Mega banners realign
New look, new muscle for independents
By Michael J. Knell -- Furniture Today, October 3, 2005
Saskatoon, Saskatchewan — Countrywide and Multi Meubles have completed a transition from a loose confederation of banner stores into a disciplined retail system ready to take on the big boys of Canadian furniture retailing.
Their approach may in time prove to be the key to survival for independent retailers of furniture, bedding, appliances and electronics, who were once dominant but now are battling new channels of distribution.
Operated by Mega Group, Canada's largest furniture buying and marketing group, Countrywide does business in English Canada while Multi Meubles focuses on Quebec and the Frenchspeaking regions of northern New Brunswick.
"For a long time, Countrywide and Multi Meubles were run off the corner of someone's desk," said President and CEO Michael Graydon. "Today, Countrywide (including Multi Meubles) is a profit-generating entity within Mega Group and is entirely self-funded. We've put a lot of time and energy into it and now it works."
As part of the transition, Mega moved its retail systems activity to its office in Boucherville, Quebec, under Vice President Benoit Simard. Mega concentrated its merchandising and logistics operations in Mississauga, Ontario, while finance, member services and administration remained at the cooperatively owned and operated group's headquarters here.
In addition to stores under the Countrywide and Multi Meubles banners, Mega has between 400 and 450 affiliated members, many of which are appliance stores.
At its annual conference earlier this year, Mega members saw the new store design for the two banners at Multi Meubles L. Blouin, a 27,000-square-foot store in Beauport, Quebec, just outside Quebec City.
"If you walked into this store here or another in Medicine Hat (Alberta) or Kamloops (British Columbia) you would see the same thing," said Michael Vancura, business development manager for the franchise networks. "We want to position these stores in the medium to medium-high price points and are taking a merchandising approach that balances style with price."
Latching onto a movement that has become the industry standard in Canada, the new Countrywide/Multi Meubles retail box has a series of room settings created to look appealing to consumers while demonstrating the owner/operator's expertise and service as a full-line furniture store.
While the furniture presentations look good, the real sales standouts at Multi Meubles L. Blouin are appliances, bedding and accessories. "Accessories represent a remarkable percentage of sales for some of our members — sometimes as high as 20%," Vancura said.
Fifteen of the 21 existing Multi Meubles stores and a majority of the 45 Countrywide stores have converted to the new box.
"They have to renovate to the same standard and the reward will be a much higher level of profitability," Vancura said, adding that Blouin's performance "is proof that the concept works."
It's still too early, however, to tell how the latest changes will affect Mega's sales and profitability as a group, officials said.
Supporting the new box at Countrywide/Multi Meubles are a variety of services and product initiatives.
"We're actually sending teams to merchandise the stores at least twice a year," Vancura said. "We're also merchandising whole container programs."
Wherever possible, Mega is using the same resources in every category to create what Vancura describes as "tactical merchandising opportunities" that could benefit all Mega members, not just Countrywide and Multi Meubles partners. For example, El Ran is the main motion upholstery supplier, while Ashley, Sealy, Dutailier, Valco and Springwall are key vendors.
Both banners are using Shepherd Selling System training programs — indeed, several stores also participate in Shepherd performance groups. Countrywide uses ProfitSystems for its IT requirements, although it's not available in French, so Multi Meubles uses a system called Cameléon. "Using these systems has had a significant impact on the operations of our stores," Graydon said.
He said Mega's strategy is simple: sharp merchandising and pricing combined with an emphasis on operational excellence equals profitability for independent retailers.
However, it has taken several years to transform Countrywide and Multi Meubles from traditional buying group banners into a modern retail system.
The estimated cost to build the new box ranges from C$200 to C$250 per square foot, with an average store size of about 25,000 square feet. Vancura said the group anticipates the typical Countrywide/Multi Meubles should generate sales between C$6 million and C$7 million annually.
The model calls for the store to become the dominant furniture retailer in whatever market it's located.
Mega will add two Multi Meubles stores to the network in 2005 and believes French Canada can probably support about 30 stores in total. The group will also open three Countrywide stores this year, with two to three more expected in 2006, which would boost the total to about 50. The goal is to eventually have 70 to 75 stores across the country.
"Our big push for now will be to get our store sales into the C$8 million to C$10 million range," Vancura said. "Then future stores will be located in communities where we see opportunity."
