HIGH POINT — It’s older than fellow Atlanta-based brand Coca-Cola and thanks to its leaders’ willingness to adapt, Top 100 retailer Havertys is still going strong after 139 years in business.
During Water Tower Research’s Furniture/Furnishings Virtual Conference on Jan. 17, Chairman and CEO Clarence Smith and CFO Richard Hare spoke with Budd Bugatch about the brand’s rich history, how it has evolved over the years and how it’s positioning itself to compete in the future.
Smith said evolution is a big part of Havertys’ story, and significant changes included transitioning from a credit house to outsourcing its financing options and self-branding once Thomasville and other former Furniture Brands International brands started opening their own stores.
“That was over half our business,” Smith said, noting that Havertys was once the largest company to carry Furniture Brands products. “When they opened their stores, we became our own branded retailer. We started that in 2000. In the past 20 years, we’ve become a very good branded retailer where we source our own product exclusive to us. All of the furniture on our floors is Havertys branded product. Today, I think you have to be a branded retailer to survive. It gives you pricing power.”
Smith said by self-sourcing and being able to control quality and exclusivity while promoting special order capabilities, Havertys has been able to significantly boost its average ticket from the $1,200-to-$1,400 range to around $3,200. He said if the customer is using Havertys for in-house interior design, the price tag jumps to closer to $7,000.
Like many retailers, Havertys had to make some difficult decisions during COVID. Hare noted that it drew down lines of credit and sold a couple of properties while it reduced its headcount and cut store hours.
“We have fewer salespeople but they’re making more money and it’s a much more efficient model,” Hare said. “When we reopened the business was much better than anticipated so we generated a lot more cash and we were able to pay back the lines of credit. We were able to repurchase two distribution centers.”
Also during that time, the power of e-commerce came to the forefront. During COVID, Havertys got around 8% of its sales online. Today, that number has fallen back down to the 4% range. Smith said having a top-of-the-line website is critical, even if the consumer ultimately prefers to shop in store.
“That’s our front door, and it has to be the best in the industry,” Smith said. “We invested heavily to build the site. We’re spending a great deal of money there.
“Our customers like to see the product. We want them to see the product,” he continued. “We want them to deal with us so we can help them make their home the way they want to be. When you’re dealing with tickets $3,000 or $4000 they want to see the furniture.”
Another differentiator is Havertys’ last-mile delivery service. By using its own people, Smith said Havertys can control the customer experience from start to finish.
“The last mile separates us. It’s something we’ve been dedicated to all along,” Smith said. “When you buy product from us, you can see online who your driver is, his picture, when they’re going to be there. It is expensive and difficult and hard to keep the costs in line but that expertise of controlling all that distribution is a significant brand enhancement for us.
“I think it separates us from the promotional players, the mom-and-pops who use third party, the Amazons and Wayfairs who use third party. These are Havertys team members. If something goes wrong, we fix it there or replace it. It completes the furniture buying process. We want to make sure it’s good for the customer and that’s why we have it in place.”
After a good run with its “Furnish Happiness” campaign, Smith said all those strengths play into Havertys’ latest campaign: Regret-Free Guarantee. “We want our customers to know we’re going to make it right for them. We can execute on that and we want our customers to know that,” he said.
Smith said this year, Havertys expects to open in four former Bed Bath & Beyond locations, which plays into its target of five new stores per year. He said Havertys will continue to evaluate markets to decide where business might be best.
“We believe we’re beautifully positioned for growth and market share gains in our territory,” he said. “We’re looking at where people are moving and aggressively opening stores in those markets.”
See also:
- Havertys expands ‘Furnish Happiness’ mantra to help shelter dogs find new ‘fur-ever’ homes
- The laugh is on Havertys with its Father’s Day social campaign
