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Physical retail space is coming back and it’s coming back with a vengeance.
It is no secret that digital upended how brick-and-mortar retailers conduct business. Yet, as time goes on, retail is beginning to uncover that to maximize your business—to grow and expand profitably—there has to be a space for both the physical and digital in your long-term strategy.
In this week’s episode, we chat with Vice President for Collier’s Furniture Industry Real Estate Group, Ben Haverty, on how physical retail space is necessary for continued business growth. We:
- Touch on his family history and his ties to the industry (his great grandfather started Haverty’s Furniture over 130 years ago!)
- Discuss how mega box stores such as Macy’s, Target and Bloomingdales are still expanding their physical footprint in the digital age, albeit in smaller formats
- Highlight how Nebraska Furniture Mart is making waves in our industry by becoming a real estate mogul
- Answer questions you should be asking of any landlord during a contract negotiation
- Confront the biggest mistakes retailers and entrepreneurs make when looking to expand their business.
Full Transcript
Mark Kinsley
If you haven’t heard he is a real estate expert and he’s on the show to explain what Nebraska Furniture Mart is doing that unlike almost any business in our industry and to talk about the future of physical locations for Furniture and Mattress stores. The DOS Marco show begins in 60 seconds driven
Mark Quinn
Liftoff. Kinsley. It’s a beautiful thing. You know, I got a text from my dad. We had 20 People over this weekend for Christmas. And it was Bridget’s sister’s family. So it was kind of cool. And then I got a text my dad got COVID Can you believe that? Oh, but he’s good. It’s okay. He’s like a total wise ass and everything’s fine.
Mark Kinsley
Well, as you know, continues and aiming
Mark Quinn
right. But he’s, you know, he’s vaccinated, all that stuff, but he’s doing good, but it’s so take it for real. I think there’s a lot of spread. But if you’re, you know, taking care of yourself, you’ll be fine. But
Mark Kinsley
he still has his sense of humour. You know, Nick coin is still Nick Quinn, which if anybody knows this industry, well, Nick Quinn is a legend. So hey, wishing you well, and all the health soon? And yes.
Mark Quinn
March reminder to keep everyone well, but then having the likes. Well, look at me. He is looking great today, Ben, thanks for coming on the show. Really, really glad you decided to join us to talk about all things dirt. When I introduced Ben to Adrian, I called him a dirt dealer. Were you mad at me, Ben? Was that fair?
Ben Haverty
So what I do is sling in real estate.
Mark Kinsley
Well, Ben, that last name years Haverty is pretty familiar to a lot of people in the industry. Is there a connection there?
Ben Haverty
There is my great grandfather over 130 years ago started Havertys furniture. And then there’s been family members working in and out it through the years. I had a nice long stint there for about 20 years and love it. There’s it’s a publicly held company, it’s on the New York Stock Exchange. But there’s still some family remnants that are there. And back, my brother heads up the real estate department for happiness. So we talk shop regularly.
Mark Quinn
So Tim heritage Yeah,
Mark Kinsley
yeah, it is it is. So you were there for 25 years. And now you’re in the real estate business, we call yours. And your brother is Meanwhile back at the ranch at Havertys. How did you guys get interested in the real estate part of the business throughout the years, and then you’ve just taken off into that space? Well, the,
Ben Haverty
you know, most retail businesses grow their businesses by growing their store accounts. They may have a three, four or 5% increase every year. But if they really want to dramatically grow, they need to grow their footprints. And so my father, who was a president of heavies for many years, also did all the real estate and then eventually brought my brother in to handle the real estate. So they they together help grow it and then when I was an employee there, I found the real estate for the stores I was responsible for as well as I went through this period as an entrepreneur in the real estate business and did all the real estate work for my stores personally so I’ve got a unique window and that both I have been a retailer as well as I am a retail broker. And so there’s very few people in the real estate side who actually practice the art and science of furniture retail.
Mark Kinsley
Alright, so we’ve kind of touched on a few things here but give us a capture of who you are. Who has been hacked cuz you talked about being with Havertys for 25 years and then running the entrepreneurial side of your life. But what’s your elevator pitch so people kind of get a lay of the land for who’s been Haverty?
