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Casper to build stores in Canada

23 April 2018
Mattresses, Retail

TORONTO – E-commerce mattress retailer Casper will open at least two stores here sometime during the first half of 2018, the opening salvo in its plan to build a brick and mortar network in Ontario, Quebec, British Columbia and Alberta over the next 12 months. It also plans to set up a Canadian headquarters and manufacture at least some of its product line in this country.

The New York City-based Casper began selling mattresses online in Canada in late 2014, not long after it began operations south of the border, where it already has 18 stand-alone stores. It also struck a deal last year that will see its product sold at some 1,200 Target department stores across the United States.

In a statement, the privately-held company said its expansion is being driven by what it described as “overwhelming demand” and maintains it has true nationwide coverage with customer support and shipping across all provinces and territories.

In a partnership with Indigo Books & Music, Casper installed sleep-pods in seven of their stores across the country, including this one in Sherway Gardens, where it will also open its first stand-alone Canadian retail store sometime in the next few weeks."We've seen tremendous success in Canada with three years of triple digit growth,” Casper co-founder and chief executive officer Philip Krim said in a statement. “Investing further in the market and expanding our local presence will enable us to bring better sleep to even more Canadians across the country.”

The first of Casper’s Canadian retail shops – which it said are designed to re-imagine the sleep-shopping experience – will open here next month at the Sherway Gardens shopping centre. Shoppers will be able to try Casper’s full product suite in one of four miniature homes, purchase in-store to carry out, or deliver to their doorsteps. The second location is will open later this year somewhere in downtown Toronto.

“Over the past three years, Casper has built a loyal customer base in Canada and we’ve seen the demand to experience our products in-person grow exponentially,” said Nicole Tapscott, senior director and general manager of Casper Canada. “Putting down permanent roots with our fleet of retail stores and a headquarters in Toronto will allow us to engage with customers on a local level, as well as tap into Canada's impressive talent base.”

In all, Casper expects to create 75 jobs in its Canadian operation this year.

It said it is also in discussions with Canadian manufacturers above producing it product assortment but hadn’t selected a partner at press time.

Casper has been building up to this launch for the past year or two.  In March of last year, it unveiled its first retail presence in Canada in a now-ended partnership with the West Elm banner of Williams-Sonoma, where its assortment was offered on a cash-and-carry basis.

In February, it partnered with Indigo Books & Music to house seven shop-in-store ‘nap pods’ across the country. Also, Casper pillows are also offered at some 30 Indigo locations as well as on its web site at indigo.ca.

Casper has said its investors include celebrities such as actors Leonardo DiCaprio, Tobey Maguire, Adam Levine and Ashton Kutcher and that since it was launched in 2014 has garnered total global revenue of about US$600 million. Its Canadian web site can be found at casper.ca.

Article’s new home

23 April 2018
Retail

With estimated sales of US$100 million in 2017 – roughly $130 million at the Bank of Canada’s established annual exchange rate for last year – Article is one of the largest furniture and home décor retailers in Canada. They are also one of the fastest growing. But they don’t have a store and some 90% of their sales are to consumers in the United States. This suggests the privately-held merchant may very well be the largest Canadian e-commerce furniture specialist currently online.

They recently moved into their new 115,000 square foot headquarters in Vancouver’s industrious Strathcona neighbourhood, outgrowing their original 5,000 square foot home as co-founder, managing director and chief executive officer Aamir Baig’s long-term plan to make Article a billion dollar player on the e-commerce scene in North America takes shape.

Break-out spaces throughout Article’s office are outfitted with the company’s products. Featured here are the Haro Vapor Gray sofa, Denman Vapor Gray chair and the Bios coffee table and media unit.Baig, Fraser Hall, Sam Prochazka and his brother Andy Prochazka – all software engineers by training – founded Article after taking a trip to the Arctic in 2011. The site at article.com went live at the end of 2013. Baig recently told Retail Insider, a Canadian blog covering all things retail, the company was shipping an average of 10,000 orders a month in 2017.

Article’s product assortment is focused on the modern, mid-century and Scandinavian style categories. It covers living, dining, bedroom and outdoor furniture, supported by home décor and accessories such as area rugs, lamps and storage pieces.

“Living and dining are our most mature categories,” Aamir Baig related in a question and answer session with Home Goods Online. “However, in the last twelve months we have seen tremendous growth in our new categories: bedroom, outdoor, and décor. Over the next year, you will see substantial expansion of our entire product catalogue.”

It’s sourced from craftsman and manufacturers in Vietnam, China, Indonesia and India with more than 450 SKUs being exclusive to the Article brand.

