Allegheny Furniture Consignment expanding
Clint Engel -- Furniture Today, September 30, 2013
HARRISBURG, Pa. — With more than a year and a half of solid sales behind it, Wolf Furniture's Allegheny Furniture Consignment & More is preparing to expand with a second store in a Wolf market as well as with the company's first licensee.
In Laurel, Del., Top 100 company Johnny Janosik, under a licensing agreement, will use the software and operating system for its version - Delmarva Furniture Consignment - in vacant former retail space on its campus.
In addition, Wolf CEO Doug Wolf and the other investors behind Allegheny Furniture Consignment plan to open a second store in a yet-to-be disclosed central Pennsylvania market, much closer to a Wolf showroom than the first 30,000-square-foot AFC, which opened in Harrisburg, Pa., in the fall of 2011.
In Delaware, Delmarva Furniture Consignment will occupy 10,000 square feet of a 115,000-square-foot former showroom building.
CEO David Koehler said Janosik is rehabilitating the interior and exterior. It will begin advertising for gently used home furnishings within the next two to four weeks and expects to open in early January, if not sooner, depending on how quickly it fills up, he said.
Koehler noted the company can expand the space if the store is successful.
He would not disclose the investment nor projected sales, but said that since Johnny Janosik had unused retail space available, the startup costs will be low.
According to Wolf, Allegheny Furniture Consignment licensing deals will give AFC a percentage of sales, "which makes us a vested partner." AFC provides training at the Harrisburg location and information sharing between the consignment stores.
For the operating system behind AFC, the retailer partners with Tyler Retail Systems of Largo, Fla. Carney + Co. of Greensburg, Pa., runs the online side, which connects into the operating system, Wolf said.
With the opening of the first AFC, Wolf was hoping to bring to life something he heard industry analyst Jerry Epperson talk about - a secondary market, where consumers can get rid of unwanted furniture, thus making room for new goods.
Wolf said he also was hoping to do for used furniture what CarMax did for the used car business - make it fun to shop and more professional, with technology and online elements that savvy shoppers have come to expect.
The first AFC - in what Wolf described as a "C" location and miles away from the nearest Wolf store - has been success, he said. In its first year, AFC did more than $1 million in sales (the average U.S. consignment furniture store does less than $250,000 a year, he said), and through eight months of this year, sales are up 40% over last year.
Wolf added that more than 70% of the consigners who have supplied the product AFC has sold are buying customers at Wolf stores, "so we are indeed helping the Wolf customers create space in their home by getting rid of unwanted home furnishings," he said.
On most weekends, consumer traffic at AFC exceeds the traffic at the nearest Wolf stores and its cost-per-salesperson-up is less than 10% of what it costs to draw a consumer into Wolf, he said.
The new 20,000-square-foot AFC store will be a "stone's throw" from a Wolf showroom when it opens early next year, he said.
"We've proven we can be successful and profitable as a standalone," Wolf said. "The real magic is to have these two businesses cohabit with one another. That's where the real moneymaking and customer sharing occurs."
Johnny Janosik's Koehler said that just like Wolf, "We get a lot of customers asking us, ‘What can we do with our old furniture? Where can we get rid of it?'"
He added that the Delmarva Peninsula at the southern tip of Delaware, where Janosik is located, draws a lot of consumers from larger cities, who come for the nearby beaches. The consignment store, he said, will be ideal for those visitors with summer homes or rental properties looking to get rid of old furniture and upgrade with new.
"We think, as Doug does, that it's a great concept," he said. "We know (AFC) has taken off pretty well. We're hoping to get some great feedback and potentially expand the concept in other parts of the state."
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