Swallen's office furniture grows - discount store chain

Discount Store News, March 6, 1989 by Mary Ellen Kelly

Swallens Office Furniture Grows

CINCINNATI -- Swallens is projecting a 10 percent to 15 percent sales increase in its home office furniture business this year.

The seven-store, full-line discount chain is already the highest-volume office furniture retailer in the greater Cincinnati market, claimed buyer Clarence Stephens.

The chain keeps its office furniture customers coming back by providing personalized services to business customers, from hooking up telephone systems to delivering stationery and coffee filters.

And now, Swallens might decide to pursue furniture sales to office building contractors which would accelerate already strong sales growth.

"At present, we're not set up for that type of thing. We're considering getting into it," Stephens said regarding the office building business.

Larger Sales Staff

The first step would be hiring a larger sales staff. "We'd need the right people to run it for us. We've been looking. Right now we're selling to the guy who wants a few pieces tomorrow, not a large number next year," he explained.

Swallens would also have to face the reality of much lower profit per item to gain those sales. "Margins can go down to as low as 5 percent in some cases," Stephens said.

A 20-year veteran of Swallens, Stephens has been a buyer for the office furniture category since he first joined the regional discounter. Since his arrival, the amount of space devoted to the category has doubled, to as much as 26,000 square feet in three of Swallens' largest stores.

Overall store sizes range from a single 30,000-square-foot outlet unit to a 223,000-square-foot combination food and general merchandise store. Unlike all other discounters, most Swallens stores are cube-shaped, three-and four-story buildings. The company also operates a marine supply center and a lumberyard across the street from one of its original stores, founded in 1948.

The majority of office furniture is sold to small businesses, but a good portion goes to home office shoppers. "Sales are divided about 40 percent home office and 60 percent for doctors, lawyers, and other professionals who want to buy their own furniture rather than go into an already decorated office complex," Stephens said.

The office furniture is predominantly assembled goods, but a small amount is ready to assemble furniture.

"We try to stay away from RTA, except when it comes to some computer and typewriter stands. Customers don't want to set it up. At one time we sold some RTA desks, but they were too hard for one person to handle. The person couldn't flip it over once he got the legs on. We'd end up having to send someone out there to put it together. It became too much of a hassle," he explained.

The Hon Co., which is based in Muscatine, Iowa, is Swallens' largest office furniture supplier in total dollar volume, Stephens said. He works with other vendors to fill in gaps in both style and durability options which the company might not provide.

Despite the high price tags of its merchandise, all Swallens furniture is priced to be at least competitive with--if not below--any other retail source. Hon furniture, for example, is usually sold at a 25 percent discount off of the company's suggested retail price.

"All of the office furniture that our company sell is discounted, regardless of how many pieces the person purchases," Stephens explained, noting that the company does offer its customers volume discounts.

Contract Division

The Swallens contract division exists to service its small business customers. Small appliances, major appliances, floor coverings, staplers and any other small business needs can be ordered by phone at any Swallens locations.

In fact, each business is given the name of a specific person who is their contract representative. Delivery is available at a flat rate, regardless of how many items are ordered.

The goal is to live up to the company slogan: "Anything you want, everything you need from one source."

Swallens' success in office furniture during the past two years is partially due to reduced competition, Stephens acknowledged.

"Our sales haven't slowed down. We're lucky that two large furniture retailers in the Cincinnati market went out of the furniture business, including McAlpin's and several smaller stores. If we get a new chain in here, there's no telling what might happen," Stephens confided. Leugers, Gibson and Perin are three of Swallens' strongest furniture competitors in Cincinnati.

PHOTO : Swallens, a full-line discounter, also offers its customers the deepest selection of

PHOTO : rolltop desks in the Cincinnati market area.

PHOTO : The bulk of Swallens' office furniture mix are case goods. RTA pieces are sold on

PHOTO : promotion, to generate traffic.

PHOTO : The office furniture category could explode for Swallens if the discounter decides to

PHOTO : pursue sales to office complexes.