind of multi-category retailer who was committed to improving their results and open to working in support of an emerging program,” Molnar said.

Stubbe’s is a long-time shareholder-member of Mega Group and was one of the first to sign on when it unveiled the BrandSource Canada banner. Its founder and president, Issac Stubbe, served on the co-op’s board of directors for a number of years and his son and company general manager, Gerard Stubbe, remains active in the organisation. Once begun, they were also active participants in the development of the concept whose ultimate purpose, Mol-

nar notes, is to “help retailers achieve improved customer satisfaction and deliver targeted market share and profitability goals.”

“I can attest the Stubbe’s team standards were very high,” Molnar says, “and that pushed us harder than we imagined and brought out the best that collaborative thinking can realise.”

He also noted Stubbe’s appliance business before the project was performing well when compared to other fullline furniture retailers. “They saw an opportunity to expand their business and add more value to their community through this program,” Molnar says. “They wanted appliances to be more than a convenience category and were prepared to be the best they could be and believes maximising this opportunity would help their overall business.”

“The goal of the BrandSource store-within-the-store concept is to show consumers they are dealing with experts in the appliance category,” Gerard Stubbe says, adding the department is now located centrally in the store and is marked by strong visual elements.

The gallery features a ‘who’s who’ of the resources from across the white goods industry including Whirlpool – as well as its Maytag and KitchenAid brands – GE, Samsung, Fisher & Paykel, Miele and Danby.

“The department is divided into three clear categories: cooking, refrigeration and laundry,” Stubbe explains, “which are supported by strong accent colours and lifestyle wall graphics. It is designed to demonstrate the latest in appliance technology with innovation pods at the front of the department, strategically located small vignettes to display appliances in ‘real life’ settings, plus a large touchscreen kiosk for additional product information available to both customers and staff.”

The space allotted each category was also re-thought and re-balanced to reflect what’s happening the market.

For example, laundry accounts for about 40% of all appliance shipments (in terms of units) The appliance centre is divided and remains the lead item in most into three clear categories, each retailers’ promotional campaigns. sporting an ‘innovation’ station such During the refit, the space Stubbe’s as the one for laundry, seen here. allotted to appliances was doubled } HomeGoodsOnline.ca

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The appliance centre is divided into three clear categories, each sporting an ‘innovation’ station such as the one for laundry, seen here.

with the largest increase awarded to laundry. “The combination of more floor space, a demonstrable working laundry pair, a laundry innovation section, a broader mix of technologies, laundry presented in pairs with pedestals and the right balance of leading laundry suppliers will be a winning combination,” Molnar says.

The same approach was taken with all the other categories as well.

The changing marketplace

ADVERTISERS’ INDEX

At the end of the day, Molnar believes the BSC appliance centre concept should make it easier for the member store owner to connect with the consumer. “We want to simplify the experience and create consistency between what consumPages 2-3 Phoenix AMD International 41 Butler Court Bowmanville, ON L1C 4P8 T: 800.661.7313 F: 905.427.2166 phoenixamd.com Page 5 Stearns & Foster Tempur Sealy Canada 145 Milner Avenue Scarborough, ON M1S 3R1 T: 800.268.4414 stearnsandfoster.ca Page 7 Canadian Furniture Show 101-1111 Saint-Urbain Montreal QC H2Z 1Y6 T: 514.866.3631 F: 514.871.9900 canadianfurnitureshow.com

42 HGO merchandiser

ers experience in the world of digital research and what they see in a retail environment,” he says. “The merchandising elements in this project were built to respond to that connection and the learnings from its implementation will improve the consumer’s purchase process and will continue to evolve as we move forward.”

One other vital goal of the ‘store-within-the-store’ concept is to create real competitive differences between an independent such as Stubbe’s and those driven primarily by price and promotions. Positioning Stubbe’s as appliance experts should aid in the protection of margins, at the very least.

“The shift to digital is rapid, evolving, and an independent dealer isn’t likely to have the time or expertise to understand all of its complexities,” Molnar says. “At BrandSource, we’re very focussed on bringing that expertise to our dealers so they can focus on running their business.”