Ben Haverty
Well, you know, one, I’m on a great team. Colliers International is one of the third largest real estate commercial real estate companies in the world. And we’ve got about 80 offices in the United States. I specifically head up within Colliers the furniture, real estate and practice group. And we both help retailers as well as wholesalers find real estate solutions across the country, from California to Florida, to Michigan for their problems. And the reason I’m heading it up is because I have so much experience in the industry as a practitioner, as a retailer, as well as running a home distribution centre. So I know the business and can help find realistic solutions for retailers and wholesalers based on my experience.
Mark Kinsley
Take us into what does that world look like today? Because the immediate question I had, whenever Mark, when told me that we were going to have you on the show was, things seem to be changing very rapidly. In the commercial real estate business as it relates specifically to Furniture and Mattress stores. A lot of people have a doomsday scenario that many products are moving online, or there’s such a hybrid of E commerce and brick and mortar retail that you’re going to start to see some of the brick and mortar locations, share shed some dead skin and there’s a massive reset, but give us the reality because you’re living it you see the numbers, you see the data, what’s this world shaping up to look like this year and beyond?
Ben Haverty
Well, you know, there’s no denying that digital retail is affecting physical retail. In the furniture world, obviously, you have the Wayfair of the world caspers of a dozen digital mattress stores have entered the business. But all of them had found that you can only saturate the market so much with digital sales. And eventually to grow your business, you have to get into the physical retail world. And so obviously, the announcement with Wayfair opening stores is a was was always coming. They’ve had a head of real estate for years, even though they’re just opening up, but they’ve been planning it for a while. caspers again, now 200 retail stores because they’ve realised that people still need to touch and feel product in order to feel more comfortable buying it. And so we’re going to continue to see two things. One, obviously, pure digital furniture brands are going to start opening up stores, as well as current physical retailers are going to get more and more sophisticated in offering their products online. So again, the reality is the buzzword Omni retail really does apply to the furniture world. And that digital retailers are getting into physical locations, and traditional retailers are expanding their market by offering more than digital so.
Mark Kinsley
And Ben, I think one of the things that stood out to me, over the past year and a half ish of interviews here on the smart Coast show is one we did with Doug Stephens, who is a retail futurist. And Doug talked about the media effect of having a physical product in a location, people first get exposure to that product at a physical location, then they go home and buy it. So there are plopping down products or stores within these different metros and then looking at 510 mile radius is for online sales and seeing major lift. Have you experienced that in this category? Do you see that?
Ben Haverty
Well, and what we see happening is furniture shoppers are using the internet. But as much as anything, they’re using it to find the retailers and the products that they want to put on their physical shopping list. So you’re being your website’s defining who you are, and that customers mind and they’re making a decision. I’m going to go to this store this store this little because they have products or like they have a feel like they have a presentation like and then customers are coming in a little bit more with a mission post just wandering around the store. They’re saying, I saw this bedroom suit on your website, can you show it to me. So they’re coming there, they pre qualified the store using the internet, but they’re still going to the store to touch and feel that product. And then many times if they don’t bought there, they may go home and then go back on the website and purchase it there. And so the store is still very much an integral part of the buying process. But the web site has now become a bigger part of the physical process. If
Mark Kinsley
anybody’s ever seen the path to purchase studies for mattress buyers or furniture, buy Pick, pick a product in the furniture space. You would think it would be go online, I’m going to do my research and then I’m going to go to the store and then I’m going to buy it now. You’re going to multiple stores, you’re going in and out of the active shopping phase. It’s a big giant snaking process. And then there’s the consideration phase. And then the holidays hit and you drop out of the consideration phase. And it takes three months. And so it’s a really messy process. And so we quit. And I’ve talked about this a lot. And we talked to many brilliant retailers about this idea of making sure that people can buy where they want to buy, how they want to buy, if somebody comes into your store, how are you giving them ease of purchase after the fact with products like podium payments, you know, the be back bus only travels one direction, it’s not back to your store. So it’s a messy world out there. And I think putting as many hooks in the water and giving people that opportunity to purchase making it easy. And eliminating friction is such a key.
Mark Quinn
Yeah, it’s got to be for everyone, isn’t it? I mean, the brick and mortar guys have to go backwards in the direct to consumer guys have to go forwards. And that’s just how it is. But hey, Ben, I have a question for you. If you can give us a little bit of a bigger picture look. So talk to us about prices on real estate, talk to us about supply with the current brick and mortar spaces out there. And their third part of that is are there you know, are there any box sizes that are like maybe better deals than others? Sometimes the bigger box things, bigger box environments have been at cheaper cost, because there’s less demand for them. So give us just a kind of a general feel for real estate out there today.
