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Gallery buys fame with Super Bowl sales promotion

HOUSTON - As Jim McIngvale was preparing for the second of two "refund parties," to return some $7 million to 1,000 customers thanks to his Super Bowl gamble, he had a couple of things to share.
     "Put in there Gallery Furniture is now the most famous furniture store in the world," said McIngvale.
     Some have questioned Mattress Mack's gamble: a promotion promising full refunds to customers who purchased $6,000 or more in furniture from the Houston store if the Seattle Seahawks won the Super Bowl. But Gallery co-owner McIngvale hasn't looked back since the Seahawks' win.
     "It was booming Sunday (refund party day) and Saturday, too," he said. "A lot of people told me they came out to help me get my money back. Hundreds told me that."
     And did he get the money back in new sales? McIngvale wouldn't say, but said he had a "huge" post Super Bowl weekend, with sales about 20% ahead of normal.
   Some industry sources commenting on a previous Furniture/Today story about the promotion supported McIngvale, but one wondered if he couldn't have gone a different route to cut his loss.
     "I would have offered to refund 50% of the customers' purchase, not 100%," said Bruce Goodman, president of bedding producer White Dove Mattress in Cleveland. "That way, Gallery would have essentially broken even on their costs. Customers still would have been elated at their savings, and I believe Gallery would have gotten just as much media attention and buzz for giving $3.5 million in refunds to its customers."
     A retailer who asked not to be identified wondered about Gallery's margins and whether McIngvale could afford to give away that kind of cash.

Gallery Furniture chief Jim McIngvale, in back, stands on a counter near the store entrance to make an announcement to the crowd at the Feb. 9 refund party.
Jim McIngvale
Seattle SeahawksSeattle Seahawks tight end Luke Wilson joins Jim McIngvale, Gallery Furniture, Houston, during the Feb. 9 refund party. Wilson has ties to Houston from his Rice University days.

     "But he got some publicity, paid for by everybody who has shopped there in the past," the retailer said. "In the end, good for him."
     McIngvale said the ad agency he works estimated the value of the free advertising at $32 million.
     "The number of people the promotion reached is 1.7 billion, and the word-of-mouth value is $100 million," he said.
      Asked if the national and global publicity has much of an impact on local business, McIngvale suggested it has some impact, noting that several people have called - from Canada, London and Nigeria, for instance - to say they're "moving to Houston to come and see us."
     He added that some industry factoring companies have been inquiring about the company's financial health since the promotion.
     "My answer was this: We are not going out of business, we're going out for business," he said. "Business has never been better, and we now have 1,000 stark raving Gallery Furniture fans throughout the community spreading our good will."
     He said the short-term hit to profit and sales is not life threatening.
"What was life threatening was the $30 million fire that put us out of business for six months," he said. "This is like a cold. But it's a good cold. It's very viral."

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