A three-store Ethan Allen franchise achieves dramatic growth rates by providing a high level of customer service and focusing on having fun. After their recent acquisition of an under-performing store in Annapolis, MD, they doubled the monthly comp sales in only five months with the same staff of designers.
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Retail chain achieves many individual sales of $10,000, $15,000, even $50,000 by discussing fun instead of “the numbers”.
by Janet Holt-Johnstone
On the first day of October, 2004, a newsletter’s exuberant headline crowed, “WE DID IT AGAIN!” Detailed in the text were record breaking sales and house calls. The two-store licensee retailers received a congratulatory message from the corporate CEO, praising their efforts in developing a “solutions-based team”. A little less than a year later, September 2005, with an acquisition under their belts, results were even more extraordinary. Everyone staffing the now three stores had exceeded the previous year, again both in sales and house calls, this time by 130 percent. “It was amazing,” said General Manager Brandon Levine. “But by December, 2005, we reached 150 percent increases!”
This story goes back 50 years when Leonard Levine, Brandon’s grandfather, opened Garon’s Furniture in Towson, Maryland. “Garon” is a neat combination of the names of Leonard’s two sons, Gary and Ron. A year later, Leonard opened a second store in nearby Catonsville. In 1960, the family enterprise joined Ethan Allen as licensees. And the corporate CEO from whom they receive accolades is Farooq Kathwari, “A terrific guy! He turned Ethan Allen around in the early ‘90s and our family has a tremendous amount of respect for him”.
Vertically integrated, there are between 120 and 130 corporately owned stores, 300 in total in North and South America, Canada, the Middle East, and Asia where the product lines are selling very, very well. “There are three sawmills and 11 factories primarily in North Carolina, and additionally in Pennsylvania, New Jersey and California. Seventy percent of our product is manufactured in the United States, 30 percent in China, closely supervised by our people.”
There are great benefits for licensees through their close relationship with the corporate group. “They do a lot of our marketing for us, for instance national television spots on such programmes as Oprah and The ToDay Show. The cost is included in the price we pay for our furniture. Our direct mail pieces are designed by the group and they mail them out for us to our preferred customer list. They offer a fun opportunity to consumers on the Internet (www.ethanallen.com) to rearrange their rooms, moving furniture about on computer until they arrive at what they want. And they also provide us with public relations assistance.
“Inserts work well for us, too. They tell the story of the product, furniture and accessories, and we tell the story of the design service we offer.
“We have no need to attend Markets (High Point, Vegas, San Francisco, Toronto, Milan). We focus on selling the product in our stores in the most efficient way we can. Ethan Allen’s World Headquarters is at Danbury, Connecticut, and they do all the design, selection and manufacturing for us. We go to information sessions at Danbury once or twice a year and we’re immersed in fashion knowledge. That’s what we are, after all, a fashion industry!
“We handle our local marketing in the Baltimore Metro area. We work with design shows by providing them with experts from our staff, both radio and television programmes. Anybody can buy an ad, but this sort of exposure is more convincing to the consumer, greater credibility. We have a relationship with a morning radio show host who mentions our stores, product introductions, new decorating techniques, special events and talks about visiting the stores with his wife, the things they see and advice about trends and so forth. People e-mail him and he reads the e-mails on air.
“We staged a party, ‘Celebration of Colour’, for 150 invited guests, some preferred customers, plus outside designers, an evening catered event. The Colour Marketing Group, and Ethan Allen’s Vice President Style, Norah Murphy, presented incredible seminars. We added to our guests’ knowledge and had fun at the same time.
“In 2006, we plan to start having wine and cheese events. We already have champagne in the store for special occasions, we have cookies baking for their welcoming fragrance and coffee and tea are always available for our customers.
“In the past year, we’ve been working on creating an image as style setters. We were featured in ‘Chesapeake Home’, a publication that targets a higher end demographic, our customer base. Profiles were written about two of our designers and their work with great accompanying visuals. There’s another story upcoming in the magazine ‘Smart Woman’ with similar readership, a profile with customer testimonials.”
A quarterly newsletter covering new product lines is sent to outside designers to keep the stores “top of their minds”.
The Garon Family is very much involved, as you might expect, with community happenings. “We work with Big Brothers and Habitat for Humanity. We donated a percentage of sales to the Red Cross after both the Katrina and the Pakistan disasters.”
But their Number One interest for the past five years has been Baltimore’s Susan G. Komen “Race for the Cure”. Before breast cancer survivors begin their race, they have the opportunity to sign three white chairs, donated by Ethan Allen, stationed at the registration booth. After the race, the chairs are on display at the stores for a week so the general public can read the messages from those who “have fought cancer and won”. During that week, Ethan Allen donates one percent of all sales to the Maryland affiliate of the Susan G. Komen Breast Cancer Foundation for use in education, screening and treatment programmes.