Ben Haverty
Well, right now, physical retail is back. People’s stores are opening. And as I’ve said earlier, this year, there’s been a 30% drop in vacancy rate in traditional retail real estate available, there’s been a 40% drop in vacancy in malls.
Mark Quinn
Hey, Ben, do me a favour. Instead, you cut out there for me how much of a drop was that at first.
Ben Haverty
And traditional real estate, retail real estate there’s been a 30% drop in vacancy rate. Okay, so stores are filling back up in malls, there’s been a 40% drop in vacancy rate, malls are filling back up. And as we mentioned earlier, race, rent rates are going back up both in malls and real estate stores, source of supply is going down, demand is going up and prices are going up to follow as well as um, there’s also, you know, 50 million square feet of new retail online that will be coming open in the next year or two. It’s under construction. So there is new supply coming as well. The great thing again, people are physically shopping again. But for retailers who want to expand, they do need to understand that there are more retailers looking at space. And so the available real estate is shrinking. There’s not lots and lots of big boxes just laying around to be picked up at cheap prices, discount retailers, Burlington Coat Factory, Home Goods, those folks are picking off these secondary big boxes very quickly. And so there’s not a gigantic supply. Traditionally, the larger the box, the slower it will turn because there’s fewer people who can use it and it’s more expensive to convert that building. So if there’s deals out there there’s you know, if you need 120,000 foot Sears box there’s plenty of and the relative inexpensive but operating 120,000 foot building is very expensive. Even the rent may be cheap.
Mark Quinn
Well let’s talk about that. So they’re more readily available you know, you look at some of these malls I mean, we talked a little bit about this before the show but Nebraska Furniture Mart just announcing a move into Austin Texas and you know what they did in Dallas they bought all this land around their store pretty dang smart. They’re doing the same thing in Austin Texas. So they’re not just developing a store for themselves the developing the area around the store. So people want to leech off of their popularity and traffic they can do that. But Nebraska Furniture Mart is going to benefit as the landlord of that area around their store. So pretty freakin clever, right? But also Nebraska Furniture Mart creates really cool experiences for people to come out. So, you know is is you see more of a trend that way where like the big boxes, like some of these malls that don’t have experiences, they’re gonna have the trouble right Mall of America. Some of the malls you talked about in Atlanta, if they have, you know, cool experiences nearby, then they’ll be the ones that that’s where the that’s where the traffic’s going to go. Do you agree with that? Or do you think there’s a different take?
Ben Haverty
Well, there are some opportunistic situations where a local entrepreneur or small chain will say, hey, I want to have a superstore, the malls got a vacant Sears I can go in there and get pretty cheap real estate and I’ve already got a brand name and so that’s happening I would not say That’s a major trend, it’s more of an opportunistic thing. What I do see happening probably is more retailers, either one, they’re upselling, there’s their stores because they’ve got some available, less expensive real estate, or they’re saying, You know what, I don’t need a 5060 70,000 foot store, I can have a 30,000 foot store, smaller format store. And I can supplement that my views my internet or in store displays to show my thoughts, merchandise selection. So a lot of real estate, retailers are saying, hey, I can have a smaller format store and still do the sales per square foot, because the internet is going to be my endless. So we do see both both trends. Some people say I’m gonna take advantage of this big real estate, and open a superstore. And then some retailers, more of the chains are saying, hey, I can have a smaller footprint, save my real estate costs. But still, because I’ve got a digital store to complement the physical store, do that business in a small store.
Mark Kinsley
Even if he gets outside of our category, the furniture mattress space, when you look at how retail physical footprints have evolved to merge or support internet sales, what are some of the more creative examples? Or do you have any stories out there? I think about the best buys the world, you know, kind of becoming more of a showroom, where you can go in and see something but they’re not as actively trying to sell in that store. It’s more of a place where you can go and view it, touch it, feel it and then they don’t. They’re kind of agnostic to where you buy it. What do you see out there in terms of these worlds colliding or merging?
