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Thread: Haverty's Makes Money

  1. #1
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    Default Haverty's Makes Money

    Reading in the trade journals, I was amazed to see that the 119-store Haverty's chain (based in Atlanta) shows a positive trend in store sales (only 2% same store sales), but in a recessionary climate, that's impressive. But what really just totally blew me away was that they have increased their gross profit margins the past few years from 46% to 52%, which is the highest I have ever seen from a retailer. (FYI, I run my store at far less than that). How do they do that? Private label product obviously, and buy low, sell high. The Sofa they sell for $ 999 "on sale" costs them around $ 480 for example. They're making money....good for them.
    Duane Collie
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  2. #2
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    Default Re: Haverty's Makes Money

    Perhaps they are also living off their reputation rather than living up to it.

    I live in Atanta and Havertys was once regarded as one of the 'better' furniture retailers that sold upper middle products. If it came from Havertys, there was the notion among average consumers that it was probably quality furniture because they only sold furniture from well regarded makers. Now most of their stuff is private label and Made in China.

    When a company transitions down to a lower quality and cheaper product, they are often initially successful because consumers associate the brand or store with quality and simply think they got a bargin. But eventually word gets out that the store or brand is not what it used to be and deeper discounts are required to make a sale resulting in lower profits.

    I know its a tough market but Havertys may find they have hurt themselves in the long run.

  3. #3
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    Default Re: Haverty's Makes Money

    So many have been down the road. Ethan Allen, La-Z-Boy, Hickory Chair. Stickley is doing it now having opened up a Vietnam plant and moving production there from New York State....build a name, and then switch gears and go cheap. It works for a few years, but catches them in the end.
    Duane Collie
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  4. #4
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    Default Re: Haverty's Makes Money

    Do you know when Hickory Chair pulled the plug and went SE Asia?

  5. #5
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    Default Re: Haverty's Makes Money

    Hickory Chair didn't go to SE Asia, they just went cheap (IMHO). I tried for nearly fifteen years to get a Hickory Chair Dealership and was denied all the time (I was too close to Mastercraft Interiors - a 5-store local chain who was a huge account for them).

    Mastercraft began failing in 2005 and was gone in 2007, and then Hickory Chair was more than happy to have me as a dealer when that occurred. I went back out to look at their line in various stores and was very disappointed in the quality. Joinery was poor, tailoring not good, chairs and sofas didn't sit well. They had changed over the years and it was no longer a product that met my standards and I told them as much. They hemmed and hawwed on the phone a bit, and then acknowledged that they had made cost cutting changes in their manufacturing process to give the end consumer a lower price point.
    Duane Collie
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  6. #6
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    Default Re: Haverty's Makes Money

    Duane,

    You mentioned Stickley so what is your opinion of Stickley upholstery? My understanding was that it was pretty good and that in general Stickley was still a maker of quality furniture.

    I know they have their 'Antiquities by Stickley' line which is imported but then even H&M imports the Randall Allen line so I assumed that the American-made products would still be good quality but I'd appreciate your opinion and specifically about their upholstery line.

  7. #7
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    Default Re: Haverty's Makes Money

    I can't really comment on Stickley uphostery per se as I haven't spent any time looking it over. Sorry!
    Duane Collie
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  8. #8
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    Default Re: Haverty's Makes Money

    Thanks anyway Duane.

    I appreciate all your advice. I still have the Hancock and Moore chair that we talked about on my list and it's getting closer to the top.

    I was looking at a fabric Stickley sofa which appeared to me to be well made. In addition to the normal indicators of quality, they say their stuff is 'flow-matched' so that the patterns line up.

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