Family business now a regional giant

CNY Business Journal (1996+), Apr 13, 2001 by Eyle, Alexandra

LIVERPOOL - A furniture store could hardly have had a humbler start than Raymour's did when it first opened on James Street in downtown Syracuse, back in 1947. The owners, Bernard and Arnold Goldberg, had no money, no inventory, and no plan. All they had was an idea and a work ethic that they hoped would allow them to support their families.

At least that's how Neil Goldberg, Bernard's eldest son, tells it. And as president and CEO of what is now Raymour & Flanigan Furniture, he should know. But the punchline to Neil's story is that today Raymour & Flanigan is not just bigger - it's the largest furniture retailer in the Northeast.

This month, Neil, his brother, Steven, who is the executive vice president in charge of merchandising and operations, and their cousin, Mike, executive vice president in charge of sales and marketing, will attend the Furniture Industry Awards Gala, where the National Home Furnishings Association will present them with the Retailer-of-theYear Award.

The award is presented in two categories, with Raymour & Flanigan receiving honors in the $10 million or more in annual sales category. Last year, Raymour & Flanigan had revenues of $280 million.

Those numbers are generated by 40 retail locations served by a massive distribution center in Liverpool, and one in New Jersey, which send orders to 12 customer-service centers for delivery to customers in New York, Pennsylvania, Massachusetts, New Jersey, and Connecticut.

Although the firm grew steadily over the years under Bernard and Arnold's leadership, it really started taking off after Neil, Steve, and Mike earned their accounting degrees and joined the firm in the late '70s and early '80s. In 1982, there were four Raymour stores - in Liverpool, DeWitt, Camillus, and Syracuse. That year, Neil, Steve, and Mike bought the company.

As Neil tells it, "We bought it from my dad and uncle, who continued to work, but gradually started to spend more time away from the business."

The new partners focused on several things that would set their company apart: guaranteed three-day delivery, easy credit, full stock, and, most importantly, meeting their commitments to their customers.

By the late 1980s, they had expanded to Oswego, Utica, and Watertown, but 1989 was their pivotal year. That year, they decided that the smaller fish should swallow a bigger fish: On Jan. 1, 1990, Raymour's acquired Flanigan's 14 furniture stores and became Raymour & Flanigan.

"It required a massive amount of energy and management effort to organize the two companies into one," Neil recalls. The partners redecorated all the stores, to make them more home-like, and emphasized to all employees the importance of good customer service. To that end, they began holding Raymour & Flanigan University classes out of their Seneca Mall site in Clay, where every other week they trained or retrained associates in policies and procedures, problem-solving, and communications and rapport building. They have since added two more "universities" - one in Hartford, Conn., and one in Philadelphia.

"If we guarantee a three-day delivery, we must follow through on that commitment," Neil explains. "This really is mostly a service business, and our associates must know how to do what needs to be done."

Realizing that happy employees tend to be productive employees, the partners put together a highly competitive compensation package offering pay that is, as Neil describes it, "generally at the higher end of the industry." They also provide full medical benefits, life insurance, dental insurance, an optional 40 1 (k) program - where the company matches 50 cents for every dollar employees contribute - and profitsharing. Last year, they contributed $1 million to the 401(k) and profit -sharing packages.

Their philosophy is paying off. Sales have grown steadily, from $18.9 million in 1989 to $280 million in 2000. Today, they turn over approximately $5 million in product 22 times a year. An automated inventory system tallies and reorders inventory on a daily basis, keeping both distribution centers fully stocked.

Under Steve's leadership, Raymour & Flanigan's merchandise expanded to include higherend furniture, broadening its market niche to appeal to 75 to 80 percent of the middle-class consumer market.

As the business has spread to five states, Mike has seen that marketing plans blanket each area with consistent advertising, branding ' the Raymour & Flanigan name into consumers' consciousness.

Next week, the company is opening a new store in Whitehall, Pa. In the next 18 months, Neil, Steve, and Mike will open six new showrooms in Philadelphia, where there are currently nine, and two or three more in Springfield, Mass., and New Haven and Hartford, Conn., where there are currently six.

In the meantime, Raymour & Flanigan has added an online catalog to its Web site, www.raymourflanigan.com, and established a link at www. Furniturefan.com, to increase its traffic.

"We've never had a three-year Dr five-year plan," Neil says, "but we do have a desire and willingness to continue to grow throughout the Northeast."