Ben Haverty
Well, I’ll give the example you did right there in like bonobos, it’s a men’s store, they sell clothes. And it looks like a traditional store, you walk in there, but there’s no clothes for sale in the store, you can try everything on you want to but you can’t walk out with anything. So literally you try it on, they fit it, you go this is wonderful. You pay for it, and they ship it to you to your private residence, but you cannot walk out the store with a shirt, jacket pants. That’s not how it works. It is a true showroom. Nothing else. And I’m going to talk about the smaller format store, I think a great example most people are familiar with Target has started to open smaller format stores, specifically in college towns. And they’re doing a tremendous business for those smaller format stores. Macy’s recently opened a 25,000 foot store in Newnan, Georgia and an a northern Georgia as well to try to see, hey, we’re gonna not be as intimidating as large is cumbersome, we’re gonna have a smaller format store. Bloomingdale’s just opened up a smaller format store up in DC. And so you’re seeing some traditional brands saying, hey, operating 100,000 stores expensive, we’re going to have a mini store. I think other good examples, you’ll see like Kohl’s is put in Sephora makeup stores within their store. So you’re seeing many stores within a store as well. That’s got
Mark Kinsley
to be a very surgical process in terms of selecting the merchandise for those different environments. You talked about target, you know, serving college towns or college students. But there’s a real editing process that that probably has to go on there, obviously has to go on there. Have you been behind the curtain on some of those strategic decisions about, hey, how do we take this giant footprint and all this merchandise, and then shoehorn it into a smaller box? And how they think about that?
Ben Haverty
I’m working with some retailers and asking the question, how do we go from 40,000 to 45,000, and to make 30,000, our standard. And it’s difficult, because the merchants want to show everything, as you will know. And the cost accounts would have the smallest score possible. So it can keep costs low. And so there’s always that tension between we need we want to show as much as we possibly can. But we also want to do it in the smallest space to still have a constructive presentation. How do we do that? How do we figure that out? And the internet becomes a very integral part of that now and being able to show your full lineup but still let the customers touch and feel and taste the best of the best.
Mark Quinn
Then is there a when you when you look at Build outs on stores, I assume that this has a lot to do with demand. Right? So supply and demand and when there’s a higher demand then the landlords can be a little more conservative when it comes to giving a retailer build out allocations what’s happening to those are you I mean, are there still good great deals to be had in terms of that, or you know, I guess it all is relative to square footage price as well but like anything happening there?
Ben Haverty
Well, the industry calls that tenant allowance money. Right, and when you sign a lease, you may ask the landlord to contribute towards the build out of your store. And, and that is a that is a unique function every single lease, because it all depends on the quality of the retail of a national brand, with deep pockets great credit, or is it a startup that has no track record? That is a big difference between when a landlord because landlords basically loaning the retailer the money to build out the store, and then the retail is gonna pay them out over the lease of the term. Another issue would be the term, landlords want a long steady stream of income. So the longer the lease, they much rather have a 10 year lease and a five year lease, because that 10 year lease is something they can turn around and sell or have a bank, refinance it. So 10 year term is very important the amount of TI money you get, the longer the term, the more ti money, or 10 improvement money you can get. And it also functions to the landlord, they have to have the resources to do that.
Mark Quinn
But weren’t they like drunken sailors there for a little while with big incentives just to get people in when demand started to fall?
Ben Haverty
That was, again, It all depended on did the landlord have the money to invest? They you know, because you’re loaning the retailer money. So you have to get the money from somewhere. So you’ve got to borrow it from the bank, or you’ve got it in in house. And so it’s always a function of again, the financial strength of the landlord is a big part of how much money they can loan the retail. So the financial strength of landlords a big factor, the financial strength of the retail is a big factor in determining how much to money gets invested.
Mark Kinsley
If you’re hopping in we’re talking to Ben Haggerty, Colliers International, long history in the commercial real estate side of the business for Furniture and Mattress stores and beyond. And then I want to get to Nebraska Furniture Mart first, I just want to talk about that trend. And what you’re seeing with big brands like that. And then I want to jump over next I want to talk about if you’re a furniture mattress store in a smaller to midsize city, and you’re thinking about expanding? What are some of the questions you need to be asking what are some of the strategic data points you need to be looking at. But let’s start with Nebraska Furniture Mart. And the announcement came out the Nebraska Furniture Mart expanding into the Austin market. And mark when you talked about the real estate buying that’s happening around the core store, call it a store such like a campus. But but then is that talk about what’s happening there with Nebraska Furniture Mart, what kind of decisions they’re making, how it relates to foot traffic and destination brands. And just some of the trends and analysis you put around that project?
