HOM Furniture’s CEO On How Mid-Sized Retailers Survive Covid-19
Photo courtesy of HOM Furniture

HOM Furniture’s CEO On How Mid-Sized Retailers Survive Covid-19

Rod Johansen talks store opening delays, supply chain challenges, and why local companies with more than 500 employees get stuck in the middle.

In the weeks before temporarily shutting down stores to slow the spread of Covid-19, HOM Furniture’s March sales were up over last year. Store traffic was brisk right up until the company voluntarily closed its stores—including Gabberts, Seasonal Concepts, and Dock 86—throughout the Midwest on March 19. But Minnesota’s largest furniture retailer had already been experiencing disruption within its supply chain from China weeks before a national emergency was declared in the U.S. HOM Furniture CEO Rod Johansen—who has a reputation for keeping cash on hand—talked to TCB about how the more than $250 million company is navigating the shutdown, and how it might impact business in the coming months, including the delayed opening of a new store in Eau Claire, Wis., and the possibly delay of one near completion in Bloomington.

TCB: How had business been in the few weeks leading up to a national emergency being declared? Were you starting to see store traffic thin out?

Johansen |  Our business had been good prior.  Weather was very good, which is an important factor at this time of year.  We probably felt a slight decline two weekends ago, but probably better than we anticipated.  I think a fair amount was because the general marketplace had not started taking this as serious as it was.  At the beginning of the week of March 16, we started to see a noticeable dip in business, but still, in my opinion, better that it probably should of been with a crisis of this magnitude going on.  Obviously, people have needs for a variety of reasons that most customers don’t experience and HOM carries a very large inventory and was able to deliver products to customers quickly.

 

Q. you’re able to sell online now?

A | We will continue to do e-commerce through our websites, which have been much busier than normal.  We have added phone support for those customers that have additional.

Q. In addition to existing stores, you had some construction projects underway? 

A | We were supposed to open our brand-new showroom in Eau Claire on March 19, and so we have a beautiful new showroom with anxious customers waiting to get in, and we will all just have to wait.  We also have our new Bloomington HOM, Gabberts and DOCK 86, which is in its final stages of construction and we will be starting to move furniture in there as soon as we go back to work. So many of our departments were very busy, including our marketing department, developing a host of new campaigns for this wonderful new showroom. They are all working from home now, also staying safe.

Q. So how does this impact your moving plans from Galleria in Edina to the new Bloomington store?

A | We are not yet sure how it will affect the opening date in Bloomington, but there is a chance it will delay us some. The biggest issue we have there is the moving sale we are running at the Gabberts Galleria location. It gives us a month less time to liquidate the goods we needed to move out before we move.

Q. How much work is happening behind the scenes? 

A | Some departments are still operating, trying to receive freight that was in process. Delivery staff is completing orders for current customers and also assisting online customers that have emergency needs.  Our office staff are either working at home or have been given additional PTO along with the bulk of our sales department so they can go home and hunker down for the time being.

Q. You’ve been in business a long time—have you ever experienced anything comparable to this?

A | We have been in business for 46 years this spring, so we have been through a lot but nothing has been as difficult as this with all the potential devastation to so many families in the world and the financial devastation that we are going to see for almost every American.

It was interesting how this really has come full circle.  The devastation for Asia and China in particular was obviously in February to a large degree when they were fairly locked down in many areas and not allowing their people to be able to return to work after Chinese New Year. Then slowly, they got back to work and the concern for American wholesalers and retailers was product shortages from all of Asia due to the dependency on China component supply chains that were disrupted.  Turn the clock forward to today and now we have America and Europe, the biggest customers of Asia exports now dealing with the pandemic and American and European businesses now cancelling major orders that they feared they were going to have a hard time fulfilling.