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The Sears opportunity

23 October 2017

VANCOUVER – The impending exit of Sears Canada represents an once-in-a-lifetime opportunity for independent furniture, mattress and appliance retailers to not only grow their top and bottom lines, but win a new crop of loyal customers in the process. That’s the message members of Mega Group were brought by Dan Weare, a retired group executive who spent a large portion of his career working for troubled department store chain.

In fact, he believes they may be better positioned to reap the windfall than their competitors among the national chains. There is a catch, however. “You have to know who the customer is and what her expectations are,” Weare told group members at their recent annual convention here.

Dan WeareUntil early this past summer, Weare was a senior furniture merchandising manager for the Saskatoon-based Mega Group where he worked most closely with the members of its Evolution Group, which is made up of mostly larger independents who aren’t members of its BrandSource banner. However, he spent much of his career at Sears where he helped developed the Sears Home initiative. He was also involved in the acquisition of what was then Cantrex Group – now Cantrex Nationwide – and was a senior member of its furniture merchandising group for several years.

In an interview with Home Goods Online, Weare admitted he was sorry to see the department store chain disappear, echoing many of the sentiments made by other current and former Sears Canada employees. He also has his own take on what went wrong. “It was caused by not paying attention to the customer and learnings what she wanted,” he said.

Most people in the industry know Sears Canada has remained a significant power in big ticket home despite its troubles in recent years. Indeed, the company is one of the largest furniture, mattress and major appliance merchants in the country. Last year alone, sales in these categories were valued at over $1 billion. That business will eventually find its way to other retailers, but experts don’t think it will happen overnight. The transition could take two or three years.

Weare points out Sears Canada had a target customer: a woman between the ages of 45 and 64 who owned her home and was part of a two income family earning between $100,000 and $120,000 annually. She is a regional newspaper reader, a fan of Top 40 music and listens to talk radio – in fact; she consumes more radio than any other media.

What’s more, this customer respects brands – even private labels if presented properly.

For the independent furniture, mattress and major appliance retailer appealing to this customer shouldn’t be difficult, but Weare maintains some things must be done differently. “There has to be a logical trade-up structure on the floor,” he says, adding it has to be more detailed than the ‘good, better, best’ scenario used by most independent stores. “There have to be a least five steps on that ladder.”

She expects a logical assortment plan in every category and it every department of the store. She is also expecting competitive pricing and to be offered an extended warranty or maintenance agreement with her purchase.

Furthermore, the independent has to be keenly aware of the trends and know how to mix them. “And you have to be very careful you are not buying just what you like for the floor,” Weare advises. Furthermore, retailers mustn’t leave gaps in their assortments.

He also notes the traditional Sears customer isn’t afraid to use credit, noting there was a time when the Sears card represented between 60% and 70% of sales and was the single largest contributor to its annual earnings. In fact, she expects credit as part of the retailer’s total service plan.

Follow-up is also expected by the traditional Sears customer. To keep her loyal, the independent has to do the same, Weare says.

According to a recent report, some 5,000 new dollar stores are expected to open throughout North America over the coming three years. For Weare this is a signal that brick and mortar retail is still alive and kicking. “There are shoppers everywhere,” he says. “You just have to be adaptable.”

Putting manufacturers first

23 October 2017
Furniture, Manufacturing

MONTREAL – For the past 45 years, the Quebec Furniture Manufacturers Association (QFMA) or, more properly, L’Association des fabricants de meubles du Québec (AFMQ) has been associated primarily by many throughout the industry with one single annual event – what is now called the Canadian Furniture Show (CFS). While many industry stakeholders outside the organisation probably view operating Canada’s only national furniture industry event as its most important task, they may be surprised to learn its senior management team doesn’t share that point of view.

According to Pierre Richard, president and chief executive officer of both QFMA and CFS, the association’s most important work is advocacy for and promotion of the interests of furniture makers in Quebec. What many may not realise is the QFMA is only non-profit industry association left in North America whose focus is on the furniture manufacturing both for the retail/residential as well as contract, commercial and hospitality markets.