Ben Haverty
Well, I’m going to put it in start at the core where a lot of small entrepreneur real estate retailers, furniture retailers, have always used the real estate is their long term wealth strategy. The retail, they bought their building, the retail store, they bought their warehouse, and the retail business is pays the rent. And their long term strategy is to maybe sell the business, keep the real estate and and so they will their children or they in retirement their children, their grandchildren will benefit from the real estate more than the retail business. And so that trend has been out there forever. I have many clients that they say I want to grow, but I don’t want to lease I want you to go find the buildings to buy. And those are a lot of family owned chains. That said, we want to grow our business, but we really want to grow our real estate business. A great example is rooms to go rooms to go owns probably about 90% of their real estate. They are outstanding real estate developers, you know they are buying buildings building building stores, and they do quite well. But at the end of the day, their real estate holdings are probably as valuable as the retail business. They are outstanding. And what you’ve seen in Nebraska Furniture Mart is supersized. They are they are in the furniture business. But they’re now even getting into the real estate business where they’re buying like a pin Dallas, 400 acres, putting their million square foot store in the middle of it and then developing everything around it because they bring so much traffic that other retailers, restaurants, hotels, retailers want to be near them to take advantage of that traffic. But what they’re transitioning into is yes, they’re in the retail business, but they are leveraging that to become a big player in the real estate business.
Mark Kinsley
The long term wealth, the generational wealth potentially, is in the physical asset there. It’s not necessarily in the cash that’s thrown off from the business. It’s paying the lease.
Ben Haverty
And so what Nebraska Furniture Mart is doing is it’s been around forever. It’s Just people doing on a small scale mom and pop business owning their real estate and wanting to expand the real estate. And Nebraska Furniture markets taken it to a whole new level that no one else had ever done before.
Mark Quinn
Do you guys remember the Did you ever see the the movie with Michael Keaton, about the the founder of McDonald’s Ray Kroc, think it’s Ray Kroc, right? Krogh. Ray Kroc, thank you. And he’s with his accountant, and they’re doing the books. And the accountant slash attorney finally looks to Ray and he says, Ray, you’re not in the fast food business. You’re in the real estate business. And it was literally, I don’t know if you guys saw that movie, but it was this whole, like, you know, total mind shift in how he was looking at his business. And so Ben, that’s really kind of what you’re talking about here.
Ben Haverty
Well, and the leverage of that story was he was doing a class at Harvard Business School. And he asked the question, Said, what businessman and they went, you’re in the, you’re in the fast food business said, no, they said, Well, you’re in the restaurant business and went, nope. And they know you’re in the service business. Nope. And finally said, I’m in the real estate business. And so he was he was quite clear on what business he was in.
Mark Quinn
No doubt, no doubt. So Ben, if you if you look out over the landscape of independent retailers today, and you were gonna offer up some advice about how to look at the market right now, from your perspective, what advice would you have for them as they’re looking to expand their business?
Ben Haverty
You know, I think number one is first taking care of your core business. You know, there’s that game strategico, where you want to expand and keep taking over continents. But if you get to, your supply lines get too thin, somebody else can come over and take over your home base. And so always focus on the most important thing is you need to make your current store your current market a fortress, you want to you want to dominate it so much that no one else really wants to come in there. And then when you feel like I have really dominate this market and secured it, no one can come in and hurt me terribly, then you can start saying I’m going to reach out into new markets, because expansion is expensive. The old rule of thumb is, if you open your second store, you double your revenue, you triple your problems, and you cut your profit in half.
Mark Kinsley
Say it again one more time.
Mark Quinn
That sounds tempting, say to gamble, so
Ben Haverty
tempting, it sounds great. But you know, all real estate guys, retailers are optimist. They know I can replicate what I’ve got here, I’ve got a winning formula. I can replicate it this morning, this morning. But what tends to happen is, when you open your second location, you double your volume, you triple your problems, and you cut your profit in half, initially, and then if you figure it out, then you will start to triple your profits. But it’s expanding is complicated. Now I always say you need to make sure that your home base is taken care of because expansion is financially expensive. It’s emotionally expensive. Music is the entrepreneur, you’ve got to physically be there probably a lot more, which means you’re not going to be at home as much. It is expansion is expensive, financially and emotionally and physically.
Mark Kinsley
Have you seen people make that kind of accordion strategy, meaning don’t buy the real estate, you know, sign leases, so you can accordion back down or back out based on the changing conditions. I just imagine people’s mindsets right now, in relation to real estate and being a little bit gun shy? How would you be thinking about that strategically? Would you want to be purchasing real estate? Would you think about actually lease leasing so that you can shed some stores if you needed to get out of them?
