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| Portrait of a Valley store |
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| By
Tom Edmonds -- Furniture Today, 1/14/2002 |
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VAN
NUYS, Calif.— A barebones
operation promoted by a rogues'
gallery of marketing characters,
Michael's Furniture here is hot,
unfazed by the retail swoon that
accelerated since Sept. 11.
Every market, it seems, has a
bootstrap promoter like this,
but few can match the nonstop
energy and perpetual state of
event marketing at Michael's.
Located in the San Fernando Valley
north of Los Angeles, it is a
regular in the regional Pennysaver
and runs campy cable commercials
that are either funny or unbearable,
depending on your taste for puns
and silly gags.
With an endless stream of events
like live radio feeds, turkey
giveaways or appearances by sports
personalities, Michael's is up
close to 25% for the year. The
store keeps plugging away week
after week, promising people that
it has the best prices because
"we're the store with the low
overhead" - as owner Jerry doffs
his hairpiece.
"I always have a goal to go up
every year without spending any
money, at least 8% to 10%," Jerry
said, explaining the strong gains
Michael's has made this year.
"As we get stronger every year,
more of our competitors fall by
the wayside. Since the war, I've
gotten more aggressive. We're
promoting right through instead
of sitting here pouting, and we're
having a good run."
The 40,000-square-foot warehouse
store is a Spartan affair, with
cement floors and minimal accouterments.
This reinforces the value message
since Jerry firmly believes
that "price is everything," although
his recent success has also taught
him that reputation counts for
a lot, too.
The son of a furniture retailer,
Jerry, 52, has been building
that reputation as a furniture
retailer for 30 years. "When other
people wanted to be doctors and
lawyers," he said, "I knew I was
going to sell furniture."
So he got started early, buying
a small shop in Van Nuys in 1971
at the age of 22. The previous
owner of the 10-year-old business
was named Michael, and the name
stuck because "I couldn't afford
to change the sign."
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Jerry moved to
his current location in 1975,
but the most important upgrade
to the business took place
in 1972 when he married Roz,
who continues as the chief
administrator for this $9
million-a-year, non-computerized
business. "I'm more the
outside person, and I do the
advertising and the sales
floor," Jerry said. "Roz
runs the office and everything
else. She keeps us headed
in the right direction."
The advertising is built around
a cast of characters played
by store staff, including
Jerry's Mattress Mike. Also
on hand are Bunny, Boxspring
Bob and Furniture Faye, played
by Jerry's daughter.
Jerry obviously tries to
have fun with his advertising,
while also driving people
into his store. He runs a
"Going Out for Your Business"
sale every quarter, making
a play on words with the name
of the latest failed retailer.
v
"Everything we do is fun,"
Jerry said. "Talking to
the customers in the showroom
is fun. When they see me,
they know me from TV, and
they smile."
Michael's merchandise mixes
closeouts and distressed manufacturer
inventory - a big event this
year was built around a buy
Jerry made after Ward's
closed - with a regular assortment
of promotional and midpriced
lines.
"We'll buy anything," Jerry
said. "And we pass value on
to the consumer. We get a
tremendous amount of repeat
and referral business because
they trust us to provide value.
Once a week, somebody stops
me in the store and tells
me they bought from me 20
years ago. That's always a
special feeling."
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Michael's
has eight salespeople, and each
member of the staff averages
about $1 million in sales per
year. Store Manager Mat Herman
believes this uncommonly high
total is attributable to several
factors, not the least of which
being the lack of turnover on
this experienced staff. Most
of them have been with the store
for eight years or more.
Plus, salespeople don't let
shoppers leave without a sales
ticket, turning them over and
negotiating the price until
a purchase is made. "We don't
beat people up," said Herman,
a former Stratolouger sales
representative. "We keep them
in the store by giving them
a reason to buy. Our close ratio
is at least 50%."
With this TO sales system and
its blaring advertising, Michael's
is an old-school furniture store.
In fact, the store, with an
adjoining warehouse where about
half the customers pick their
furniture up immediately after
purchase, is not computerized.
"We're not very computer smart
here," said Jerry . "I'm scared
of them."
He's not scared to spend money
when he sees the advantage in
it, though. For instance, he
buys lunch for his 32-person
staff every day, at an annual
cost of more than $50,000.
"I want everyone to be happy,
and I want to keep it a family
atmosphere," he said, adding
that an additional benefit comes
to him from keeping staff in
the store or in the warehouse.
"We want to be available for
our customers when they need
us." |
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| Michael's Furniture at a glance |
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Founded
in 1961. Bought by Jerry
in 1971. |
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Stores:
A single-store operation
in Van Nuys, Calif. |
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Display
space: About 40,000
square feet with adjoining
warehouse. |
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Advertising:
Heavy on cable TV in the
Valley, the Pennysaver weekly
distributed to more than
1 million homes each week,
and some radio. |
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Services:
Free delivery, although
about half the customers
pick it up themselves. |
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Staff:
Eight in sales and 32 total.
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Vendors:
Ashley, Diamond bedding,
Douglas, The Good Cos.,
Sandberg, Spring Air, Standard.
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Estimated
2001 sales: $8 million
to $9 million. |
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