IMPORTANT changes in Hancock & Moore-Jessica Charles-Councill furniture AUGUST 1

[drcollie]

I'm pretty good friends with the owners of H&M and what they are trying to do is build the brand, and they absolutely believe this cannot be down through discounting and heavy cross-shopping. This company is not owned by a corporation or trades publicly. They are privately held with (4) owners (2 primary) and these gentlemen could have retired or sold the company long ago, as (unlike me!) they have made their money and don't need more wealth. So now their focus is to make a name for the brand and elevate the status of it. And I think we all know that you can't do that with heavy discounting of a product (think Rolex, or Cartier, or even Porsche, or Prada). They have eliminated several shady dealers in 2012 and the first part of 2013. They were terminated, plain and simple. One of them did far more business than I did and was located in Maryland - he did huge numbers for H&M but sold the product so cheaply that he was literally working for peanuts. You have to make margin to stay viable, and he was well below those thresholds and became a liability to the brand, not an asset. I lost many, many sales to that operator after doing hours of work for people who them ordered from them on price alone. Can't say I'm not glad that he's terminated.

H&M is not going to sell direct, and not opening their own stores. They are protecting their brick and mortar dealers, simple as that. It's the direction they choose to take and there will be no exceptions. This doesn't mean you can't buy long distance, but it DOES mean you can't buy it for what you have been paying. Let's look at an example:

An imaginary chair has an MSRP of $ 3,000. Currently, with that MSRP I sell that for $ 1,400 via internet and then you pay delivery fees on top of that. Beginning Aug 1 that same piece will now be $ 1,950 + delivery fees under the new "no less than 35% off" rule for e-commerce buys. Most brick and mortar dealers will be selling that for $ 1,800 across the nation.

That's how the numbers will be shaking out - so you can still get it via long distance, but it will be more than what you have been paying. Any dealer that sells it for less via internet/phone is jeopardizing their dealership. I'll adhere to the policy they set, because I'm too old to start lying about things and being devious to make a sale - its not in my character. Unless of course, you physically arrive in my store, then it doesn't matter where you live, I can sell to you at any price I choose. Its a sticky wicket. but i shall go along with the policy as written.

I have an appointment with a manufacturer's rep for a new leather upholstery line next week. This one shows potential as its USA-made, solid hardwood frames, 8-way hand-tied, decent styles and I have been assured I can drop ship to my internet customers and no limit policies will be forthcoming. It looks promising, but I'm not yet ready to give out their link to their website - still investigating it. I am looking for high-quality alternatives for my customers who are not in and around the Wash DC area.

[MRSSQRDAWAY]

Duane did I misunderstand? Is there to be no more internet sales at any price or just no more internet sales discounted more than 35% ?

[Damask]

Thank you Duane for the update... though news are not as good as we hoped for...
There are a few big stores in my area that offer H&M - or I should rather say "stores that are SUPPOSED TO offer H&M". Most have a piece or two (literally) of H&M furniture on the floor, and all have zero, or close to it, knowledge about the brand. If it wasn't for YOU, I wouldn't be in the process of purchasing H&M right now. I chose to do business with you not only because of the price difference but because of your deep knowledge and superior customer service; I know you'll take care of me not just until my CC is charged but until the furniture arrives safely and all is well. Based on many reviews I read about the other stores, as well as from my own experience, I know they will NOT. You've been patiently guiding me through the whole process for few weeks now, and I'm truly grateful! If I have to drive to VA for my next order, I will (hubby already agreed!). The downside though is that this won't happen for at least few months... What makes me sad the most however, is that you'll have to spend much more time on building your local business, and thus limit your online presence... I hope you'll keep this forum going; we need it... we'll help you!

[drcollie]

Here's what is going to happen to EVERY Hancock and Moore, Jessica Charles and Councill dealer effective August 1:

Any E-Commerce customer phone, email, internet) cannot be sold for less than 35% off MSRP. That price cannot include free shipping or other add-ons to lower the overall cost. Every dealer has a retail price book in their store but there is not an on-line version of it.

Dealers are free to set their own percentages off MSRP in their brick and mortar store and sell the product for whatever they like as long as the sale did not originate via Internet, distant phone call, or other electronic means. If an out of sales territory customer walks in the store, then they can buy at the brick and mortar price no matter where they live. The key is a physical presence in the store.

**********

Here's what is going to happen in my store, it will be a very confusing time for a bit:

Current price structure evaporates on close of business July 20th. New pricing will be in effect on Monday, July 22nd. Not only is H&M having a general price increase across the board, but i have decided to raise my margins as well, and this is as good as any time to do it. When the Recession hit in 2007/2008 I went into an aggressive pricing mode to stay alive in business and that was successful. Now its 2013, business is better and I am older (59 years old on 07/22, my birthday). I have long wanted to hire an assistant who can help lift furniture and make the store better, and my body is getting tired hauling sofas by myself. By coming up on my margins, I should be able to hire a helper in the next few months. I'm already the lowest price in the entire Wash DC area on what I sell, but there is not enough profit for an employee - so I'm basically adding on another 5% to the H&M price increase in an effort to build some cash so I can get some help before I stroke out lifting these sofas by myself. While no one wants to pay more (i understand that) there comes a time when I could use some help and that requires a little more cash in the kitty to pay that helper.

Then, on August 1st all E Commerce sales will go to 35% off MSRP and the Town and Country Program with H&M will go away for distance customers and be offered to those who are physically in the store as shoppers.

Bottom line? if you want to buy H&M group pieces, your best time is by 07.20. Prices are going up on the 22nd for all customers. Then, on 08.01 there will be another new price structure for E-Commerce customers only because of the new policy.