Ben Haverty
Well, I’ve said lease leasing is much quicker than buying, because most properties out there, somebody owns it. And their whole objective is to lease it to somebody to create an income stream. Some people were out to sell, but there’s all there’s probably 10 times more property that you could lease than you can buy. So if you want to expand leasing is a much quicker solution. You may have to wait for years to find the right real estate to buy to expand where you can wait months to find a property that would work to lease so what is timing how long you’re going to wait. Most public companies furniture companies need to grow and Wall Street wants you to focus your energies on the core business not being the real estate business. So people like an Ethan Allen or Havertys or publicly or even a lazy boy, they would rather than lease so they can expand their furniture business, not expand the real estate business. Because they’re assuming if you’re a furniture retailer, you’re not a real estate expert, your furniture expert.
Mark Kinsley
What are some of the questions that the average retail Other mid side, small city need to be asking landlords or need to be asking people associated with the buying or the leasing process at this stage in the game, you know, I think in the past, maybe you have your standard list of questions. But as things have evolved, what should they be asking and thinking about now?
Ben Haverty
Well, you know, to be self serving, I think the most important thing you do is find a local market expert, you want to guide if you’re going to go into the wilderness, you want to go by yourself, or you want to go and experience God. It’s just that simple. And because real estate transactions are not very frequent, you know, people only expand new stores every once every 510 years. It’s not something that most entrepreneurs are experts at. They they’ve done it once, so they get lucky. And if they do it again and do it wrong, they go out of business. And so you want to find an expert who can hold your hand to take you into that real estate jungle to make sure you don’t get eaten alive. That’s the first thing and the number two is really study the market, understand the demographics. And in most cases, retailers are going to expand into a market, they know, they’re already shipping product into a suburb or a nearby city. And they they’re starting to get a feeling say, hey, it’s time for me to open a store there, I’ve already got a customer base, they’re opposed to I’m going to go to some new market, I’ve never been to I don’t know anything about it other than here’s growing, I’m an open store, that that usually is not a very wise strategy, it’s usually just taking the next step down the road into the next logical market. Because you also specifically furniture retail, you need to have your distribution set up before you open the store, you open a store and don’t have the distribution support it, you’re just going to disappoint customers frustrate people, it’s going to have tremendous expense. So having the distribution network before you open the store is critical.
Mark Quinn
So Ben might Kinsley that was a great question. I’m going to follow it up with one and maybe you already answered it. But I’m going to ask it just in case, what are the biggest mistakes people make out there as they try to expand then is, I assume one of them is trying to do it on their own, even though you know, they, they don’t have the expertise, maybe they’re not getting the help that they need on the front. So maybe that’s part of that, but what are the mistakes people are making that they can avoid?
Ben Haverty
The biggest mistake and I have made it myself personally is expanding too rapidly. Is, is the old saying goes let your your your headlights, your outran your headlights. And that you say hey, there’s not three, I’m gonna take advantage of it. Here’s another option, I would take advantage of it without having the backend infrastructure. And that could be distribution, it could be systems that could be accounting could be qualified management’s saying, Hey, this is such a really great deal, I’m going to open it, and then not having all the backend infrastructure to support that store that I see is the the biggest problem. Again, if you have a great store and a bad manager, then you have a bad stool.
Mark Kinsley
It’s such a good point. I mean, you think about just the basics of growth and growth, eats cash, well, growth eats resources, whatever the resources are, if you don’t have a strong position, if you don’t have that, just like you described, then a manager that’s ready if you don’t have a place to inventory and warehouse and then distribute in that market, if you don’t have the cash to advertise, advertise and promote, and just go on down the list of needs and resources for expansion. Growth, eats resources period. Yeah. But at the same time, it’s it’s it’s it’s kind of interesting to think about, like, yeah, you might be scared to expand into markets. But what what’s kind of the tipping point for people in your experience where they say, No, I got to do it, I got it. I got to do it. Like, is it competition? Is it I want to grow my business? And I have this grand vision? Is there any one thing you could put your finger on?
Ben Haverty
Well, you know, I think entrepreneurs, number one are very driven to grow. They want to create something they want to see the fruits of their labour expand, they are they’re capitalists, they want to make money. They also want to give service because they really think hey, what I do is better than the other guy. I want clients out there to experience it. But entrepreneurs are ambitious people, they want to grow and expand their impact and their income. And so as you know, human nature is to go to access. And so it’s, it’s easy to say yes, let’s go for it. Let’s throw the dice high and gamble. And that’s how great entrepreneurs are made. But sometimes those decisions don’t work out. So it’s that balance of saying I want to grow. Also at the same time I need to be very careful in how I do it.
