2009 Apollo Award nominees focus on Best Practices
Kristine Ellis -- Casual Living, September 1, 2009
Since their inception 50 years ago, the Apollo Awards have honored the industry's top specialty retailers for their expertise, dedication to customers and passion for the outdoor furniture business. This year, specialty dealers faced some of the toughest economic conditions ever. Yet, as this group of nominees proves, the industry's future is bright.
Finalists will be honored and winners announced at the Apollo Awards banquet on Sept. 23 at Chicago Union Station, during the International Casual Furniture & Accessories Market.
Just six years old, first-time Apollo Award nominee AuthenTeak has gone through a major growth spurt every two years since Eric Brenner and Damon Fogel opened the business in 2004.
It started out as a weekend-only business selling imported teak out of a 1,200-sq.-ft. space. Neither Brenner nor Fogel had a background in furniture or retail. "We didn't realize what we were getting into," Brenner said.
Customer response and their growing passion for learning everything they could about the industry quickly changed their goals. Soon after they opened, Brenner and Fogel decided to add brand name teak manufacturers to fill out their product mix.
By the end of their first year, they realized the demand for other categories and started to diversify their mix.
"By the end of the second year, we started thinking that if we were able to do the business we were doing in a small location with horrible visibility and a limited product offering, what would happen if we did it as an actual business rather than a hobby," Brenner said.
The two sold their other business and started to focus full time on outdoor furniture. Today, they have about 15,000 square feet of showroom, 10,000 square feet of warehouse and offer a full line of outdoor furniture as well as grills and outdoor kitchen products.
With a warehouse full of early-buy inventory when the bottom fell out of retail, Brenner and Fogel adjusted their business model again last fall.
"We started promoting the in-stock product right away, which allowed us to build up our cash flow during the off season," Brenner said.
They started cold-calling the contract market, while examining every facet of their operations to cut the fat. They didn't, however, cut any of their small staff of three.
"We like the people we work with and we really value the chemistry, which is very important in a small company," Brenner said. "It was a big decision, but we didn't want to mess up what we've had success with."
Fruehauf's Patio & Garden Center, Boulder, Colo.
Long known for its "shopper-tainment" value, Fruehauf's Patio & Garden Center focused on giving its customers the best experience possible this season by going back to basics.
"We have been doing this for well over 30 years, and I know this has been one of the most challenging for me so we certainly had to look at everything carefully," said Mary Fruehauf, president and owner. "In a year like this, it's about going back to what works."
First and foremost, that meant making sure the 2-acre destination business looked better than ever. In addition to fantastic displays of outdoor furniture, accessories and gifts, Fruehauf's partnered with other area businesses to create a permanent "home and garden show" on-site.
"We teamed up with a landscape company, an awning company, an artificial turf company and some others, and let them create an alternative backyard where people could come and get ideas, just like a home and garden show," Fruehauf said.
Economy permitting, Fruehauf plans to expand the area next year and keep it evolving and changing to draw customers back time and again.
Although the business tightened its belt, cuts were behind-the-scenes.
"You don't want your customers to think that something is wrong, so the changes we made weren't visible," Fruehauf said. "For example, we didn't change our staff level much or our customer service."
For the most part, customers were purchasing at similar levels to last year but doing it over several visits.
"I saw a lot of people making two or even three purchases over the summer, whereas in the past they would just come in and buy everything they liked at once," Fruehauf said.
Customers also spent more time with the sales staff, making multiple visits before deciding to purchase.
"It wasn't that they weren't buying, they were just more cautious shoppers," she added.
This is Fruehauf's fourth Apollo Award nomination.
The Pool & Patio Center, Metairie, La.
Early this year, when consumer confidence was at its lowest and pundits were finally calling the economic climate a recession, the Pool & Patio Center started adding the words "Recession Pricing" to its sales placards.
"We thought that if we anticipated their request for a recession discount by using that terminology on our sales price placards, they might be reluctant to ask for a deeper discount," said Bruce Aronson, managing director of the Pool & Patio Center.
