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New team at Huppé

27 February 2023
Furniture, Manufacturing

VICTORIAVILLE, Quebec – A new ownership and senior management team has taken the reins at Huppé Furniture based here, following a recent decision by company president and chief executive officer Jean-François Nolin to sell his stake in the contemporary case goods specialist.

Nolin, who has owned and led the company since 2010, said in a statement having grown the small manufacturer’s brand awareness and sales he has come to the end of his journey in the furniture industry and wants to work on new projects.

“I have reached my goals and brought Huppé to the level I wanted it to be,” he said, adding, “I’m very proud and grateful for the work accomplished by the team, we have built a world class company with a distinctive brand. Now, I feel like devoting myself to other projects, both personal and professional!”

Jean-François Nolin (second from left) has sold his stake in contemporary furniture maker Huppé to a team consisting of Antoine Cantin, Joël Dupras and Julie St-Arnaud.The new ownership and senior management team will include Huppé’s long-time design director Joël Dupras – who has been a shareholder since 2016 – as well as Julie St-Arnaud and Antoine Cantin, formerly a commercial banking manager with the National Bank of Canada.

Dupras has more than 20 years of experience in furniture design. He began his career with the family business Visu before founding Joël Dupras Designer (JDD) in 2008. Among his clients were the Quebec-based institutional and hospitality furniture specialist Foliot and Wet Style, the bathroom furniture maker for whom he won the Best of Year (BOYA) award from Interior Design magazine in 2009 for the M collection.

He is now recognized as one of North America’s best contemporary furniture designers. He joined the Huppé team in 2011 as head of the design department and is the bridge between the development of new collections and the production.

(Nolin partners with Dupras and two others in the Sir John Brewing Co., a micro-brewery located in Lachute, Quebec.)

The move also marks St-Arnaud’s return to the company, having served as director of marketing from 2011 to 2015. Since leaving, she held several sales and marketing leadership positions across several industries. In 2018, she launched her marketing agency, allowing her to assist multiple companies with their business strategies.

Cantin has over 20 years of experience as an investment banker. Nolin believes he will be a distinct asset to the company with his extensive experience in finance and leadership.

“I chose to sell to Joël, Julie and Antoine because, in addition to complementing each other perfectly with their expertise, I know that they will continue the ‘Huppé vibe’ with our existing team as well as with our clients and partners,” Nolin said.

“They share the company's values and understand the dynamics of the market and our clientele. They are complementary and will ensure the company’s success over the years,” he continued, adding, “Moreover, Huppé will remain in Victoriaville and will continue to contribute to the economic development of the region.”

St-Arnaud and Cantin are expected to join the company at the end of February.

For the past several years, Nolin has served as member of the board of directors for the Quebec Furniture Manufacturers Association (QFMA). He told Home Goods Online he will be resigning from that volunteer position in the very near future.

“I’m really happy with the transaction,” he added. “It will be a smooth one with people who are already involved in the business. I will continue to support the business and help with the transition for a least a year or so. I’m also owner of a great microbrewery that will need my knowledge and experience over the next while.”

Founded in 1967, Huppé currently employs some 75 people at its 72,000 square foot production facility here and has a retail network of approximately 250 stores across North America. The company also shows at the High Point Market and has a showroom in 220 Elm (Space 333).

Related Story: Huppé teams with Italdivani to launch upholstery line

Tepperman’s kicks-off 98

27 February 2023

WINDSOR, Ontario –Tepperman’s, one of this country’s largest independent full-line furniture retailers is marking 98 years in business as it has for the past several years, publishing a new catalogue designed to excite their customers while girding for what third-generation president Andrew Tepperman describes what could be a year of “uncertainty and volatility” as the economy comes down from its pandemic high.

“I do not take these 98 years for granted. Every March anniversary is emotional for me as it’s a time to pause and reflect,” Tepperman said. “The anniversary makes me think about my grandfather who started in 1925 with nothing, going door-to-door on foot selling rugs. It also makes me think about my father being thrust into taking over the business at 36 years of age when his father unexpectedly passed away. Most importantly, our anniversary makes me think about people.”

Tepperman knows being part of a local family business is special, and credits the brand’s decades of success to the thousands of past and present team members who built relationships with millions of loyal customers.

“Making it to 98 years is not by luck. Every day each one of us tries to do what we do a little better than yesterday,” he said. “What we do is not unique, but how we do it is – like prioritizing sustainability and community investments. Last year we donated 12 tonnes of furniture to Habitat for Humanity, recycled 101 tonnes of used mattresses and added our first solar installation. We also offer unparalleled service with our white glove delivery, flexible 0% interest financing and our free consultations with accredited interior decorators.”

Tepperman’s logos through the years since its founding in 1925.

