When the housing crisis was at its peak and the recession was constricting wallets, people weren’t exactly jumping at the chance to spend hundreds of dollars on a new living room chair, much less thousands on a dining room set.
Havertys, the Atlanta furniture seller, responded to the drop-off in spending by advertising its more budget-friendly pieces. But all the while, the 127-year-old company was reconsidering how it might set itself apart when shoppers were again in the market for settees and couches.
The company is spending $24.5 million over five years to revamp its stores. It has a new advertising campaign. And it is focusing on adding more customizable furniture, so shoppers can make their own pieces.
“We’ve just now started advertising our better product,” said Clarence Smith, Havertys’ president, chairman and CEO. “We want to make sure people think of us as a better furniture store.”
The company is seeing “real traction” with its efforts, particularly its customizable offerings, Smith said. Shoppers, depending on what they want to spend, can change the fabric on a chair or can decide on different design elements for the legs of a new couch.
The special order sales, which often cost more than items purchased as-made, are gaining momentum and impacting Havertys’ bottom line, Raymond James analyst Budd Bugatch said in a July research note.
“The company continues to expand its higher quality offering, including its special order merchandise,” he said. “The results continue to show customers are willing to spend more for the better goods at Havertys. This is encouraging as the company appears to be returning to a merchandise stance closer to its roots after several years of trading down.”
The shift was not a quick one, said Richard Gallagher, Havertys’ senior vice president of merchandising. But as people began to resume spending on furniture, Havertys was able to recognize the change and react to it by expanding its options. In the second quarter, Havertys’ sales were up 5.9 percent.
The focus on custom pieces is likely to continue to increase sales at Havertys, said Randy Stuart, an assistant marketing professor at Kennesaw State University.
“I don’t have to have the same sofa you have,” she said. “I think that’s very smart.”
Stuart said Havertys is also wise to return to higher-end furniture, where customers are willing to spend more.
In 2006, Havertys’ sales were above $200 a square foot, Smith said. Now, they’re closer to $15o a square foot. But in three years or so, Smith is confident than the changes at the company and the improving housing market will mean sales rising to pre-recession levels.
The company has brightened and de-cluttered its stores. Its new ad campaign features a woman taking furniture with her on her dates. A print ad in magazines like Southern Living has liftable panels, like perfume ads, that show the various fabric choices for a chair. The point, Smith said, is to get customers out of their houses and again considering new furniture.
“We’ve changed our stores significantly for the better,” he said. “They don’t know it.”
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