New Corporate Philosophy Ignites Badcock; President Don Marks Leads the Change

Furniture World Magazine

Badcock Home Furnishing Centers' new corporate philosophy has invigorated the 96-year-old company and resulted in an unprecedented amount of growth in sales. Overall revenue for 1999 was the highest in company history at $465 million, and revenue for 2000 is ahead of that pace. The company's new philosophy can best be summed up by President Don Marks: "We're organizing ourselves around the customer and not the product." In doing so, the company has focused on making its stores more appealing to a wider consumer base, improving its already impressive back office procedures, and implementing Strategic Planning for the first time in company history. So far a total of 15 stores have converted to the new Badcock &more format, which features a bold new logo that conveys a more contemporary look and communicates Badcock's intention of providing more of everything to its customers. The new stores are brighter and furniture is displayed in a room format, making it easier to see and easier for the shopper to view the entire merchandise selection. The new-look exterior and interior was designed by internationally recognized retail design firm, GRID2 International. GRID2 continued the identity program inside the store using red T-walls with end caps displaying the Badcock logo. The first store was converted in March of 2000 and made an immediate impact in its market of Dade City, Florida. Sales increased the first month by 70% and have continued to set records. The other 14 stores have followed the same trend with record increases and excellent customer reception. The corporate goal is for 80% of Badcock's 340 stores to be converted to the new format by 2004. "We are very pleased with our new stores," Marks said. "They are being highly accepted by customers in all markets. The merchandise shows better, and our new stores appeal to a wider audience. We are broadening our market by bringing in more higher income customers while continuing to serve 'Working America/ which translates to middle income working people who are looking for high quality goods from a store that gives them superior service and highly competitive prices." The newly converted stores have seen an explosive 25-30% sales increase in the past eight months, while same store sales have increased an impressive 8% While the company has traditionally relied upon in-house financing for the majority of its sales, Marks expects a large increase in cash sales from the converted stores. One of the hallmarks of Badcock's success is the fact that its stores are owner-operated "We like to say our associate dealers are married to their communities," said Marks. "Having ownership in their store motivates them to be successful. They're active in their communities and work very hard for their customers. They know their customers by name and they take care of them. "Our customers want high quality goods with good service. We don't rely on financing gimmicks to get customers into our stores. We rely on service." Continued improvement in Badcock's well-honed back office adds to the company’s efficiency as well as to customer satisfaction. "Our back office systems are so efficient we make more profit per product and use those profits to reduce the cost to consumers or reinvest it in the business to continue to become even more efficient," Marks said. "We select the best product at the best price, warehouse it, then ship it to our stores. We can put any one of more than 4,000 products in any customer's home in our seven-state market area in seven days. I don't think anyone else in the Southeast can do that." Prior to joining Badcock in 1998, Marks had more than 20 years' corporate management experience with such companies as McDonald's Corp., Pepsico, and Thorn-EMI "Part of my joining the company was to increase its level of sophistication via planning," he said. He implemented the Strategic Planning Department in February, 1999, and developed a plan that time lined the company's accountability. This enabled Badcock to focus on a series of company goals, many of which have already been exceeded. Sales goals have been exceeded in total revenue and same store sales. This more sophisticated approach to operations and marketing is evidenced by department-provided psycho graphics and clustering data as well as demographics to determine market trends, new customer bases, and niche markets for future growth. Marks continues to see a bright future for Badcock, and says he's already planning the company's 100th anniversary celebration in 2004. He recently signed a 3-year extension to his initial 3-year contract.