Tepperman’s 98th Anniversary Sale is a five-week celebration in honour of nearly 10 decades in business and is the retailer’s premier promotional event of the year. To mark the occasion, Tepperman’s mails a 32-page catalogue to homes in Windsor, Chatham, Sarnia, London, Kitchener-Waterloo and Ancaster/Hamilton. One lucky customer will also win a $1,000 gift via the Spring Refresh giveaway detailed on page 32.

“For this year’s Anniversary Sale, our buyers truly outdid themselves in their hunt for exceptional deals. We have such incredible value to share that we filled a beautiful catalogue to the brim with affordable, on-trend styles,” said Tepperman. “Customers looking to elevate their homes while staying on budget will find deals in every department: furniture, mattresses, appliances and electronics.”

Tepperman, who succeeded his father – Bill – as president of the six-store chain in 2006, told Home Goods Online the retailer saw an uptick in revenue in 2022 but has noticed a softening as 2023 begins.

“2022 was a year of getting back to normal,” is how he categorized the year, which included, “Stabilizing our inventory and partnering with new suppliers. Ramping up market testing. Investing in every form of technology. Returning to consistent employee training and never forgetting about our communities and the environment.”

Andrew Tepperman.He noted Tepperman’s first solar installation – at its Kitchener, Ontario location – will produce more than enough electricity to run the store and will actually put energy back into the grid.

He is concerned about the coming year. “I do know that the combination of sustained high interest rates plus high inflation is a recipe for disaster,” he pointed out. “No one is immune.”

Tepperman also expressed amazement as to how quickly the economy is turning, noting the difference in the reporting of public companies in the third quarter of 2022 versus what they were saying in the fourth quarter.

“Most are reporting lower sales and margins and higher inventory levels through December 31, 2022,” he said, adding, “I believe we will see even more financial statement erosion in their first quarter 2023 statements. While no retailer welcomes a recession, we’ve been through these before.

“Consumer behavior generally follows a pattern,” he continues. “Some will stop buying, while others will substitute for less expensive products or buy less frequently. The way we buy, market and finance will always fluctuate based on the environment to meet the consumer where they are.”

Tepperman’s is one of the last retailers in North America offering in-house credit and to prepare for a down-turn, they’re investing in their consumer financing capacity to ensure they can meet the consumer’s needs.

“We also look closely at the expense side,” Tepperman said. “Were we all concerned about every wasted dollar during the COVID period surge? Probably not.  As the economy shifts, we must by hyper-focused on maximizing every revenue dollar and be vigilant with expense control.  We also adjust capital expenditures to ensure we’re never over-leveraged.  Fortunately, we have a lot of experience on hand who worked through 2008-2009. We learned a lot.”

That experience will see Tepperman’s through to their 99th anniversary a year from now. 

Related Story: Tepperman’s debuts Drew & Jonathan in holiday catalogue

Related Story: Tepperman’s powering Kitchener store with sunlight from the roof

Related Story: Tepperman to fund scholarships for Indigenous Peoples

LFL sales flat for 2022

25 February 2023
By the Numbers, Retail

TORONTO – Leon’s Furniture Limited (LFL) remains this country’s largest full-full line furniture retailer despite a sag in fourth quarter revenue coupled with a somewhat bigger drop in net income and earnings per share. Full year results were essentially flat when compared to 2021 but were still considerably higher than in pre-pandemic 2019.

The parent of Leon’s, Appliance Canada and The Brick said system-wide sales for the three months ending December 31, 2022, were $804.4 million, off 2.0% from the $820.5 million for same period of 2021.

Corporate stores sales were $661.2 million, down 1.3% from $669.8 million as same store sales fell 1.0%. E-commerce sales were estimated at 9% of revenue – roughly $59.5 million. That’s half of the estimated $129.3 million those platforms generated during the fourth quarter of 2021.

Leon’s Furniture Limited five-year financial performance.“The current quarter compares favorably to the company’s historical results before the COVID pandemic began in the early part of the 2020 fiscal year,” management reported to shareholders. “The company is continuing to show increases across all product categories for the three months ended December 31, 2022, when compared to pre-pandemic results.”

They noted sales were 6.4% higher than those achieved in the fourth quarter of pre-pandemic 2019.

Meanwhile, sales by the retailer’s 102-unit franchise network totalled $143.2 million, down 5.0% from the prior year’s $150.7 million.

Net income for the fourth quarter of 2022 was $43.2 million or 65 cents per diluted share as compared to $56.5 million or 73 cents per diluted share – an 11.0% decline on a per diluted share basis.

For the full year ending December 31, 2022, LFL system-wide sales were $3.05 billion, off a very slight 0.2% from the previous year’s $3.06 billion. However, they were 11.9% higher than the pre-pandemic year of 2019.

Based on the latest data from Statistics Canada, this gave Leon’s Furniture Limited a market share of 21.3% last year, down slightly from the prior year’s 22%.