For a wide variety of reasons, most other furniture industry groups across North America have broadened their mandates and began admitting more than manufacturers into their ranks – most notably importer/distributors, suppliers of other kinds and in some cases, buying groups and retailers.

Pierre RichardFor example, the American Furniture Manufacturers Association became the American Home Furnishings Alliance (AHFA) in 2004. Indeed, Richard Magnussen, chief executive officer of the New Hamburg, Ontario-based Magnussen Home is serving as its chairman of the board for 2017. He is the first Canadian to hold the post.

Similarly in late 2007, the Ontario Furniture Manufacturers Association evolved into the Canadian Home Furnishings Alliance (CHFA). Shortly thereafter, it merged with Furniture West, the Winnipeg-based factory group and the national umbrella group – the Canadian Council of Furniture Manufacturers – ceased operations.

Many of these changes took place against a background of economic upheaval that, in turn, prompted furniture manufacturers to shift from Canada and the United States to places such as Indonesia, Vietnam and the People’s Republic of China.

These organisations undoubtedly do a lot of good, but theirs is not a path the QFMA will take as the Montreal-based group celebrates the 75th anniversary of its founding.

Indeed, the QFMA is growing its membership. At least 25 companies have joined the association so far this year. Of its 145 members, at least 100 are furniture manufacturers. These companies range in size from three to as many as 200 or more employees. On the residential side, membership includes firms such as Ébéniste Jean-Guy Morin, a cabinetmaker in St-Sylvère to more familiar names such as the Victoriaville-headquartered case goods producer Huppè, motion upholstery house Elran and specialty mattress maker Zedbed. On the contract side, membership includes several well-known systems furniture producers such as Lacasse, Artopex and Teknion.

Association membership is divided into three categories: regular members – these are furniture manufacturers of both residential and contract, commercial or institutional furniture; affiliate members – companies manufacture and assemble furniture-related products such or components, lamps and decorative accessories; and, associate members – firms offering products or services to the furniture industry (including hardware, finishing products, financial services, etc.)

It should be noted Home Goods Online an associate member of the association.

Since taking over as CEO in October 2013, Pierre Richard and his senior management team have been rebuilding the association with an eye to making it a valued resource to the membership and becoming a trusted touchpoint between the industry and both levels of government, the press and even the consumer to a smaller extent.

Back in late spring of 2014, Richard told HGO that rebuilding the association would have its own set of complexities – the first being to have both members and non-members alike determine what role the association should be playing the in day-to-day life of the furniture industry in Quebec. The initial results weren’t that encouraging. “The level of satisfaction is generally low,” Richard said at the time. “Non-members don’t know us and many of our members don’t really understand all of the benefits of being a member.”

Click here to read the rest of Michael’s report on the QFMA’s 75th anniversary celebrations…

Meet Ruth Parkinson

Ruth Parkinson, a sales associate for the Toronto-based Executive Furniture Rentals is the 2017 Retail Sales Professional Award winner for Ontario.
23 October 2017
People, Retail

When Ruth Parkinson, a sales associate working for the North York, Ontario-based Executive Furniture Rentals, learned she would be receiving an important honour for her work as an accomplished retail salesperson, she had two thoughts: she was honoured and worried about having to dress up.

“It was really exciting,” Parkinson recalls during a recent interview with Home Goods Online. “At first I thought, ‘do I have to dress up?’ But it was absolutely stunning. It was just great.”

Parkinson was one of four career retail sales people selected to receive the industry’s first annual Retail Sales Professional Awards – an award program sponsored by Zucora, supported by a group of other industry insiders, including Home Goods Online, the Canadian Home Furnishings Alliance (CHFA) and the Canadian Furniture Show (CFS). The award recognises the outstanding achievements and accomplishments of experienced sales professionals who are seen as leaders when it comes to delivering exceptional customer sales and service for furniture, mattress and major appliance retailers across the country.

