Leon's Furniture will keep opening stores despite sluggish economy
November 14, 2011,
Cutting the ribbon to formally open the new Leon’s Furniture in the Toronto suburb of Mississauga are the store’s general manager, Hakim Khan, left, Mississauga City Councillor Jim Tovey and Terry Leon, president and CEO of the retailer.
Leon's, which has stores in every Canadian province save British Columbia, is pursuing an aggressive investment strategy in the company's future.
The wave of grand openings started in August when the publicly held and family-managed furniture and appliance merchant opened a 76,000-square-foot showroom and warehouse (or "superstore" in the company's parlance) in Guelph, Ontario.
Since then it has added a second corporate store of 42,000 square feet in the Toronto suburb of Mississauga. Earlier this month, it opened an 84,000-square-foot corporate store in Regina, Saskatchewan, and its fifth Montreal-area location, a 47,000-square-foot unit in Rosemerè, Quebec.
Leon's also opened new franchise stores this month in Bathhurst, New Brunswick, and Drummondville, Quebec - its first franchise in Quebec.
The company now operates 41 corporate stores alongside a franchise network with 32 locations.
"This is the first year of our aggressive expansion campaign that will see several new Leon's superstores opening across Canada, every year for the next five years," Leon's President and CEO Terry Leon said in a statement. "We're very happy to be entering these new markets and are very grateful to our associates for all their hard work during this exciting time."
In addition to the new stores, Leon's is also renovating two of its corporate stores as well as four franchise locations in Trenton, Kemptville and Simcoe, Ontario, and St. John, New Brunswick.
The company is financing the campaign internally and it remains debt-free.
"We're in a very strong financial position," Leon said, adding that tough economic times often produce significant savings for companies looking to expand. "Just as our customers are looking for value when they're in our stores, we like to get the best value when we expand."
Leon's is looking to add three to five stores, both corporate and franchise, per year over the next five years. This will put the retailer in a strong position when the economy fully recovers and consumers are once again spending on furniture, appliances and mattresses, officials said.
Leon said the additional stores will add some 200 jobs to the company's payroll, taking it up to about 3,500. By the time the current expansion concludes, Leon's anticipates adding about 1,000 new jobs.
Terry Leon said he believes Canadian companies have an obligation - if they're able - to add jobs as it's the best way to drive growth in the economy.
"This is the time for corporations to re-invest in our country," he said. "We are reinvesting, not expecting an immediate return - but we know that return is coming. We are building for the future.
"It is because of our confidence in the future prosperity of these markets that we're able to justify this new multi-million dollar investment," he added.
Leon's redesigned appliance departments - featuring full kitchen displays - showcase product from manufacturers including Samsung, Whirlpool, Frigidaire, KitchenAid and LG. Customers can see the latest technology, such as four door refrigerators, dual stoves and front load laundry with brand new "steam technology."
The electronics display features the latest in flat screen TVs from Samsung, Panasonic, LG, Sharp and Toshiba. In addition to plasma, LCD and LED televisions, Leon's new showrooms feature 3D and Smart TV interactive displays and home theater settings.
Terry Leon said the company recognizes there won't be a lot of new business in the coming months, so the battle will be for market share. Adding stores and improving the product assortment are two ways to capture share, he said.
Looking at the economy, Leon sees cause for concern and isn't predicting any significant growth until the last quarter of 2013. The immediate challenge is to see the debt crisis in Europe solved and once that happens, confidence should return to the market, he said. "We can then see North America coming out (of the downturn) first," Leon said.
Leon's is the second largest full-line furniture retailer in Canada with 2010 sales of C$896 million and net income of C$63 million. Founded in 1909, it is Canadian owned and boasts some of the best productivity statistics in the country.