It was just one of several tactics Aronson used to deal with the recession head on. He also revised his marketing strategy by increasing television advertising and cutting back on print ads, cut two non-salespeople and encouraged his staff to do on-site consultations. Those steps helped. Aronson believes one of most effective strategies this season was offering a large selection of in-stock product despite cutting back on early buys.
"When consumer confidence finally started to go up in April and May, most customers wanted immediate satisfaction," he said. "We had brought in enough to be able to satisfy their needs."
Just as importantly, the business did not compromise its customer service despite laying off two people.
"It wasn't easy," Aronson said. "Everyone in the store had to do double, and in some cases triple, duty. I can't tell you how proud I am of my staff. They have stuck with me through Hurricanes Cindy, Katrina, Gustav and Ike. Their loyalty is the cornerstone of my success."
The Pool & Patio Center opened in 1952, when Aronson's father started building in-ground pools in New Orleans. It now offers mid- to high-end outdoor furniture in its 14,000-sq.-ft. showroom. This is the retailer's second Apollo Award nomination.
Sunnyland Furniture, Dallas
Winner of the Apollo Award in the Single Store Category three times in the last five years, Sunnyland Furniture followed its proven course this season and thrived in spite of the economy.
"People keep coming in, and we keep taking care of them," said David Schweig, who opened the store in 1997 with his wife Debbie.
Overall, Sunnyland's strategy for 2009 has been to optimize every opportunity.
"It is making sure that every delivery goes out perfectly, that payments are received on time to keep the cash flow going, that every order is written correctly the first time — all of the things that you might be a little careless about when times are good and you are busy," Schweig said. "We are now taking the time to make the most of every situation."
Schweig was pleasantly surprised its traffic counts this year have been almost identical to past years. In general, Sunny-land's customers were shopping but making smaller purchases. For instance, luxury homeowners who in the past might only buy brand names were willing to go with imports this year, adding a fresh look for a lower price.
"We have had very good years with almost double-digit growth each year for almost five years," Schweig said. "This year was down, but in June and July we were back up almost matching last year's numbers."
Sunnyland draws destination customers who come in to browse its three showrooms. In addition to a large open space of about 23,000 square feet, there is a 10,000-sq.-ft. area displaying various distinct outdoor rooms and a 2,000-sq.-ft. multi-themed fantasy backyard.
Schweig carried less inventory this season but hasn't decided yet what he will do for 2010.
"When we look at our business, we feel very fortunate," he said.
"Don't fix what ain't broke."
Williams Ski and Patio, Highland Park, Ill.
While it is always an honor to be nominated, this year's Apollo Award nomination of Williams Ski and Patio holds special significance for Mark Williams and his family.
"We won the first year the Apollo Award was given, 50 years ago," said Williams, president. "My father was just getting the patio business going then."
In addition to a tight economy, Williams Ski and Patio, a division of Williams All Seasons, faced abnormally cool weather this season making it even more difficult to maintain store traffic. Still, those customers who come in are serious shoppers and are buying product across all price points.
"I think it's loosening up a little bit now, but overall there has been very little recreational shopping," Williams said. "People have had a specific thing in mind and come in ready to make a purchase. They haven't come out just looking for inspiration."
To build traffic, Williams has been exploring various online advertising options.
"We have just scratched the surface of what is out there, but we are trying to learn that side of it," he said.
Perhaps the biggest change for the company this year is its departure from the indoor furniture business, which operated in a building located next to the ski and patio shop. The company will continue to house its warehouse in that building and rent out the showroom.
"The indoor furniture business has its own set of challenges, and I don't want to be involved in them," Williams said.
In fact, he believes the outdoor furniture industry as a whole should be cautious about blurring the line between indoor and outdoor products.
"Some people position outdoor product as being nice enough for indoors, and that is not the focus that we want our industry to have," Williams said. "We have to be innovative for outdoors .... I don't think the patio industry benefits by being distracted by the indoor market."
