Retail Success: Arizona Leather

Arizona Leather is a specialty retailer operating 14 stores in California, Arizona and New Mexico. The chain boasts the largest selection of “fashionable leather furnishings in the United States, from the classics to contemporary to ultra-modern.” Jim Riedl, CEO, shared his insights about selling made-in-America leather furniture sourced from a limited number of suppliers. His remarks also touch on his experiences during the pandemic and trends he sees in leather furniture sales.

Getting Started

“Arizona Leather got started when my ex-partner went shopping for leather sleepers and recliners for an RV business,” explained Jim Riedl. He found Omnia Leather, a cut and sew operation that wasn't making sleepers or recliners at that time. "We developed an idea for a factory-direct store with Omnia as our main supplier. That was the start of Arizona Leather.

"Our first store location wasn’t great. It was difficult to get into, but it did have freeway frontage.

"We looked for a better spot for our second location. I recall speaking to a leasing agent who had an English accent. ‘Arizona Leather is going to be big,’ I informed him. We are going to take over the leather furniture world!” He replied, ‘Sorry mate, RELAX THE BACK’s got that space, but give me your number in case things change.’ About eight months later he called back. 'RELAX THE BACK decided to pass on the spot,' he confessed, ‘It’s gonna be a jewel box, mate.’ And he was right.

"We started unloading trucks into the parking lot at 7AM at the second location on the Wednesday before Thanksgiving, not knowing if we would get our C of O to open. The certificate of occupancy came through at noon and the store was all set up that night, ready for business. We went home, enjoyed Thanksgiving, then opened up for Black Friday. Over that long week end we wrote more business in three days than had in a month at our first store. From there our business took off."

Special Events

“As a specialty retailer we do business differently than full-line furnishings retailers.

"When we open a new store, we do offer discounts on certain covers or styles. But Arizona Leather appeals to a smaller percentage of the furniture market,” Riedl observed, “our customers don’t show up looking for bedroom, dining or home office furniture.

“Back in 1996,” he recalled, ”we ran a grand opening sale, advertised heavily and offered free hats, hotdogs and Snapple.

"We put it all out with fixings for the hotdogs—chili, kraut, onions, relish, everything. We ate more hotdogs that weekend than in our entire lives. We wrote some business, but basically it was not the crowd we hoped for. That was the only big grand opening event we ever ran."

Product Selection

“Omnia Leather is our major upholstered furniture supplier. Arizona Leather also carries IMG and Natuzzi. We promote ourselves as the leather experts. Our website is not populated with prices or accessories, but when shoppers visit, they see that our stores are highly accessorized. We show customers how good the upholstered furniture will look when they get it home accompanied by a nice rug, occasional tables, lamps and more.”

Sniper Advertising Approach

“We are a local fixture in Southern California. In the early years we advertised like crazy in every newspaper in every market. That was the MO back in the day. That’s where our competitors were, and there were many. It seemed like everyone was opening a leather store in Southern California.

“In 2008, when the economy hit the fan, we had no choice but to cut our advertising in half. And guess what happened? Not much!

“Sure, we went down in sales from 2008 through 2011 by 10 to15 percent but many other furniture stores were down by 50 percent or more. I cut back further on expenses, only advertising during holiday periods. Over that difficult time, our competitors went out of business. Eventually there was nobody left to compete with except large, big box retailers selling mostly leather imports.

“The lesson learned was that it didn't pay to take a shot-gun advertising approach to reach out to leather furniture customers, who at the time accounted for only three to five percent of the upholstered furniture market. Specialty retailers like Arizona Leather are better off using a sniper approach. We started using Google, Yahoo and Bing to reach only customers who were actively looking for leather furniture. We’ve been doing that since 2010.”

Pictured at right is Jim Riedl, CEO, Arizona Leather and his partner at Texas Leather Paul Gonzalez.

Following the Money

“When the 2008 recession hit, we scaled back in other areas as well. We were at 10 percent unemployment. The good news is that Arizona Leather sells to the other 90 percent—especially well-heeled clients who don’t skip a beat during bad times."

