Business Spotlight: Raw and Restored

When Gary Rostic purchased Wood You Furniture in May 2011, he was looking to build a more solid future. His first year in business signals he might just be hitting the nail on the head.

The 15-year-old Wood You Furniture store sells unfinished, custom and factory finished furniture and cabinets, and provides restoration services for older pieces. The Springfield store offers a variety of woods – including oak, maple, pine and cherry – as bookcases, bedroom and dining room sets, kitchen islands, and desks.

Through Rostic Holdings LLC, Rostic purchased the business a year ago for $200,000 from Jim Montgomery. Wood You recorded $410,000 in the eight months Rostic ran it in 2011, and he is projecting $725,000 in 2012, his first full year at the helm. In 2010, Rostic says the store sold $550,000 in products and services.

Since taking over, Rostic has renovated the 7,000-square-foot store and warehouse on East Battlefield, brought furniture finishing in-house, modernized technology and acquired a delivery truck for the business.

“We kind of shudder when a new owner takes over because we never know what will happen,” says Fred Edgington, a sales representative for Whitewood Furniture in Millville, Mich., one of Wood You Furniture’s suppliers.

That hasn’t been the case with Rostic and Wood You. Edgington says sales for furniture with his company have increased since Rostic purchased Wood You, but he declined to disclose by what percentage.

Build on
Rostic had worked in residential construction after moving to Springfield from Pittsburgh, 12 years ago, when his wife, Kelly, took an anchor job with KOLR-TV news.

At its peak, his company, Tara Homes Inc., was building eight to 10 houses a year. The recession hit in 2008, and Rostic’s construction company only completed two houses that year and had to go into remodels to keep the business afloat.

Rostic, who also owns The Tool Bonnet, a company that provides weatherproof covers for the construction industry, started looking for ways to diversify.

The Rostics worked with Laura McCune, a Kingsley Group business broker to find a business to purchase, and Rostic felt his construction experience would make a good fit with Wood You.

Springfield’s store opened in 1997 as a franchise of a Florida-based parent company. Rostic says Wood You Furniture’s parent disbanded in 2008, allowing franchise owners to continue on their own.

The Rostics purchased Wood You for $200,000, using $50,000 of savings for the down payment and a U.S. Small Business Administration-backed loan through Liberty Bank for a remodel and the remainder of the purchase. Rostic says he spent another $10,000 for the business license, utilities and incidentals to complete the transaction.

Rostic and his wife are now estranged, and he says she no longer holds ownership in the business.

Turning it around
When Rostic purchased Wood You, it primarily sold unfinished furniture, and customers had the option of purchasing factory finished pieces or going to a local contractor for custom finishing.  The store also contracted deliveries.

“When I analyzed the business, I thought too much was being given away to contractors,” Rostic says.
 
Rostic began handling deliveries immediately, using trucks and trailers from his construction business, and he saved $7,500 by fall to purchase a used delivery truck for the store.

The company charges a $35 to $50 fee for deliveries outside of Springfield, and Rostic says that is not a big revenue generator. “It’s all about customer service and what we can offer that other stores do not,” he says.

He also hired two employees with finishing experience, and in the remodel and rebranding effort, Rostic had the logo, Web site and Facebook page revised to better market the finishing services. “The store had a previous reputation as a country or lodge type furniture store, and while we sell that type of furniture, we also sell all types of finishes and styles,” he says.

Rostic plans to finish the rebranding effort this year by installing a new outdoor sign.

He says sales of unfinished wood furniture remains 85 percent of the business. Custom finishing, which allows customers to match new purchases to older pieces or cabinets, is now 12 percent of sales, while factory finishing is 3 percent of sales.

Bookcases, dining room and bedroom sets are top sellers. Rostic says furniture prices range from $499 for an unfinished parawood drop leaf dining set with six chairs, to $3,500 for a higher end set. Custom or factory finishes add approximately 40 percent to the price of the unfinished piece.

“Since Gary has taken it over, he’s tried to market it differently,” says Maddie Lee, inside sales manager with Bellfonte, Pa., supplier Woodcraft Industries. “I really think he is motivated and with the addition of customizing pieces and his construction background, he has a lot to offer so it truly is a full-service store.”

Rostic says Wood You is venturing into kitchen cabinets and islands, and a full kitchen display should arrive at the store within a couple of months.

Last month, Rostic added restoration of older pieces. “People kept calling us every week asking if we did that, and other stores were even calling us,” he says.

Jeff Smith, of Ozark, is a longtime Wood You customer who won a free restoration when Rostic put out a call on the company’s Facebook page for the first test customer. Wood You refinished a hand-built antique chest of drawers Smith’s great-grandfather brought from Sweden in the 1890s.

“It looks really good,” says Smith, who works as a marine sales representative for S.M. Osgood Co. “I usually buy unfinished pieces from them, but I don’t think I will ever waste my time finishing them myself again.”