Mark Quinn
That makes total sense and he goes back to Ben your other comment about you know it doubling your problems and or tripling your problems and reducing your Your your profits by half. But you know, you guys as we talk through growth and going too fast, even more now than ever, right? Because if you crash, the desire to grow against the fact that human resources, finding the right people to run a business may be harder than it’s been in the last couple of decades. Right, Ben? So when you look at those two things side by side, that becomes a real issue.
Ben Haverty
Yep. And like set up a furniture store is quite complex home delivery is quite complex, it’s not easy. And people who subbed out to third parties, it’s expensive on the front end, and that they charge a lot. And on the back end, they do not execute as well as a, you know, a, a to a home delivery team that belongs to the store that is invested financially in the store that takes pride in the store. And so it is hard to grow both the front end and the back end at the same time.
Mark Quinn
Well, I have two quick questions before we close out of here, and then I’m going to toss it to Kinsley to finish this up. But the first question is Mark and I have been toying around with this idea to have just Marcos listening lounges, like maybe 1000 of them all over the country with a big sign on the top that says, Galaxy’s greatest mattress podcast, we could go maybe 2500 square feet serve tequila shots and cappuccinos. And we just wanted to know if you would like be our friend guy for that. Yeah,
Ben Haverty
absolutely. I’ll be happy to do all these deals for you. As long as I don’t have to invest anything.
Mark Quinn
Kinsley what what Ben is thinking right now is I need I’m gonna need the cash up front for that project. Yeah. Okay, so there’s that. And thank you, Ben for not crashing down on us too hard in public here. And then the second one is, you know, Kinsley listening to Ben talking might be cool to do a weather show with Ben, where people could actually call in with questions, because as I’m sitting here listening to Ben, I bet there’s a lot of retailers that are listening to this episode right now, as they drive their car or work on their treadmills are going oh, but you didn’t ask him this. But they have a lot of questions. So Ben, would you come back and maybe some spend some time where people could hit you up with some questions in a live format?
Ben Haverty
Yeah, we’d love to love to be happy to.
Mark Kinsley
That’d be great, Ben, and I’m sure that we can continue to tease out a bunch of topics where you can offer wisdom with all your experience it’s it’s been great having you on the show. You’re a wealth of knowledge and information and just an all around great guy. It seems like
Mark Quinn
a good singer, Kinsley here.
Mark Kinsley
In our, in our tents,
Ben Haverty
what you guys are doing, I think whenever you can educate the retail furniture retail mattress group, that’s wonderful. Like I said, I love the industry. I’ve been there been in for 35 years. I love the people, I love the industry, it serves a great need. And when the most exciting things is home is back in style. Staying at home and making your home furnishings making your bed more comfortable is back. And and people are spending more time at home. And there’s never been a better opportunity for the furniture mattress industry than what we see coming ahead. So I’m excited for all of us.
Mark Kinsley
Well, we’re excited as well. And I think you’re totally right. What a great way to kind of summarise everything that’s happening in the world right now. Home is back in style in such a big way. And and then hey, thanks so much again for being on the show. Thank you for listening. Check out all of our headlines at fam FM dot news. Subscribe on Apple podcasts or Spotify and make sure you are subscribed to our newsletter. Because we have a great surprise coming your way here in the next few weeks. Yes, Yo, Adrian is going to have her own show five minutes of furniture, mattress news. You can use it’s based on the newsletter. And guess what, if you missed the newsletter, or somehow got jockeying around in the wrong spot, you can go over to the website now fam dot news, and you can find the newsletter tab. So Adrian’s also going to have all of that fun, relevant information, piped over to our podcast feed. So there’s plenty of places you can get subscribed or a fan dot news. So don’t miss any of that. And be sure to get subscribed and signed up. Become a member. We’re a we’re your guides in the Furniture and Mattress industry. Just like Ben’s been our guide today. And we’re here for you to text us at 884843 Marcos 2843 Marcos to Duff’s All right, man. Hey, thanks so much. We appreciate you have a great rest of your holiday season and we’ll catch up soon.
Ben Haverty
Thank you, gentlemen.