Riedl found that sales continue to hold up during the COVID-19 pandemic. ”Right now,” he noted, ”people can't travel. They’re not attending big events. They’ve been stuck in their homes with their old furniture and are replacing it like crazy. We are experiencing a resurgence in volume that is unprecedented."

The Pandemic

“Most of our stores remained open by appointment only. It was a one-on-one experience. Everyone masked up, with hand sanitizers on desks and front entryways. We put up signage explaining safety precautions. If somebody sat down in a leather sofa we cleaned the headrests, arms and seats, just to make sure people understood that shopping at Arizona Leather was safe. We maintained distances. The result was that we wrote business. Our sales figures were down 50-60 percent for a time, but that little bit of business kept us afloat.”

Made in America Story

“We definitely lead with the Made in America story. When customers enter our stores in California, they are asked if they’ve visited before. If they haven’t, they hear that everything is made ‘right here in California.’ If they’re visiting one of our Arizona stores, we let them know the furniture is made ‘right here in the United States.’"

Riedl says Arizona Leather is in an especially good position to tout American Made. “We’ve beat that drum from day one, encouraging our customers to buy American, and support our workers. We’ve said that our leather furniture is made in Chino, not China. What a difference a vowel makes!

“As customers walk through an Arizona Leather showroom, they find it’s a little different than other stores due to of the level of customization available. They can change nearly anything they like about a sofa. We offer 50 kinds of leather and 350 color options. Any style can be made into a sectional. We emphasize that since it’s made right here in America unlike other stores, they don't have to settle for what they see. Instead, they can buy exactly what they want, specially designed to fit in their home."

No eCommerce

“Arizona Leather has chosen not to engage in eCommerce. We do eComm very well through another entity, however, for our brick and mortar stores, it's more effective to say, ‘Hey, call us, there’s a lot more information involved than just price.’

“Maybe someday that will change, but our present experience is that customers need to be educated about leather to purchase at our price points. Whether they buy from us or not, shoppers walk out of our store with an education on what to look for in leather furniture.

“When most people start their search for a leather sofa, they think that leather is just one thing. People don’t realize how diverse the category is when they’re looking at a website, or when they shop other stores that don’t have quality leather or the expertise to explain the differences.

“Our website is a visual catalogue of what we have to offer in leather furniture. If a shopper wants to know more, they need to speak with one of our leather experts."

Sales Education

“We do extensive in-house training. If new sales hires are local, we walk them through Omnia’s factory so they can see the scale of the operation, because it’s pretty impressive. They get to speak with the people who run the leather cage, the frame shop, as well as seamstresses and upholsterers to get a feel for the bigger picture. But, most of the training time happens in-store with a focus on how to explain all the information customers need to know about leather, not just at our store, but at any store that sells leather furniture. We are the one-stop-shop for leather furniture.

“My people know more about leather than many leather hide sales reps for a reason. The amount of misinformation out there is amazing. We still have customers come in and compare our leather covers to Naugahyde, a vinyl product made by Uniroyal about 40 years ago.

“Consumers often have the preconception that they can just let their leather furniture sit there and it will last forever. However, leather furniture needs care just like upholstered furniture. Our customers are educated on how to care for their investment. Proper maintenance is key to decades of ownership."

High Touch, not High Tech

“Fortunately, our business is not brain surgery at Arizona Leather and our partner company, Texas Leather. We use handwritten invoices and hand-drawn illustrations. The options we offer are dynamic, diverse and can be cumbersome.

Laguna Hills location is pictured above along with the San Marco store. Arizona Leather has 14 stores in California, Arizona and New Mexico.

No eCommerce

“Arizona Leather has chosen not to engage in eCommerce. We do eComm very well through another entity, however, for our brick and mortar stores, it's more effective to say, ‘Hey, call us, there’s a lot more information involved than just price.’

“Maybe someday that will change, but our present experience is that customers need to be educated about leather to purchase at our price points. Whether they buy from us or not, shoppers walk out of our store with an education on what to look for in leather furniture.

