Furniture stores succeed against big competitors, economy

Independently owned furniture stores struggled with sagging revenues for four years, but the business model still is a viable concept, store owners say.

Even so, making it as an independent in a business increasingly dominated by big retailers requires nimble business strategies and a loyal following.

Over the years the greater Reno-Sparks area has seen many of its independent furniture stores close. Recent store closures include Ric's Furniture Warehouse and Reno Gallery of Furniture.

The furniture retailers still standing especially those in smaller communities benefit from generations of sales to repeat customers or agile new strategies that have helped keep the lights on. Key components of success include rigid control on inventory and staff reductions to control expenses.

Tim Keppel, owner of Silver State Furniture in Sparks, founded five years ago, decided to forgo expensive showroom space and operate with a factory-direct business model. Keppel has a 2,000-square-foot space that has some display furniture, but for the most part customers narrow their options by poring over catalogues and online product offerings, and Keppel uses his expertise to help them make the best decisions.

Cutting out the overhead of sales staff and a showroom allows him to compete on price with big retailers, Keppel says, and repeat business and referrals kept sales steady through the recession.

"It's just one person to deal with; I don't have a large corporate structure," Keppel says. "I charge a standard minimal markup just to stay in business. I don't have a Mercedes I charge just enough to pay my bills."

Trust is key to longevity in the furniture business, adds Jeannie Gillins, co-owner of Bodily's Furniture in Elko. Gillins runs Bodily's with her husband, Ed. Her parents, Ed and Beth Bodily, purchased the stores in Elko and Winnemucca in 1963. The Winnemucca location has been in business since 1890, Gillins says.

"We treat everybody with respect, we are honest and try to make it right to resolve issues to everyone's benefit," Jeannie Gillins says.

Customers count on receiving straightforward sales advice and enjoy rapport with Bodily's longtime staff, Gillins adds. One driver, Mo Albarran, recently celebrated 34 years with the company.

Bodily's primary competition in Elko is the rent-to-own chain Aaron's, along with Good Morning Furniture and Walmart. However, the store also faces pressure from residents driving to big-box retailers in Reno, Boise or Salt Lake City for larger selection or the perception of better deals in larger markets.

Sales at Bodily's increased in 2011 primarily because of Elko's thriving economy, but the store suffered at the start of the national recession.

"Even though gold prices were high, the economy everywhere else was low. People saw all these issues on the news and were not certain about their job security so they cut back," Gillins says. "But the gold mines continue to thrive, and the word is that they are bringing in numerous new employees with their families."

Jackie Werner, co-owner of the two JM Furniture stores in Carson City, acknowledges that she's fortunate to still be in business after the dark times following 2008 when furniture sales followed the path of the stock market straight down.

"That was a scary time for us," Werner says.

JM Furniture reduced its staff 50 percent over the course of six months. The business posted year-over-year sales growth during 2011, reversing the trend of the previous two years.

"It is not some magical thing we are doing," Werner says. "One of biggest things is that we try to be customer friendly, and our service definitely is a big part of that. Being a bit smaller, we can do that. There are people that truly have been coming here for years and years."

Juniper Hill Furniture and Design Center of Reno, whose product lines have been favored by a higher-end clientele, is returning to its roots after a brief closure and liquidation of its inventory. Owners David and Trish Dietze are downsizing their 22,000-square-foot space and 12,500-square-foot warehouse into a 7,800-square-foot showroom at East Patriot Boulevard the same-sized operation they opened with in 2000.

The downsizing allows the Dietzes to maintain tighter control over costs. Revenues have steadily declined since the onset of the recession, Trish Dietze says, and Juniper Hill was sitting on roughly $4 million in unsold inventory. At its peak, Juniper Hill employed 37; today, the company employs about 10.

Co-owner and Manager Stacy Hernandez says the company's sales model also has shifted.

"We special-order 78 percent of what we are selling," she says. "We didn't need all the showroom space."

But consumers still want to see furniture before they by.

"Online furniture stores were one of the first industries to fail on the Internet when everyone went dot-com," Hernandez says. "People can't see shape and scale when they are seeing a little picture of a sofa. The furniture industry is always going to need to have some kind of presence with a brick-and-mortar store. There is not going to be any Zappos for furniture; it is just not practical."