Even though owner Andrew Covington started his furniture store business at the front end of the worst economic downturn in several decades, he’s seen solid growth every year.
Covington Holdings Inc., dba Ashley Furniture HomeStore, was launched in 2007. In 2011, it posted revenues of $23.8 million, up nearly 40 percent from 2010 and more than 118 percent higher than 2009 revenues.
“Every year we’ve had double-digit increases,” Covington says. “It’s fantastic, especially during a recession.”
The company, which started with one store on East Independence Road in November 2007, now operates four locations in Missouri and Arkansas, and more than 120 employees. Covington credits the company’s growth to its business model and to being able to work with a family member to save on overhead expenses.
According to
AshleyFurniture.com, Arcadia, Wis.-based Ashley Furniture Industries works with 400 HomeStore locations that are independently owned and operated through licensed operating agreements. Covington says the company’s manufacturing power gives a pricing advantage, since the stores don’t have to negotiate price breaks with manufacturers based on the volume of furniture they buy.
“Instead of buying 100 tables, I can buy one for each store, and they are already at wholesale volume prices,” Covington says, adding that when a customer places an order, the piece is shipped after the sale.
Covington had worked as a regional director for a pharmaceutical company for about 12 years before his uncle – who runs Memphis, Tenn.-based Spencer Enterprises – pitched the Ashley Furniture model, convincing Covington there was money to be made in the furniture business.
“My uncle actually has 13 other Ashley Furniture stores in the South,” Covington says. “So, we are able to share costs on advertising and planning. We have the same accounting staff. Our (chief financial officer) is the same between our companies, so that shares a lot of expenses that we would normally have to pass on to the customer.”
Covington says the company also focuses on service after the sale, contacting customers 30 days after a purchase to see if they’ve been satisfied with their experiences. Based on ratings the customers give, the store where the purchase was made can mold and shape its selling practices to better serve buyers as well as compete with other Covington or Spencer stores.
David Swensen, vice president of Ashley HomeStore in Springfield, says he thinks the company’s focus on customer service and its display of complete room sets allows it to maximize sales. Ultimately, though, people respond to prices.
“The thing that really separates us is that we are a one-source furniture retailer. We go only through Ashley, and there’s no middleman,”Swensen says.
In addition, Covington’s stores – located in Springfield, Joplin, and Rogers and Springdale, Ark. – pick a charity each month to support through the company’s First Friday donation program.
The program offers 22 percent off all items in its stores to those who donate at least $20 to the selected charity for the month, and then it matches those donations.
Since the program began, Covington says the company has raised several thousand dollars for area charities.
Swensen, who has worked with Covington Holdings since 2007, says he likes having part of the company’s culture focused on giving back to area charitable organizations.
“What is neat is that we are now starting to have charities reach out to us,” Swensen says. “There really is an awareness gathering.”
Now that the economy appears to be improving, Covington is eager to see how the company’s sales will perform.
“If this is what’s its like in the bad times, we’re really looking forward to the good times,” he says.
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