Article ranks first on Growth 500
VANCOUVER – Article, the online furniture and home décor merchant based here was ranked at the number one position on the 2018 Business Growth list published by Canadian Business. The 30th annual edition ranks this country’s fastest-growing companies by five-year revenue growth. Article topped the 2018 with 56,581% revenue growth since 2012.
“The companies on the 2018 Growth 500 are truly remarkable. Demonstrating foresight, innovation and smart management, their stories serve as a primer for how to build a successful entrepreneurial business today,” Deborah Aarts, program manager said in a statement. “As we celebrate 30 years of the Canada’s fastest-growing companies program, it’s encouraging to see that entrepreneurship is healthier than ever in this country.”
“Article is honoured to be on the Growth 500 ranking,” Article co-founder and chief executive officer Aamir Baig added. “My co-founders and I started Article with the intention of making an impact in people’s lives. This achievement reinforces the team’s dedication to improve the furniture shopping experience and build a lasting retail brand.”
The Article approach is to remove what it believes to be the inefficiencies of traditional furniture retailing in order to offer high quality products at significantly lower prices without a single showroom. Baig said the company, which employs more than 230 across North America, has been profitable since 2015 and although sales have never been published, its revenue is believed to be approximately US$130 million.
This year, the furniture e-tailer expanded its combined warehouse capacity to more than 900,000 square feet to accommodate its growth. Baig also noted that since it went online in 2013, it has delivered more than 200,000 orders to customers across the U.S. and Canada.
It should be noted that Article’s most direct competitor – the Boston-based and publicly-held online home furnishings merchant Wayfair – has never declared a quarterly profit and Baig maintains having a bottom line is critical to the company.
“It’s important the business is a profit capable business engine, otherwise we won’t be a sustainable entity,” he told Home Goods Online. “Being able to generate profit allows us to avoid outside financing, which has its own timelines and growth expectations. In our context, it’s important Article is profitable to allow us the freedom to make decisions that improve the furniture buying experience on our terms.”
The typical Canadian furniture retailer generates an after-tax profit of between 4% and 5% of sales. For Leon’s Furniture Limited (LFL) – this country’s largest full-line furniture retailer – it’s usually about 4.5% of sales while for BMTC Group it averages 5.6% of sales. Baig didn’t reveal Article’s ratio.
“As a private company, we would prefer not to disclose those numbers,” he said. “What I can say is our business model is different than competitors who follow the traditional retail model and also offer e-commerce.”
But he was quick to add turning a profit is critically important to the company. “In any business, there is never 100% assurance a company will be profitable at the end of year,” Baig said. “Our team is focused on running Article on sound judgement and prudent financial discipline. We strive to deliver on our brand promise in order to drive repeat customers and a healthy referral rate. While a simple strategy, we're a viable (and profitable) business because of it.”
Article is also positioning itself for growth. Baig notes furniture is a $200 billion industry across Canada and the U.S. “We have plenty of opportunity to extend our brand experience, expand our catalogue range and improve the shipping and delivery experience. We have ambitious plans to take more market share by making a difference in our customers’ lives,” he said.
Moving forward, the company’s immediate priority is to improve the furniture shopping experience, which includes evolving the catalogue, product excellence and speed of delivery.
“Speed of delivery is a key element in a remarkably better experience and is an area we will continue to invest in,” Baig said. “Our team will also work to improve discovery and brand resonance through marketing to increase awareness. Each of our priorities contributes to building and retaining brand trust. In an era where brand reputations are made and dismantled online, we want to make sure our brand is trusted as we execute our growth plans. We will continue to make customer centric, data-driven decisions for the benefit of our customer to build an enduring brand.”
Article’s ranking on the Growth 500 list follows other entrepreneurship award wins including Startup Canada’s 2018 high-growth entrepreneurship award for the B.C. region and Ernst and Young’s 2017 Entrepreneur of the Year award in the emerging technology category.
To find out more about the Growth 500 list, check out its web site at www.canadianbusiness.com/growth