Office Furniture

The survival strategy for office-furniture dealers during the recession can be boiled down to one word: diversify.

From the biggest dealers to smaller firms, the key to generating revenue has been pursuing new clients in different ways.

Dealers have been forced to adapt throughout the industry because of weaker demand.

Total U.S. sales of office furniture dropped 29 percent last year, to $9.23 billion, its lowest level since 1994, according to the Business and Institutional Furniture Manufacturer’s Association in Grand Rapids, Michigan.

“The dealers that are most successful are the ones well-diversified and who went into this downturn with a strong balance sheet,” said Chris Bates, president of the Office Furniture Dealers Alliance in Alexandria, Virginia.

For W.B. Mason, a $750 million company, the downturn was a chance to build up its staff and prepare for the eventual rebound.

Overall sales last year were flat, a big departure for a company accustomed to annual growth rates of 20 percent to 30 percent. Sales figures include office supplies other than furniture.

“Being around over 100 years, we’ve seen the cycles,” said Chris Giannetti, a W.B. Mason branch manager in Albany, New York. “When the cycle is down is when you prepare yourself. It’s always going to come back. Get all the people in place to be ready to handle the influx of business.”

Over the past year the company hired an interior designer, an experienced saleswoman, a sales manager, and support staff to aggressively go after larger, “contract furniture” deals.

Those are projects that involve more than just supplying desks, chairs, and file cabinets. The clients are starting with a blank slate by redesigning offices or moving into new space.

“We had the opportunities [in the past] but we didn’t have the infrastructure in place to support it correctly,” Giannetti said. “We just didn’t have that contract team in place.”

W.B. Mason invested about $100,000 to retrofit a furniture showroom in Albany. The company also added a 5,000-square-foot section at its warehouse for used and scratch-and-dent furniture.

Officials saw an opportunity in the used market because many clients didn’t know what to do with their old furniture. Now W.B. Mason resells it for pennies on the dollar, generating a new revenue source.


Read more: http://www.portfolio.com/executive-style/2010/08/03/recession-prompts-office-furniture-suppliers-to-offer-new-services/#ixzz150gyeGhR