He also admits it’s going to take at least a year to determine how successful the concept will be, which requires a budget of anywhere between $25 and $50 per square foot, depending on just how much renovation is required. “But, the objective is to deliver an ROI (return on investment) within 24 months of launch for all stakeholders,” he says.

It should be noted that over the three-day grand opening weekend held in mid-November, Stubbe’s hosted more than 380 customers in its new appliance centre, a number that immensely pleased those involved with the project HGO

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Las Vegas, NV 89106 T: 702.599.9621 F: 702.599.9622 lasvegasmarket.com Page 19 Zucora 552 Clarke Road London, ON N5V 3K5 T: 800.388.2640 zucora.com

Pages 22-23 Serta Canada 40 Graniteridge Road, Unit #2 Concord, ON L4K 5M8 T: 800.663.8540 sertacanada.com

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Page 25 Malaysian International Furniture Fair Putra World Trade Centre Kuala Lampur, Malaysia miff.com

Pages 44-45 Mega Group 720-1st Avenue North Saskatoon, SK S7K 6R9 T: 306.242.7366 F: 306.242.5651 megagroup.ca

Page 29 Protect-A-Bed 1500 S. Wolf Road Wheeling, IL 60090 T: 519.822.4022 protectabed.com

Page 46 Home Goods Online P.O. Box 3023 Brighton, ON K0K 1H0 T: 613.475.4704 F: 613.475.0826 homegoodsonline.ca

INDUSTRY CALENDAR

March 8 to 9, 2017 ISPA INDUSTRY CONFERENCE International Sleep Products Assn.

Vinoy Renaissance Resort & Golf Club St. Petersburg, Florida sleepproducts.org/ IndustryConference March 19 to 22, 2017 PRIMETIME Cantrex Nationwide New Orleans Convention Center New Orleans, Louisiana nationwideprimetime.com

January 5 to 8, 2017 CES (CONSUMER ELECTRONICS SHOW) Consumer Technology Assn Las Vegas Convention Center Las Vegas, Nevada www.ces.tech

January 17 to 20, 2017 THE INTERNATIONAL SURFACE EVENT Mandalay Bay Convention Center Las Vegas tisewest.com

January 5 to 8, 2017 TUPELO FURNITURE MARKET Tupelo, Mississippi tupelofurnituremarket.com

January 19 to 22, 2017 INTERIOR DESIGN SHOW Metro Toronto Convention Centre North Toronto interiordesignshow.com

January 16 to 22, 2017 IMM COLOGNE THE INTERNATIONAL INTERIORS SHOW Koelnmesse GmbH Cologne, Germany imm-cologne.com

January 22 to 26, 2017 LAS VEGAS MARKET World Market Center Las Vegas, Nevada lasvegasmarket.com

January 28 to 31, 2017 TORONTO WINTER FURNITURE SHOW Canadian Home Furnishings Alliance Various showrooms Toronto chfaweb.ca January 29 to February 2, 2017 TORONTO GIFT FAIR Canadian Gift & Tableware Assn.

International Centre Toronto Congress Centre Mississauga, Ontario cangift.org/toronto-gift-fair February 26 to March 1, 2017 ALBERTA GIFT FAIR Canadian Gift & Tableware Assn.

Edmonton Expo Centre Edmonton cangift.org/alberta-gift-fair

March 8 to 11, 2017 MALAYSIAN INTERNATIONAL FURNITURE FAIR Putra World Trade Centre Kuala Lumpur, Malaysia miff.com.my March 26 to 29, 2017 QUEBEC GIFT SHOW Canadian Gift & Tableware Assn.

Place Bonaventure Montreal cangift.org/quebec-gift-fair April 16 to 26, 2017 HIGH POINT MARKET High Point, North Carolina highpointmarket.org May 26 to 28, 2017 CANADIAN FURNITURE SHOW Quebec Furniture Manufacturers Assn.

International Centre Toronto canadianfurnitureshow.com HomeGoodsOnline.ca

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FURNITURE • BEDDING • APPLIANCES • CONSUMER ELECTRONICS • ACCESSORIES 46 HGO merchandiserLAMPS & LIGHTING • FLOOR COVERING • RETAIL SERVICES