Hometown Heroes find ways to succeed at retail

Four tell their stories at Furniture/Today Leadership Conference

Clint Engel -- Furniture Today, December 14, 2010

Tommy Miskelly	Charlie Malouf
Charles Liebman	Gary Ecoff

NAPLES, Fla. — Tommy Miskelly says the best way to avoid new competition in your marketplace is to become that competition.

"Imagine someone coming to your market," he said. "Create a competitor who could be the biggest threat to you. Have discussions. What would it do? When you figure that out, you do it yourself before they do."

Miskelly, a partner in Jackson, Miss.-based retailer Miskelly Furniture with his brothers, Chip and Oscar, spoke on the Hometown Heroes panel at Furniture/Today's Leadership Conference here this month.

Also sharing thoughts on what they have done to stay on top of their markets during relentlessly tough economic times were Charlie Malouf, a partner with Jonathan Ishee in Charlotte, N.C.-based Ashley Furniture HomeStores licensee Broad River Furniture; Charles Liebman, president of Mechanicsburg, Pa.-based N.B. Liebman Furniture; and Gary Ecoff, founder and president of Boca Raton, Fla.-based Carls Patio.

Miskelly Furniture has been evolving - adding competitor-potential features to its business - for years, said Tommy.

In 1995, the brothers bought 25 acres with the plan of building a superstore. They visited Top 100 stores and other retailers for ideas and ultimately built what they thought was the best of the best, a store they would never have to expand.

"We expanded about three times," Miskelly said of the now 120,000-square-foot flagship store. The building's special touches now include a sports museum, a basketball court, a café, a home theater room and a Caring Carousel that shoppers and their kids can ride for a $1 donation to charity.

In addition to the superstore, Miskelly operates a clearance center and The RoomStore by Miskelly - a room package concept that a competitor might use - and pays a fee to RoomStore of Richmond, Va., for the use of the name. In the back of that store, Miskelly is adding the new Furnish 123 concept by Ashley.

There's also a smaller Miskelly store in a Jackson suburb, which the retailer converted from an Ashley Furniture HomeStore, and two SleepStore by Miskelly showrooms. The retailer long ago decided it wanted to dominate the bedding market in Jackson.

He said Miskelly Furniture enjoys a 48% to 60% market share in its area, depending on who is doing the study, and has worked to achieve its success in numerous ways.

"We want to dominate - absolutely own - one media," he said, adding that Miskelly pumps the bulk of it is marketing dollars into television - on spots that highlight the Miskelly brothers as trusted spokesmen.

"Our most protected asset is our reputation," said Miskelly. He said the company is careful that all its decisions reflect the family's core values and community focus, which include supporting local charities that benefit children.

He also encouraged conference attendees to consider updating their stores and investing in new technologies. Miskelly Furniture also has a penchant for measuring its operations against the best in the industry, he added.

One of Miskelly's best moves lately, he said, was the initiation of employee evaluations by an outside company. The information the retailer has gleaned from the reports is amazing, he said, and among other things, brought Miskelly's attention to the need for a customer rewards card or loyalty program which it plans to implement soon.

{what is employee evaluations by an outside company? how can evaluating employees lead to knowing you need a customer rewards program?}

 

Broad River's Charlie Malouf said the weak economy forced his company "to change the way we look at certain things."

But after trimming expenses, he and Ishee also decided to pursue a careful expansion into new markets, to take advantage of lease rates that have come down in recent years.

"We went to the banks and said we wanted to grow into new markets. They told us we were crazy," Malouf said.

Broad River moved forward anyway, opening stores in Columbia, S.C., in late 2008, in Augusta, Ga., in 2009 and in Hickory, N.C., this year. Today, the Columbia and Augusta stores are the most profitable in the 12-store chain, he said. And Broad River's average occupancy costs are lower than they were two years ago.

"So now the banks are asking us what's the next big market we can go to," Malouf said.