The chairs go to the Comprehensive Breast Cancer Centre at St. Agnes Hospital, to Sinai Hospital’s Alice and Lois Lapidus Cancer Institute and to St. Joseph Medical Centre. “They are symbols of hope and support for those women with breast cancer and their families. The patients can relax in one of our chairs while being surrounded by words of reassurance and the promise of survival. This disease has a high cure rate if detected early, and some of our contribution goes towards education about early screenings.
“Each year our team looks forward to supporting the ‘Race for the Cure’ and 2005 was particularly special because we were celebrating Wendy Bond, an Ethan Allen designer who is a survivor of this devastating disease.”
Members of the family engaged in Garon’s operation are Ron Levine (Brandon and Jordan’s father), Gary (their uncle), Gary’s daughter, Brooke Thomas and, of course, Brandon and Jordan. Brandon was a science major at university, Jordan specialized in finance. “Our designers are a mixture of those with alphabet soup after their names and excellent, dedicated people persons who have a passion for the business. Dan Galley, our Annapolis store manager, has a real interest in design. We have a three tier interviewing process when we’re hiring new people. Their aptitude for reaching out to people, to connecting with them, is essential.
“Over the past few years, we decided to focus primarily on two key areas in our business that directly involve the overall morale of the company and the recruiting process. The acquisition of the third store at Annapolis is the best example of how our team took an under-performing store and literally doubled the monthly comp sales in only five months with the very same staff of designers. We hired an incredibly talented and energetic district manager and a general manager who both specialize in the art of fun! Both managers, who had absolutely no prior background in furniture and design, were able to quickly learn the business and turn a heavily bureaucratic and unmotivated staff into one of the greatest success stories that I have ever personally witnessed.” (David Prestianni is District Manager, and Dan Galley, Annapolis Store Manager.)
We asked how they had achieved such a startling August 2005. Positive attitude? Special promotions? Brandon said, “Well, we did have a warehouse clearance event then and we created awareness of the event with a lot of advertising. But I put the success down to the fun attitude we talked about together with no bureaucracy, no layers of people. There’s an intimacy of exchange of ideas in our small family group of stores. It’s a joy for all of us to get up in the morning and go to the stores. Our meetings are fun every morning. We rarely talk numbers, everything is morale based. Once each week we have an all stores meeting for an hour or an hour and a half.
“Our Mission Statement speaks to taking customer service to the next level and we’ve all adopted that principle. We value the relationships we have with our customers, we bond with them, they’re a part of our family. Our goal is to ‘hug’ everyone who visits our stores and help them make their home as beautiful as possible.
“Our Dream Team concept is part of the ‘wow’ factor, what gets the customer loving the service. We go as far overboard as possible. We feature house calls, no retainers, no fees. We measure, we take pictures. The designer goes to the customer’s house and brings with her/him an entourage of people, all specialists. It blows the customers away. Even if they don’t purchase, they certainly rave about us to other people and they, in turn, will come to the store. We get plenty of feed back and attend customers’ parties when they are celebrating their new looks. A lot of our sales are $10,000, $15,000, even $50,000.”
Jordan told us, “When the consumer thinks of great design we want her/him to think Versace, Armani and ETHAN ALLEN! And the future looks very bright. In 2002 we completely gutted our stores and remodeled them. And we plan to change the exteriors. Ethan Allen has some new ideas to refresh our look; it’s always moving, always something new! Maybe in the future we’ll acquire another couple of stores around the Baltimore area. There’s so much untapped market, the economy is growing, people want to live here. Even out of state, but we’re not ready for that yet.
“We have been talking seriously about an Ethan Allen Style Studio in the urban revitalized area, around 5,000 square feet, focusing on design, telling consumers about the products in our stores only 15 miles away. That’s where we’ll have our wine parties and other events.”
Brandon added, “We’re going to be really creative. It’s interesting that we have people calling us asking, ‘Do you guys do reupholstering?’ We’ve been farming out work like that, as well as window treatments. So we’ve been thinking of expanding our services. There’s enormous business in soft goods and window treatments out there. In order to get better pricing for ourselves we could develop our own workrooms for draperies, reupholstery, even touching up wooden furniture, one centre for all of this. An idea in the works!”
And people are smiling at Furniture World’s offices in New Rochelle. Brandon attributed some of Garon’s success to “the useful marketing, sales and leadership information that gets published every month in your magazine”. That the magazine was one of “the catalysts that motivated and inspired our team”. Thanks Brandon! We all wish you continued success . . . and lots of fun and hugs along the way!
Janet Holt-Johnstone is retail editor at Furniture World Magazine.
View all articles by Janet Holt-Johnstone