Gorman's adjusts its game plan
Clint Engel -- Furniture Today, February 21, 2011
GRAND RAPIDS, Mich. — Gorman's Home Furnishings and Interior Design opened a store here this past Friday after a 15 yearabsence - this time with an improved business model and the management help of the family that precipitated its departure in the first place, officials of the retailer said.
In January, the Detroit-area upscale retailer announced a deal to take a 55,000- square-foot space that has been occupied by retailer Israels Designs for Living Furniture. Israels has since closed, along with sister company Klingman's Furniture, following debt repayment problems.
The location is the former home of Gorman's, which entered this market 30 years ago and left 15 years later. Back then, Gorman's had been in negotiations to extend its lease, but Israels' Bob Israels ended up buying the property and opening his own store there instead.
Gorman's says it is coming back a different company with a broader "100 brands" merchandising strategy and better systems, and it's reentering a market where there is suddenly a vacuum at the upper-end.
"The Israels were - for 55 years really - great citizens of Grand Rapids," said Tom Lias, president of Farmington, Mich.-based Gorman's with four Detroit-area stores. "The more we got to know them, the more we got to know what a great family this really is - well respected in the industry ... and incredibly well thought of in the market."
Bob Israels' two sons, David and Jason Israels, will continue to lead the Grand Rapids operation as general store manager and operations and administration manager, respectively. Gorman's is getting to "skim the cream" of Israels and expects to work up to a staff of 30 to 40 experienced employees here, many of whom worked for Gorman's before joining Israels.
The retailer is returning with other advantages, too. Before its demise, Israels operated some 330,000 square feet of retail space, compared with the less than 60,000 Gorman's is taking
"When you have 330,000 square feet, you're just flailing to try to fill it," Lias said. "We're not going to be doing that. We have a controlled, disciplined approach to merchandising, and even though it's a fashion store, it will be one location with more focused merchandising. The end result of that is a much more profitable opportunity."
He said the retailer will pay attention to sales per square foot and not store size.
Gorman's largest store until now was the 40,000-squarefoot Novi, Mich., showroom. But Lias said it won't have any trouble filling the Grand Rapids location because it will include a 10,000-squarefoot design center and about 5,000 square feet of display along the lines of Gorman's sole contemporary store in Southfield, Mich.
Lias said Gorman's also is finalizing a deal for a separate 28,000-square-foot warehouse space in the market to service the store.
Key suppliers will be the same, with the exception of Stickley, which Gorman's won't carry in Grand Rapids because of an existing Stickley showroom in the market.
Suppliers among the 100 brands include Henredon, Lexington Home Brands, Sherrill, Stanley, Hooker, Drexel Heritage, Bernhardt, Universal, Century, Hancock & Moore, Natuzzi, Ekornes and Sealy, Simmons and Tempur-Pedic in bedding.
"This will be for us another Gorman's stores, just an extra 120 miles away," said Gorman's CEO Bernie Moray.
"When we were (in Grand Rapids) before, it was much more difficult to stay on top of it," he said. "Today (with advanced operating systems and technology) we can run it as it if was just next door. It will be a lot easier by comparison because we'll be in constant communication by Internet, e-mail, voicemail and everything else."
Moray said Grand Rapids has remained an appealing market even during the economic downturn. It has a healthy, diverse business base, an unemployment rate that's lower than Detroit's and "a lot of good people who appreciate their homes," he said. "It's really a home community and we see great opportunity for success."
Even before the store opens, Moray said the retailer has been getting great feedback from area consumers. "We have a reputation up there," he said. "It's not like we're brand new."
Gorman's declined to disclose its investment or sales projections for the new store, although Lias said, "We do see this having a major impact on our corporate volume."
Gorman's is listed in Furniture/ Today's Beyond the Top 100 report with estimated 2009 sales in the $20 million to $24.9 million range.
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