When most people start their search for a leather sofa, they think that leather is just one thing. People don’t realize how diverse the category is when they’re looking at a website, or when they shop other stores that don’t have quality leather or the expertise to explain the differences.

“Our website is a visual catalogue of what we have to offer in leather furniture. If a shopper wants to know more, they need to speak with one of our leather experts."

Sales Education

“We do extensive in-house training. If new sales hires are local, we walk them through Omnia’s factory so they can see the scale of the operation, because it’s pretty impressive. They get to speak with the people who run the leather cage, the frame shop, as well as seamstresses and upholsterers to get a feel for the bigger picture. But, most of the training time happens in-store with a focus on how to explain all the information customers need to know about leather, not just at our store, but at any store that sells leather furniture. We are the one-stop-shop for leather furniture.

“My people know more about leather than many leather hide sales reps for a reason. The amount of misinformation out there is amazing. We still have customers come in and compare our leather covers to Naugahyde, a vinyl product made by Uniroyal about 40 years ago.

“Consumers often have the preconception that they can just let their leather furniture sit there and it will last forever. However, leather furniture needs care just like upholstered furniture. Our customers are educated on how to care for their investment. Proper maintenance is key to decades of ownership."

High Touch, not High Tech

“Fortunately, our business is not brain surgery at Arizona Leather and our partner company, Texas Leather. We use handwritten invoices and hand-drawn illustrations. The options we offer are dynamic, diverse and can be cumbersome.

"New salespeople at Arizona Leather are still getting their feet wet—even after six months. Some of our best sales hires are people with a sales background from other industries. They don’t have preconceived ideas but are strong salespeople and good closers. We familiarize them with all the possibilities. Once that’s done it’s rare that they will have to say to a client, ‘No, we can’t do that.’"

“The tools Omnia Leather provides to retailers makes selling easier. It’s rare that we can’t satisfy a client’s leather furniture needs.”

Leather Trends

Western Looks: “There’s always going to be demand the cowboy and Indian western styles.

“Hair on hide does well, especially as rugs. Some of our styles have tooling on the arm caps and rails. These styles work in some of our customers’ homes."

Colors: "Now though," Riedl continued, "people are moving to cleaner, less heavy looking designs and brighter colors. Off-whites and light grays are really big. All shades of blue are popular right now. We sell a lot of nailhead styles, rolled arms and plenty of motion.

“These trends are consistent across a pretty good cross-section of our customer base, but it seems to me that clients who are 50 or older are moving back towards furniture with contemporary lines—a Scandinavian modern look, but still comfortable.”

Motion: “Motion furniture is on fire. Everybody wants to incorporate recliners. We are selling over 50 percent motion right now, and probably 75 to 80 percent of that is motorized. The nice thing about a motorized recliner is that it provides a lot more options as far as comfortable positioning.”

Small Scale: “People are looking for smaller scale upholstered pieces. They don’t want the cushions to be seven inches thick, but they are still looking for comfort. A four-inch thick cushion makes for sleeker scale, so we’ve been moving in that direction.”

Fabric & Leather Combos: Lots of our customers do fabric seats with leather, and some do all fabric. We do COM for clients as well.”

Customizable Options: "Some customers just want to buy a sofa and loveseat, but it opens up the sales funnel if a style is available in a large selection of different SKUs. We offer any upholstered configuration for a given style. I think, that has made Omnia the monster they are today. Nobody does what they do."

Keeping Things Easy

Jim Riedl likes to keep things easy. He explained, "Working with a few major suppliers streamlines the work funnel. A large percentage of our sales come from one major vendor. There are many leather furniture suppliers we could choose to work with but no one offers as much as diversity as Omnia Leather.The people at Omnia are awesome. The entire organization is filled with great people who take pride in their work. It’s obvious they are happy and that makes a big difference.

"For Arizona Leather it’s not just one supplier, it’s the right supplier for our concept. Amd since my core lines are taken care of, I’m freed up to spend a lot of time at furniture shows focusing on accessories and other concepts we are developing.