Corporate store sales tallied $2.52 billion, up a very modest 0.2% from $2.51 billion the year before as same store sales were essentially flat. Management attributed the roughly $10 million uptick in sales to strong performance in the mattress category.

E-commerce accounted for $245 million – or 9.7% of total revenue. While still higher than before the pandemic’s onset in 2020, it’s a 60% drop from the estimated $603 million in digital sales in 2021 and seen as a sign consumers really do prefer buying furniture, mattresses, appliances and electronics in-store.

Franchise network sales were $535.3 million for the year, a 1.8% slide from 2021’s $544.9 million.

Net income for the year was $179.4 million or $2.64 per diluted share compared to $207.2 million or $2.62 per diluted share – an 0.8% advance on a per share basis.

It should be noted there were almost 14% fewer issued and outstanding shares in the company at the end of 2022 compared to the prior year. LFL spent $200 million during the fourth quarter of 2021 buying back some eight million shares which it cancelled in January 2022.

“During 2022, our LFL team continued to execute in a progressively more challenging macro and customer environment,” LFL president and chief executive officer Mike Walsh said in his report to shareholders. “For the year, we generated $3.1 billion in total system-wide sales and $2.60 in adjusted diluted earnings per share, both similar to the record results of 2021, which benefitted from COVID-related spending growth primarily focused on the home.”

Mike WalshEffective use of promotions enabled the company to reduce inventory by approximately $91 million during the fourth quarter, putting it in a stronger position to face whatever winds of change it  faces in 2023.

“Our company was built upon environments like this. With dominant national scale, coast -to-coast integration, Canada’s most recognized retail banners and related online properties, our team has all the tools at its disposal to continue generating growth and profitability for shareholders,” Walsh continued, adding, “We see plenty of opportunity to leverage our scale into additional revenue. Our recent agreement with Resident, the largest direct-to-consumer mattress company in North America, to offer Nectar and DreamCloud mattresses both online and in-store at Leon's and The Brick, is one example of this.

“For 2023, we will remain focused on growing the top line in the context of the market, maintaining gross margins within a reasonable range and executing on our multi-year efficiency program to drive profitability. We believe we are entering 2023 on solid footing, positioned to gain share as retail sales in general continue to disproportionately feel pressure in the current market environment.”

At the end of 2022, LFL operated 304 stores – including 102 franchises - across five banners including Leon’s, Appliance Canada, The Brick, The Brick Mattress Store and Brick Outlet.

BBB to shut Canadian stores

25 February 2023
By the Numbers, Retail

TORONTO – As part of its strategy to stave off bankruptcy and liquidation in the United States, Bed Bath & Beyond will exit the Canadian market over the coming weeks after seeking protection under the Companies Creditors Arrangement Act (CCAA) for its 65 stores north of the border.

The Ontario Superior Court was told in the Bed Bath & Beyond Canada (BBB Canada) insolvency filing it lacks the ability to recapitalize and restructure without its Union, New Jersey-based parent company and its lenders.

“The Bed Bath & Beyond Group, including BBB Canada has been in financial difficulty for the past several years, reporting significant net losses since 2018,” the filing says, noting Bed Bath & Beyond operates 54 Bed Bath & Beyond locations and 11 buybuy Baby stores in Canada, which will now be closed.

Bed Bath & Beyond will exit the Canadian market and shut the 65 stores in operates over the coming weeks. It recently placed its Canadian division in creditor protection under the CCAA.In fact, the BBB Canada web site offers nothing other than a thank you to its customers while inviting them to visit their nearest store to shop its final clearance sale.

The filing also noted the parent company did retain the investment banking firm of Lazard & Frères to find a buyer or financing solution for the Canadian division, adding “multiple outreaches to third parties have not resulted in an executable transaction.”

BBB Canada reported Canadian assets of $427 million and total liabilities of $342 million. The parent company’s newly appointed chief financial officer told the court BBB Canada hasn’t been profitable in several years. Sales for its latest fiscal year were $553.6 million, up slightly from the previous year’s $542.7 million. It also reported negative EBITDA (earnings before interest, taxes, depreciation and amortization) $28.9 million and $25.1 million respectively.

For the third quarter of its current fiscal year, which ended November 26, 2022, BBB Canada has a net loss of $87.6 million with a negative EBITDA of $81.8 million.

For the past several years, BBB Canada has been ranked as one of the largest home furnishings store chains in Canada as well as one of this country’s largest retailers. In its report on the Top 100 Retailers in Canada for 2020, the Centre for the Study of Commercial Activities (CSCA) at what is now called Toronto Metropolitan University, ranked it at number 57 on its list of retail conglomerates and number 82 on its list of retail chains.

Alvarez & Marsal Canada, a management consulting firm based here, has been named the court appointed monitor.

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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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