In addition to winning an Apollo Award in 1959, Williams Ski and Patio won in 2003. It has been nominated for the award several times.
|ABSCO staff members stand behind Cathy Galbreath-Watson, her mother Catherine Galbreath and husband Glen Watson.|
|Colorful pillows and umbrellas are part of the full range of accessories available inside ABSCO.|
Multiple Store Nominees
ABSCO Fireplace & Patio, Birmingham, Ala.
A first-time Apollo Award nominee, ABSCO Fireplace & Patio has three retail locations offering a full range of outdoor furniture, hearth, accessories and grill products.
Inventory control topped the retailer's list of best practices in a tough market this year, as did working closely with manufacturers who could quickly turnaround special and restock orders.
"I also tried to be more conservative in fabric selection, keeping it more neutral in the deep seating and then dressing up the displays with pillows in bright colors," said Cathy Galbreath-Watson, who manages the three locations with her husband, Glen Watson.
Although traffic was down slightly this season, Galbreath-Watson kept her sales staff and advertising at last year's levels.
"A lot of times advertising will be the first thing people cut, but I think that's the kiss of death," she said.
Galbreath-Watson plans to continue her conservative approach for 2010 and is hoping that more manufacturers will be able to offer quick-ship programs to help with inventory control.
"If they can ship in a timely manner, then we wouldn't have to carry as much inventory," she said.
The company was founded in 1965 as Alabama Building Specialties Company. In 1977, John and Catherine Galbreath added outdoor furniture to the mix and renamed the company ABSCO Fireplace & Patio. Thirty years later, in recognition of Catherine's passion for and hard work on behalf of the industry, she was honored with a Lifetime Achievement Award. Catherine continues to work in the family business, while John has retired. Their son, John Galbreath Jr., and his wife Nan manage ABSCO's wholesale hearth division.
Carls Patio, Boca Raton, Fla.
Despite struggling in some of the hardest-hit markets in the country, perennial Apollo nominee Carls Patio stood firm this year when it came to pricing.
"Have we become more flexible than ever before? Absolutely. But we made a conscious decision years ago that the business we do needs to be profitable, especially in times like this," said Gary Ecoff, president. "Buying something for a dollar and selling it for a dollar just doesn't work."
Carls Patio opened in 1993 and now has 16 locations in Florida and Southern California. Originally owned by Carls Furniture, the company completed a leveraged buyout with a private equity company last fall. In the months since, the focus has been on running as lean and efficiently as possible.
"Our new partners forced us from the get-go to dig deep and look at every aspect of the business," Ecoff said. "We've stopped making decisions based on gut instinct and entrepreneurial spirit, and started relying on data. As a result, it has brought the financial end of the business into the 21st century."
Improvements in technology have spurred much of the cost savings by eliminating redundancy. For example, a job that dozens of people were doing across the 16 locations can now be done by four people thanks to a new data system.
"We've managed to cut hundreds of thousands of dollars of organizational expenses" Ecoff said. "Every aspect has been scrubbed."
What hasn't changed is Carls Patio's skill in merchandising and selling lifestyle rather than product.
"We're all fortunate in that this is becoming more of a fashion industry instead of a commodity industry," Ecoff said. "Our special orders are a higher percentage this year than ever before and that's telling me that overall people are interested in making a personalized fashion statement and they understand that it is a long-term investment."
Fishels, Portland, Ore.
Knowing this year would be tougher than last, Fishels' sales staff adopted a mantra of sorts that guided their efforts throughout: How do we get a bigger piece of a smaller pie?
"We knew that beyond having good product and good advertising, we needed to make sure that we were very positive and made this an environment people would feel good shopping in," said Larry Talbot, president. "It couldn't just be a normal retail/customer relationship."
The strategy paid off, helping to keep traffic at a rate similar to past years and eliciting customer comments about the upbeat atmosphere.
"We had several customers mention how dreary it was in stores where people were frowning and how good they felt here seeing the positive attitudes and hearing laughter," Talbot said.