The entrance to Article’s new headquarters features a large atrium that will be used to showcase rotating product to office visitors.“Our in-house team works directly with the best designers and manufacturers all over the world to build a product catalogue that includes a range of mid-century modern, Scandinavian and West Coast modern designs,” he continued, adding, “We focus on these styles because they work extremely well together, and speak to the tastes and preferences of our target audience. As we double our SKU count, adding and expanding categories, we intend to remain focused on curating a product range of contemporary, modern articles that complement one another and resonate with our customers.”

The one category Article doesn’t currently offer is mattresses. This is deliberate. “We’re in focused on engineering remarkably better furniture experiences, making high-quality furniture accessible,” Baig said. “If we saw an opportunity to deliver significant value in this product category, we would add it to our assortment.”

At the end of 2017, its workforce totalled 150, stationed not only at their Vancouver head office but at their distribution centres in Seattle, Los Angeles and New Jersey. A fourth distribution centre – in Jacksonville, Florida – is expected to be operational in the first quarter of 2018, a year which will see even more names added to the payroll.

Even though they are headquartered in Canada, all of their distribution centres are in the U.S.

“We strategically place our warehouses in port cities to best serve our major markets in Canada and the U.S., always with the goal of increasing efficiency, bringing down delivery times and cost to the customer,” Baig explained “We haven’t opened one in Eastern Canada because to date we’ve been able to efficiently serve customers in that region from our existing warehouse network, delivering 80% of orders in under two weeks and 30% in less than a week last year.”

(Eastern Canada is serviced from its distribution centre in New Jersey.)

The sales mix, he added, between Canada and the U.S. is roughly in line with the population of both countries – suggesting the former accounts for roughly 10% of revenue. “There are differences around peak shopping periods, but people love our product on both sides of the border,” Baig said.

Click here to read the rest of Michael’s report in the HGO Merchandiser…

Embracing change

23 April 2018
Retail

When hearing the name Wicker Emporium, one probably thinks of a spacious showroom filled with wicker and rattan pieces perfect for the backyard or patio. One wouldn’t be wrong to think so – the name is, after all, Wicker Emporium – but it would be remiss to not entertain the notion of stopping by the any of the chain’s 22 stores across Atlantic Canada and Ontario for solid wood pieces as well.

The family-owned and Halifax-based company has also grown over the past few decades by vastly expanding its inventory to suit the consumer’s changing tastes and embracing – not shying away from – the e-commerce boom that’s dominated the second decade of the 21st century.

It’s a success story that begins with an innovative newcomer to Canada who just wanted to carve out a niche for himself after settling in Nova Scotia and now operators 22 brick-and-mortar stores and one online in store that serves the entire Canadian market.

The exterior of one of the Wicker Emporium stores in Halifax, where the retailer was founded in 1972. There are currently some 22 units across Atlantic Canada and Ontario.“My dad started the company in 1972. At that time, wicker was in fashion but hard to come by in eastern Canada,” says Raj Kapahi, second generation president of Wicker Emporium. “He emigrated from India in 1967 and he had no intention of starting a business. He was teaching in a junior high school and he wanted to travel back to Asia, so he saw a gap in the market.”

The beginning
Madan Kapahi, Raj’s father and company founder, worked a number of trades before launching his long-standing furniture venture.  “I was hired to work with a lawyer in Vancouver, but I wanted to see more of Canada, so I took a train to see Expo 67 and then went to Halifax,” the senior Kapahi recalls. “It was a nice place, so I thought I would stay. I met my wife there and we started a store and it worked well to start with. I started a deli and a flower business, also a seafood business.”

But, the best part of starting a wicker furniture company, he says, was the opportunity to travel home.

“The wicker furniture took me back to India. It’s still a good business, we enjoy every minute of it. We use wood from old crates and old houses. It’s quite popular with people who prefer guilt-free shopping. They want to know we’re not cutting down too many trees,” he says.

While wicker was – and still is, to a certain extent – the banner’s defining product, the Kapahi family was never afraid to mix things up. “We evolved and changed depending on what the market was looking for,” says Raj Kapahi.  “We sold ceramics, glass, dinnerware, home textiles. We got into wrought iron furniture in the 90s, while always maintaining some amount of rattan. Starting in 2001, we were bringing in solid wood furniture, some from Indonesia. Over the years, we found that wood furniture was what the market really wanted, and it fit our DNA of being natural.”

The company has also made sustainable wood part of its identity.

Madan Kapahi, Raj’s father, is the company’s father and chief executive officer. He was a new immigrant to Canada from India when he founded Wicker Emporium in 1972 and is still active in the business."We’re also working with WeForest, we have commitment to plant trees in India. Wood is in our DNA, we want to plant trees and participate in reforestation,” says Kapahi the younger. WeForest is a non-government organisation based in France dedicated to leading reforestation projects in several parts of the world including South America, Africa and India.

