Wolf Opens Consignment Store
Clint Engel -- Furniture Today, October 12, 2011
HARRISBURG, Pa. - Wolf Furniture's owners and executives have teamed with outside investors to open Allegheny Furniture Consignment & More, a retailer of gently used home furnishings and other goods that could someday spread nationwide.
The store is an idea that has been brewing at the Bellwood, Pa.-based Top 100 company for years, said Wolf President Doug Wolf.
The goal is to help both consumers and Wolf Furniture by clearing out old furniture and making room for new product. The retailer expects to do it profitably so that the concept can be rolled out to other Wolf markets and also to furniture retailers across the country as a turnkey program.
The 30,000-square-foot Allegheny Furniture Consignment is in the former high-end Classic Interiors location on Derry Street in Harrisburg, Pa. It includes a 20,000-squarefoot showroom and 10,000-square-foot warehouse. Both are already packed with used furniture as well as new bedding and a few other home furnishings items on consignment from suppliers to help balance out the assortment.
Wolf hired Carney + Co. of Greensburg, Pa., to develop a website for the new venture, at www.alleghenyconsignment.com, and used Wolf business partner Tyler Net of Clearwater, Fla., to develop the software for the store.
Online and in the store, consumers can view the full inventory and see today's price as well as the dates and pricing for three scheduled markdowns - cutting the price 15% after 30 days, 40% after 60 days and 50% after 90 days. If an item doesn't sell after 120 days, it goes back to the consumer or is donated to charity.
The store shares the sales proceeds 50-50 with the consignees.
Sellers can start the consignment process online and for a fee, they also can arrange for pick up of the goods they want to consign, something Wolf said sets the store apart from other consignment operations. The seller doesn't pay for the pickup until after an item sells.
Wolf said his company began investigating consignment about six years ago, thinking that the industry "is not going to really be propelled forward until we can create a decent secondary market for people to move through their stuff."
"At about the same time we started watching the Car-Max revolution happen in used cars," he said, which improved the reputation of what had been a "sort of backroom, dirty-window" business.
Recently, Doug Wolf and his father, CEO John Wolf, started talking to some friends outside the business about the consignment concept. The friends - and now investors - liked the idea of setting it up as a separate company. Wolf executives Gene Stoltz, Doug Shaffer and Chuck McLaughlin also came in as partners.
Wolf hired Troy Lerew as general manager and chief operating officer over the new company, Allegheny Furniture Consignment. Lerew most recently was vice president of sales for furniture protectant company UV3 Masterguard and earlier was in management at Montage Furniture Services and former retailer Good's Furniture of Lancaster, Pa., and then Breuners Home Furnishings after it acquired Good's.
Doug Wolf's daughter, Madeline Wolf, is operations manager at Allegheny, making her the fifth generation of the family in the home furnishings business.
Wolf has begun promoting the new business through mailers and commercials that run in Wolf stores on closed circuit TV.
"The hard part isn't getting people to show up and buy in consignment stores," Doug Wolf said. "The hard part is getting enough high quality product in to develop the business."
Including securing the lease and creating new systems to handle consignment, Wolf and its partners have invested more than $500,000 in Allegheny Consignment.
While the average furniture consignment store does $240,000 in annual sales in a footprint of about 4,000 square feet, according to figures Wolf got from the National Assn. of Resale Dealers, Wolf is counting on doing more than $2 million a year from Allegheny's 20,000 square feet of selling space.
The break-even is lower, but Wolf wants the bigger number to show that the concept can be expanded to other Wolf markets as well as marketed to other retailers.
"Our real drive and desire and the reason we've spent this much money on our systems and our website is that I wanted to be able to offer a turnkey program to other large furniture retailers," he said, adding that several of his retail friends in the industry already have expressed interest.