[drcollie]

I'm going to 'break a rule' here and show you this price structure and what is going to happen with H&M pricing. For my example I am going to use a # 9503 Kodiak Sofa in both a Grade 2 and the Town and Country married cover leather so you can see the current spectrum and understand what is going to happen with pricing.

Now through July 20th 2013:

# 9503 in Price Grade 2: $ 4,095 + Shipping for e-commerce customers, $ 4,388 in-store local price
# 9503 in T&C Document Saddle: $ 3,079 + shipping for e-commerce customers, $ 3,299 in-store local price

From July 22nd through July 31st:

# 9503 Kodiak in GR 2: $ 4,241 + shipping costs for e-commerce customers. $ 4,534 in-store local price
# 9503 in T&C Document Saddle: $ 3,290 + shipping for e-commerce customers. $ 3,517 in-store local price

August 1st when the new E-Commerce policy goes into effect:

# 9503 Kodiak in GR 2: $ 5,704 + shipping for E-commerce customers (35% off MSRP), $ 4,534 for in-store local price
Town and Country Program will cease to exist for E-Commerce, $ 3,517 in-store local price (Document Saddle Married Cover)

You can expect the same kind of pricing to be across the line on every piece. As you can see, there are dramatic differences in the way pricing is going to shake out. Hope that helps explain it (please do not email or PM me to ask for quotes such as posted here, I will only do quotes for pricing that is in effect the date of the request).

Hope that helps show it. And hope I don't get in trouble for posting that!

[QualityCounts]

Very helpful, Duane. Thank you.

[Riddle]

Interesting. I'll go out on a limb and predict that H & M will be out of business within 5 years if they stick with this approach. If H & M's primary goal is to elevate brand image, they would do well to go directly to a "to the trade" model. Most furniture stores - even high end ones - don't have the skills to do what's needed to build image.

I learned about H&M on this forum. I prefer to buy locally. One store supposedly carries H&M, but didn't. The other store (still huge, beautiful, in a location with astronomical rents) had about 10 H&M pieces on the floor. Unfortunately, since this formerly family-owned business was acquired by HOM Furniture in 2008, it no longer offers the level of service I expect for premium prices.

Duane's customer focus is the differentiator that made me risk buying something expensive from a store I had never set foot in.

[drcollie]

I don't think they (H&M) will go out of business my any means, but I see what they are trying to do is Market Shift and they are willing to take the lumps in sales volume (if they come) in the meantime. One of the things we tend to forget is that this is a privately-held company, not beholden to investors or stockholders like so many are these days. The principals are willing to give up bottom-line profit in order to take the brands where they think they should be, in other words its brand and image building, rather than volume-driven. Their number 1 account - by far - is a series of well-known stores that have the highest retail prices on the product, so that is proof enough that not every maker, or store, has to be discount-driven.

One thing that was said to me in our phone conversations was "The store salespeople that work with customers deserve their sales commissions. So many retail customers work these salespeople and then go to the internet and price shop it, and buy from the lowest person. We want to eliminate that. You are an exception to that rule - the only one out there that is helping us by educating the consumer on the internet, we realize that." And you know, I can't argue that logic, I agree with it and always have. Since I started this forum in 2008, I have never - ever - said "Go shop locally and then call me for a price" and I never will. That's unethical and I don't need a sale that badly to encourage that behavior. As a consumer you should buy from whom you are comfortable doing business with, and the customer that spends hours shopping for the last dollar in price is not someone I strive to have as a customer anyways.

This whole forum thing is a bit of an anomaly. Other stores have tried it but give up when they realize the thousands of hours it takes to do it, its a huge investment in time and resources to do an informational site such as this (and without our volunteer Admins it would not be here either, there's a lot of maintenance that I don't know how to do on it). The new policy will make forum users that want to buy from my store 'collateral damage' the way I see it. The new H&M policy was not targeted at this forum or my store in the least - but we will be swept up in it. To quote an old Stars Wars phrase "There is a disturbance in The Force"....lol. But I will be able to weather it as I have so many others in this business, this is not my first rodeo...

What I think will happen, is my dedicated customers will simply make an occasional trip to Washington DC and make their purchases in-store. This is a pretty cool place to visit (just don't come in July and August) and I'm literally 6 minutes away from George Washington's historic Mt Vernon home - many will tie it in with a vacation or business trip here. A few will take it at the 35% off MSRP prices and that's how it will be. I still think Hancock and Moore is in a class by itself, I've pretty much drank the Kool-Aide on that one. I can't find a ready-made supplier to replace them for internet and distance sales because there is not another company doing what they do. I'll still have Bradington-Young I can sell un-restricted, but its not H&M. And I'm going to look at other suppliers as well and may come up with something I like and can get behind.

I have great respect for the gentlemen that own H&M. I don't always agree with them, but I think they're a lot smarter than I am. They have a vision of where they want to take the companies and eliminating the e-commerce heavy discounters is part of that plan.

[drcollie]

Tomorrow (Sunday 07.21.13) is the last day to order any of the H&M family of products before the price increase goes into effect. I normally take Sundays off, but still have many orders to process so I will be at my store tomorrow from 9 a.m. to 2 p.m. Eastern Time for phone and email only. (My store will not be open). tel 703-360-6399

[BevoGal]

Tomorrow (Sunday 07.21.13) is the last day to order any of the H&M family of products before the price increase goes into effect. I normally take Sundays off, but still have many orders to process so I will be at my store tomorrow from 9 a.m. to 2 p.m. Eastern Time for phone and email only. (My store will not be open). tel 703-360-6399

Duane, does it help if I fill out in advance the order form you uploaded to this forum? We want to call to give CC#, but could email the form (minus CC#) in PDF. We don't want to duplicate. Let me know which is easier on you. Thanks!