As far as products go, the company’s entire product assortment is sourced from India, China, Indonesia and Vietnam and focuses on cabinets, shelving, case goods, seating and tables. They also sell sofas.

At a time when the consumer is more fashion conscious – not to mention fashion aware – than ever before, the seamless move to a timeless and stylish imported product made sense. “We’ve transitioned the brand to be more focused on rustic, solid wood,” Kapahi says, adding accessories have become a less significant part of their product assortment.

Their selection of wood furniture is also relatively vast, with pieces made of Acacia, shisha and mango wood from India and solid thick wood from Indonesia. Wicker Emporium also offers reclaimed pine wood furniture from Vietnam.

“It’s durable, fashionable furniture constructed from solid wood. It’s more of a casual, rustic sort of look,” says Kapahi.

Click here to read the rest of Ashley’s profile in the HGO Merchandiser…

BMTC revenue up 1%

23 April 2018
By the Numbers, Retail

MONTREAL – BMTC Group has reported increased sales and earnings for its elongated fiscal year that ended on 31 January 2018 although it noted net earnings for the first month of the year had no impact on profit performance and strict comparisons revealed a slight decrease in revenue and same store sales.

The company – Quebec’s largest furniture, mattress, appliance and consumer electronics retailer—announced this past December it was shifting its fiscal year end from 31 December to 31 January “for operational and administrative efficiency.” Every other public company in the industry has fiscal year consistent with the calendar year.

For the four month period ending 31 January 2018, revenues were $245.1 million, compared to $197.1 million for the three-month period ending 31 December 2016.

The Brault & Martineau store in the Montreal suburb of Laval.However, the company noted for the strictly comparable periods, revenue declined 1% as did same store sales.

Net earnings for the four month period were $17.7 million or 50 cents per common share. For the same period of the prior fiscal year, net earnings were $17.7 million or 47 cents per common share. “The contribution to net earnings for the month of January 2018 was $167,000, which had no impact on net earnings per share,” the company noted in its statement to shareholders.

The bump in earnings per share is likely due to the company’s ‘normal course issuer bid’ under which it repurchased for cancellation 1.74 million shares through the Toronto Stock Exchange (TSX). There are now approximately 35.1 million shares issued and outstanding.

For the 13-month fiscal year ending 31 January 2018, BMTC had revenues of $810.1 million, compared to revenues of $746.6 million for the 12-month fiscal year ending 31 December 2016.

The company said for the strictly comparable periods, both revenue and same store sales climbed 1%.

Net earnings for 13 months were $49.3 million or $1.36 per common share, compared to net earnings of $43.8 million or $1.17 per share for the prior 12-month fiscal year.

Moving forward, the BMTC’s fiscal quarters will end on 30 April, 31 July and 31 October.

In its report to shareholders, BMTC said the implementation of distinct e-commerce platforms for the Brault & Martineau and EconoMax banners is now operational. It is continuing to standardise its IT systems across of its banner to ensure they are aligned with its e-commerce strategies.

It has also concluded the purchase of a parcel of land at the junction of Highway 15 and Route 117 for the construction of the new 80,000 square foot prototype store that will replace its store in the Montreal suburb of Ste-Thérèse.  It is scheduled to open in January 2019.

After closing its store in Repentigny this past November, BMTC sold it for an after-tax gain of $4.5 million in February 2018.

It also closed its last two remaining Sleep Gallery stores – in St-Jérôme and the Mascouche – on 31 January but will continue to operate Sleep Gallery store-in-store boutiques located in its Brault & Martineau mega stores.

Yves Des Groseillers, BMTC’s long serving chairman, president and chief executive officer, noted the Quebec economy experienced its highest rate of growth since the last recession in 2008 last year, with consumer spending increased by about 6.2% across the board during the first half of the year.

While unemployment is at a historic low in Quebec, disposable income doesn’t seem improving – which is causing Des Groseillers some concern, citing a recent survey which revealed 34% of Quebeckers “live from one pay cheque to the other, mainly due to the increase of their debt burden.

“The continuing trend of interest rate increases in 2018 would certainly further undermine this situation and would, therefore, have a negative impact on consumer spending,” he added.

“The retail sector is in complete transformation,” he continued, noting the emergence of e-commerce and the focus on ‘the shopping experience’ are the driving factors behind it.

Des Groseillers also noted a recent study which claimed 10% of all Quebec residents spend an average of $281 a month online.

“The company is confident its market position – thanks to the different banners, the innovation of its brick and mortar stores and the major investments towards IT systems and e-commerce – will permit it to respond to the changing reality of the retail sector and allow it to maintain its leading market share,” he told shareholders.

In addition to Brault & Martineau and EconoMax, BMTC also operates a third banner, Ameublements Tanguay in the Quebec City region of the province.

Related Story: BMTC changes fiscal year


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