Badcock fills a niche with Kids Korner

A century's old track record and an uncommon business model spell success

Lisa Casinger, April 1, 2008

In 1904, Henry S. Badcock started the first W.S. Badcock store in Mulberry, Fla. Today there are more than 300 locations across the Southeast and about 75% of those stores are dealer owned and operated.

Vignettes, like this one featuring Holland House furniture, get dressed up with bedding, a canopy and accessories.

Vignettes, like this one featuring Holland House furniture, get dressed up with bedding, a canopy and accessories.

The owner of the Auburndale store (see sidebar) uses his own Florida Gator memorabilia (not for sale) to liven up this Holland House group.

This Wood Crest loft system, dressed with Southern Textiles bedding, is one of several youth displays in the 300-square-foot youth department at the Auburndale store.

Youth furniture sales account for 4 to 5% of the business, about $20 million, and Badcock is ranked No. 22 on Furniture Today's 2007 Top 100 with sales in 2006 at $498.5 million, up 5.2% from 2005.

The retailer has remained a family-owned business. In 1920, the founder's son, Wogan Stanhope Badcock Sr., bought the store from his dad for $9,000. Ten years later he increased sales by consigning merchandise to area collectors who sold the goods from their trucks. The collectors started buying buildings to show their wares in and that was the start of the dealer owned and operated stores that are still the bulk of the business.

By 1960 Badcock grew to 46 stores and Wogan Badcock Jr. joined his father in the business; he was named president of the corporation in 1963. By 1984 there were 200 stores throughout Florida, Georgia, Alabama, South Carolina and North Carolina and in 1985, Wogan III, Henry and Ben, Wogan Jr's sons, were appointed vice presidents of the company. Wogan Jr. turned the company over to his sons in 1992 and died four years later. The company hired Don Marks in 1998; Marks is the first non-family member to be appointed president.

In 2000 the company revamped its image and went from W.S. Badcock Furniture to Badcock Home Furniture & More. The new concept includes brighter, more spacious displays, a new logo and an expanded product line (patio furniture, bedding, including its own line of beds, appliances, electronics, accessories and floor coverings), to appeal to a broader customer base. Of the stores that have converted to the new format, most have seen at least a 20-70% sales increase.

The Badcock dealer concept is unique in that it's not a franchise but more of a hybrid. The merchandise is consigned to the dealers and there is no franchise fee involved so it has the benefits of business ownership without the lengthy start up process of a traditional franchise. Dealers are provided with account financing and operational support that allows them to own their own business with dramatically reduced risk. The dealer contract was updated in 2003 with new operating standards and methods for enhancing the long-term growth opportunities for dealers. That year dealers also gained eligibility for Small Business Administration financing and were officially listed on the SBA's National Franchise Registry.

Badcock offers training and mentoring programs for dealers to help them with everything from site selection to store design and it has ongoing workshops and seminars. The biggest difference between a Badcock dealership and a franchise is that it requires less capital expense and has a quicker start up timeline.

Gary Wiggs, vice president of the merchandising category and manager of youth and occasional divisions, has been a champion for Badcock's youth program since its inception.

The Florida native started with the company 30 years ago part time in the collections department. He's worked his way through the company and credits Wogan Badcock Jr. as a major influence on his career.

“He knew the furniture business inside and out,” Wiggs said. “He made you want to do your best. Work hard, be honest and treat customers fairly — that was his motto.”

About four or five years ago the goal was to open freestanding Kids Korners (the youth side of Badcock's business) and Wiggs was spearheading those efforts when the company decided to open rental stores first. Wiggs changed gears and came up with templates for a youth department depending on space available in the stores.

“Youth has been a strong category for us,” Wiggs said. “Our stores are averaging $700-900 a square foot in youth sales. We've been up 1.5-2 points a month in this category, despite the economy. Our other top categories are appliances and accessories.”

Wiggs wears many hats in his position and one of those is that of the youth case goods buyer. He also develops and maintains the templates for the youth departments, is responsible for the replenishment of the supply chain, works with stores to handle complaints and issues, reviews and manages inventory, develops promotions for the youth groups and in his spare time, he's visiting factories in Asia and dealing with product development.

Though Badcock relies on vendors such as Holland House and Standard Furniture, it also does some of its own product development as a way to differentiate itself in the marketplace.

“We try to avoid any type of royalty or licensing deals, though,” Wiggs said. “I don't think that's who we are.”

Working this closely with the factories, conducting consumer focus groups and paying attention to market trends enables Wiggs to react quickly to the changing market place and consumer demands. For example, he sees armoires becoming less important as consumers turn more and more to flat screen TVs. He also says loft units for kids' rooms are growing in popularity since parents can get the essential three s's — sleep, study and storage — in one footprint.

Wiggs is working on some different looks for Kids Korner including a retro youth group that's transitional enough to appeal to a young tween as well as the 20- to 25-year-olds. He says they've found that while the majority of their youth furniture is going into youth bedrooms, there's also a growing market for smaller spaces, second homes, etc.

One thing that's enabled Wiggs to be more hands on with the product development and design is his continuing education. This May he'll receive a civil engineering degree and he says the process has been instrumental to improving his understanding of how furniture is made and how slight changes can make big differences.

The most enjoyable part of his job Wiggs says is “hearing our dealers tell me they like the product selections I purchased and that they're selling.”

Badcock draws customers in the door not only with the breadth of its product selection but also with in-store financing and with frequent circulars (every 60 days) and direct mail. Wiggs keeps an eye on inventory so he's able to rotate the promotion of his 15 to 20 youth groups in the circulars depending on how well product is moving.

The biggest challenges, he says, are keeping product flowing efficiently and dealing with damages. He credits his team for the success of the youth program at Badcock.

“We're a big team so I can't honestly take credit for any one single idea,” Wiggs said. “I may plant a seed but I have a very talented team and they help nurture the ideas and see them develop.”

Kids Korners are expanding as more dealers see the growth in the category. Wiggs' goal is to take the $20 million business to the $30 million mark in the next 12 to 18 months and he still sees free standings Kids Korners, with broader product selections, in Badcock's future.

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