Since the award isn’t an easy one to win – salespeople across Canada were nominated for the honour by their managers or peers – locking one down is impressive and very worthy of celebration. Parkinson was selected as the regional RSPA winner for Ontario.

“I knew nothing about it,” Parkinson says. “My boss came to me and he said someone wanted to talk to me. I was with a client, but he said to pick up the phone for some good news. They told me I’d been nominated and won. I was like, ‘I won what?’ It was just really exciting, when you’ve been at your job for so many years, it’ good to be recognized.”

Parkinson’s job is decidedly unique, as she rents furniture to people and companies who need it for everything from temporary homes to special events. The company even provides furniture for the popular HGTV TV show Property Brothers. While few people think about rented furniture – even though it’s necessary for traveling athletes and celebrities as well as companies looking for desks and chairs for summer staff – it’s a thriving niche business.

“I’ve been at Executive Furniture Rentals for exactly 25 years (and the company has been around for a whopping 66 years) and I’ve been in the industry for 35,” says Parkinson.

Interestingly enough, she was working for a family company when Mark Miller, the owner of Executive, said she would work for him one day.

“When the recession hit, Mark approached me,” she says. “And now I’m still here.”

As for why Miller chose to nominate Parkinson, the decision was an easy one. Parkinson has over 20 years’ experience servicing clients and creating complete home packages on a temporary basis. On average, her home packages are created within 48 hours and promptly delivered – an astounding turnaround time.

Click here to read the rest of Ashley’s profile of Ruth Parkinson, the 2017 RSP Award winner for Ontario in the Fall edition of the HGO Merchandiser

Mega salutes vendor excellence

Carl Mastrovito, key account manager for Tempur-Pedic (left) receives the 2016 Supplier Recognition Award for bedding from Mega Group CEO Benoit Simard.
23 October 2017
Events, Retail

VANCOUVER – Mega Group recognised five of its vendor partners for excellence in product and service at its recently ended annual member conference here.

"This provides us with an opportunity to recognise those suppliers who excel at their job," Michael Vancura, the group’s executive vice president of retail operations, explained to the approximately 300 or so industry professionals – including about 80 members, vendors partners and others – who attended the two-day gathering at the Fairmont Hotel here.

This was the 11th year in which the awards were presented.

The process resulting in the presentation of the Supplier Recognition Award begins with an electronic survey of over 300 Mega Group shareholders and affiliated retailers across the country, as well as an evaluation by the group’s credit department at their head office in Saskatoon.

Respondents are asked to rate suppliers on quality and service areas that directly impact their businesses, including: accuracy of invoicing; responsiveness of the vendor’s customer service operation; the quality of training and support; point-of-purchase materials; gross margin; debit and credit note processing; and, how well the supplier uses the group's central billing service.

This year’s survey – which covered the 2016 calendar year – covered five product categories: appliances, bedding, upholstery, case goods, and service.

The award in the bedding category went to the Tempur-Pedic division of mattress manufacturer Tempur Sealy Canada. Last year, the award went to the company’s Sealy division.

Winning in the service category was Phoenix AMD International, the Bowmanville, Ontario-based provider of added-value goods and services including extended warranties, mattress protectors, furniture kits and laundry soap, among others. This was the tenth time Phoenix earned the distinction over its ten-year run.

Taking the distinction in the upholstery category was Elran Furniture, the Montreal-based producer of both stationary and leather seating products. The company last won the distinction two years ago as well as in 2012, 2009, 2008 and 2006.

Recognised in the case goods category was Ashley Furniture. The Arcadia, Wisconsin-based manufacturer previously won the distinction in this category in both 2012 and 2014 although last year it won in the upholstery category.

Taking kudos in the appliance category for the third consecutive year was Whirlpool Canada, which also won the award in 2008.

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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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