Havertys is a full-service home furnishings retailer with over 120 showrooms in 17 states in the Southern and Midwestern regions of the U.S. providing its customers with a wide selection of quality merchandise in middle to upper-middle price ranges.
Challenges
- Furniture industry is fiercely competitive with many competitors closing, consolidating, or refocusing.
- Industry wide gross margins had dropped more than 6% over 10 years
- Retail furniture sales were growing at roughly half the rate of overall residential furniture sales through all channels
- To remain competitive, Havertys needed to refocus and redefine its competitive strategy
Approach
Defined nine major strategic areas to reposition Havertys in the marketplace:
- Strengthen retail store as primary sales channel & grow share and sales productivity by realigning store operations around the customer
- Increase gross margins by improving product mix and pricing
- Leverage existing infrastructure to reduce SG&A costs
- Develop specific strategies for key markets like Atlanta and Dallas
- Strengthen Havertys as a value-oriented brand within existing product categories
- Create a direct sourcing capability
- Deliver store growth with a focus on existing geographies
- Improve marketing & advertizing to increase quality of traffic
- Reevaluate target consumer, marketing and brand positioning
Results
- Increased focus on direct sourcing and proprietary brands led to improved quality, shortened lead times, and reduced product costs
- Focus on retail stores led to increased sale closure rate and higher average tickets
- Focus on expansion within existing geographies allowed targeting of fast-growing markets with established brand name
- Improved marketing, targeting and positioning led to increased quality of traffic