Another change for the retailer has come in the way it speaks to consumers. Broad River used to employ a lot of what Malouf called "interruption marketing," traditional broadcast and print advertising. More recently it has been successful with one-to-one marketing, gathering e-mail addresses and other information from consumers who come to the stores and asking for permission to follow-up and communicate with them cost effectively via phone calls, e-mails and text messaging, for instance.

"We really had to embrace this in our company culture," Malouf said, noting that it was vital to get buy-in early from sales associates responsible for capturing that information while the consumer was in the store.

Broad River also has created special short-term sales events, usually outside normal business hours and with a promotional hook such as a chance to win a TV or a vacation.

In 2008, the stores held a "Secret Sale" communicated by e-mail only, and "within a few hours we had generated $150,000 in sales," Malouf said. An event last month generated more than $1 million - again after 6 p.m. on a Sunday evening.

"That's a very big day for us," he said.

Hometown Heroes panelist Charles Liebman recalled how N.B. Liebman Furniture was struggling years ago to come up with a "unique selling proposition" to set the retailer apart from me-too competition.

"I'm in a medium size market," he said. "I'm competing with literally dozens and dozens of furniture stores and more are opening up ... so it really helps to have something to help you stand out."

But finding that something wasn't easy. Playing up the best selection would be trite, and hard to defend if a larger store opened in the market, while "guaranteed lowest price" also would invite challenges.

Then Liebman thought about the store's after-sales service, how every customer gets a follow-up call after delivery and is surveyed about their experience. The responses are well-documented and are passed around at manager meetings, and many are filled with praise. Someone at Liebman suggested the store take those positive comments and convert them into commercials by getting the customers on set to do the talking.

Liebman came up with the slogan, "Our Customers Speak for Us." Eventually, the two-store retailer added the phrase to its trucks, price tags and invoices.

Initially, it was tough to get customer volunteers to appear on camera, he said. But this got easier as the commercials started airing and people saw what to expect.

"At this point we have about 100 people waiting at all times to do a commercial," he said. "When you sit down to do a shoot with 10 or 12 people, you get so much good material that we can't even use it. Sometimes it's month before we go back and do another shoot because there's just so much good stuff."

N.B. Liebman started "Our Customers Speak for Us" around 2000 and had seven great sales years, Liebman said. The recession has hurt in recent years, "but I think our percentage down is quite minor compared to others," he said.

Gary Ecoff of Carls Patio pointed to several factors contributing his company's success, starting with the late Fred Friedman. Friedman was president of Carls Furniture when in 1993 Ecoff approached him with the idea of developing a chain of patio stores, starting with a property next to the Carls store in Palm Beach, Fla.

"Fred was an amazing retailer, an amazing merchant and an amazing all around guy," Ecoff said.

Since then, the upscale Carls Patio has grown to 19 stores operating as Carls Patio in Florida and Berk's, Frellen's and Saddleback of San Diego in California. It also operates the PatioFurnitire.com e-commerce website and Terrace 436, a to-the-trade outdoor business.

"Like all companies in trying times, you have to look at new ways to generate business," Ecoff said.

That's why in recent years Carls Patio has done more to go after the contract sector, adding a dedicated person and dedicated product line to aggressively go after the restaurant and condominium business.

And after sitting on the PatioFurniture.com domain name for about 10 years, Carls Patio recently began to pursue the e-commerce business and has high hopes of reaching consumers in parts of the country where something like Carls Patio doesn't exist.

In 2008, Carls Patio was recapitalized by investment firm Weinberg Bell Group through a leveraged buyout. It went through what Ecoff calls a "transcession" -backed by proactive management with new financial expertise able and willing to make tough business decisions ahead of the curve.

"It was a bad time to do it, but a great time, too, because we got the restructuring (out of the way) and once we get some cooperation from the marketplace, we'll really be able to knock the cover off the ball," he said.