When Gary Steinhafel looks back at what has happened in the furniture industry over the years, the picture looks pretty grim.
Steinhafel, who serves as the CEO of the three-generation Steinhafels Furniture company, started working in the furniture industry for Wickes Furniture in 1977. He then managed a Wickes store in Itasca before leaving the company to become a wholesale rep from 1981-91.
Steinhafel has watched as many established furniture companies closed their doors. Wickes. John M. Smith. Wieboldt's. Plunkett.
"Up and down the Fox Valley, there were furniture stores in every town. They're all gone," said Steinhafel.
How has Steinhafels kept its doors open since 1934?
"The ones that are strategic have survived," said Steinhafel.
Steinhafels opened its first Illinois store in Vernon Hills in 2011. It was there that on Nov. 9, Steinhafel spoke with dozens of local business owners during the GLMV Chamber of Commerce Fall Business Stampede.
"Candidly, it's often a big challenge to put a big box in municipalities," said Steinhafel. He said when the company first expressed interest in building a superstore in Vernon Hills, the first person who reached out to him was Mayor Roger Byrne.
Byrne said he drove up to Waukesha, WI, to meet with company leaders. He had already heard great things from residents, who said they liked to visit the company's Kenosha, WI, store.
"We entered into a tax rebate agreement to help bring Steinhafel's to town," said Byrne.
The Vernon Hills store, Steinhafel said, is "doing great."
The company's first superstore was in Madison. Steinhafel said the goal is for each subsequent store to be better than the last.
"I really wanted this store to be special," he said of the Vernon Hills location, adding that the company spent over $6 million transforming the store.
"We're really happy to be in this community," said Steinhafel.
Industry-wide, however, there have been challenges, Steinhafel said. It's an $80 billion industry, with Chicagoland making up about $2.5 billion of that industry.
"Our industry has undergone some pretty tough times," he said. At the end of 2007, the furniture business flat.
"We (the furniture industry) were one of the first to feel the effects of the bad economy," said Steinhafel. Revenues fell between 8.5 and 9 percent in 2008, and about 9 percent in 2009. While Steinhafels was a $118 million company in 2007, just two years later that number had dropped to $93 million.
"This is not an industry where you can cut to a profit. You've got to grow sales," said Steinhafel. "We really, as an industry, have had to work and fight hard."
Furniture, he said, is a business that's stressed for a few reasons. Furniture is a big-ticket item, Steinhafel said, and people tend to buy furniture because they want it, not because they need it. Furniture is also tied to the housing market.
Steinhafel said furniture stores are also finding themselves competing with alternative channels, like big-box retailers, warehouse clubs and the Internet. Free-standing stores now sell only 53 percent of the furniture sold in the country.
Weathering the Financial Storm
Steinhafel said it's important to avoid sitting around and whining about the bad economy.
"Denial is not a strategy. We have to grow our business," he said.
Surviving the economic downturn, he said, didn't involve a "magic bullet."
"You've just got to do a lot of things right," he said.
Steinhafel said there are a few factors that have contributed to his company's success, including strategic planning and reputation.
"Probably more than anything else is our culture," said Steinhafel. "We're open. We're honest. We're transparent. We don't hide things. Our culture is family-friendly. We have fun at work. We have a culture of working hard and playing hard, and it has served us well."