In general, customers trended toward lower price points, with the $5,000 to $10,000 customer shopping at the lower end of the spectrum. Although he didn't cut back on the number of salespeople, Talbot trimmed his advertising overall by dropping local shelter magazine ads, decreasing his newspaper ads and increasing Fishels' exposure on television.
Talbot also decreased his early buy for 2009 by about 30% and anticipates taking a similar approach to 2010.
"It gave us enough inventory for the season, then we concentrated on our best sellers and working with manufacturers that could ship quickly in season," he said, adding that his special orders were up this season.
With two locations, Fishels offers the largest selection of outdoor furniture in the Northwest. The company was founded in 1921 as an awning business. Relaunched as a high-end furnishings company in the 1950s by Martin Fishel, who became the first retail recipient of the industry's Lifetime Achievement Award in 2002, Fishels has been nominated for the Apollo Award several times.
|Clockwise from top left, Paul Parker and Karen Galindo with Paul Galindo and Tracy Wolfrom holding store pets.|
|Teak dining table with crescent benches allows room for elegant entertaining.|
Greenhouse Mall, Austin, Texas
Anyone walking into one of Greenhouse Malls' three locations in south-central Texas is bound to get energized. If the bright colors and wow products don't do it, the upbeat nature of the sales staff will — and that is all according to plan.
"If you can't keep up the energy of your store and your sales staff is depressed, you aren't going to do anything for your customers but send them packing," said Karen Galindo, vice president and secretary of the specialty business, which she manages with her husband, Paul Galindo.
Although the recession didn't hit Texas as fast or as hard as in other parts of the country, Galindo took steps early in the season to prepare for the eventuality including training her staff on how to deal with customers who came in expecting to bargain.
The company also cleaned up its inventory. After identifying all the product that was tying up floor space, warehouse space and inventory dollars, they made a concerted effort to run promotions and clean it out.
"Our inventory is cleaner now than it has ever been," Galindo said. "There is nothing that can drag a retailer down like high or bad inventory."
Cleaning out the inventory allowed the business to run in-season promotions to draw additional traffic as well as to offer sales incentives for the staff, both tactics Galindo plans to continue in the future.
She also plans to cut back on the number of vendors she carries.
"This economy has taught us that we can be a little narrower in our scope," she said, adding there are advantages to a down economy.
"One of them is that it makes us better businesspeople," Galindo said. "When times are good, it's all you can do to keep up with everything. This economy has made us more cognizant of what we need to do as businesspeople to be more profitable."
The specialty dealer has been nominated for the Apollo Award numerous times and won in 2002 in the Single Store category.
Patios Plus, Rancho Mirage, Calif.
Frequent Apollo nominee and winner in the multiple-store category the last two years, Patios Plus concentrated on selling value this season.
"People want to know the difference between buying from us and the big box stores, so we've been spending time explaining how the furniture is made and how it will last," said Jim Schultz, who owns the business with his sister, Kristine Schultz Hutchinson.
Patios Plus opened in 1978 and has two locations — a 10,000-sq.-ft. showroom in Rancho Mirage and a 6,000-sq.-ft. showroom in La Quinto. Traditionally catering to a high-end, seasonal customer base, the retailer brought in new customers this season by offering exceptionally good pricing.
"Like everyone else, we offered great deals this year, so we brought in some new customers who might not have thought they could afford to shop here in the past and who now have been able to upgrade the value of their outdoor furniture," Schultz said.
At the same time, its well-established reputation for good service enabled Patios Plus to maintain its existing customer base as well.
"It's all about the experience," Schultz said. "When people come in, they bond with our very professional salespeople so they come back."
To improve efficiencies, the Schultzes reviewed every line item in their budget to see where they can find cost savings. In some cases, that has been all to the good.
"We pay 100% medical for all of our employees, and we were able to find a new agent and a great new plan that our employees are very excited about," Schultz said. "It is better coverage for about half the cost."
They also renegotiated the lease for the La Quinto store and have cut their sales staff by half.
"It's been a tough year and I anticipate 2010 to be tough as well, so we are being very cautious," Schultz said.
Tiny Girl, Big Dream