I.O. Metro Rolls Out Franchises

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Jay Howard, a 26-year-old who has spent his short career selling himself, now is selling franchises for the company he founded.
But I.O. Metro sells itself.
A $250,000 investment in 2005 turned into more than $5 million in sales in 2006 for the Rogers-based home furnishings retailer. And sales are expected to more than double this year as it begins franchising — regionally first, then nationally.
Howard, the Diet Mountain Dew-sipping CEO of I.O. Metro LLC, doesn’t want to spread too thin too quickly. At first, any metropolitan area more than a day’s drive away will be out of the question. That means turning away East and West Coast investors who want I.O. Metro franchises. Even Houston may be too far for now, he said.
“From the first week we opened, we’ve been getting a ton of inquiries about franchising,” Howard said. “It’s very hard not to say, ‘Let’s run with this. Let’s go open 20 stores.’”
Importing eclectic furniture and accessories from 14 countries such as India and Portugal, I.O. Metro has been building its core business with stores in Bentonville, Rogers, Fayetteville, Little Rock and Tulsa. Prices are comparably lower than similar stores thanks to Howard’s retail background schooling him in international trade.
Howard learned how to cut out the middleman — where furniture markups occur for most retailers — and go straight to manufacturers. All items sold in the franchises will be purchased from an “ample supply” at I.O. Metro’s 27,000-SF distribution center in Bentonville and shipped using JHM Trucking of Rogers. The company has 5,341 total items, with more than 2,000 of those currently stocked.
“I never thought we’d be where we are already,” Howard said.
Clearly there’s money to be made in the industry. Pier 1 Imports, a store that buys merchandise from more than 50 countries, reported $1.78 billion in sales in fiscal 2006 from its 1,183 stores.
Unlike many young companies, I.O. Metro is not seeking capital investors, only franchisees. Howard projects 8-10 franchises will open by the end of 2008 and he hopes to have 36 stores by the end a five-year plan.
The initial franchise investment is between $500,000 and $600,000. Howard said the high-paced nature of the business is rewarding for franchisees, but requires “a lot of energy.”

Breaking In
One of Howard’s biggest breaks came after he wooed top Wal-Mart Stores Inc. vendor recruiter Cameron Smith, who is not an easy sell by all accounts.
“We told this lawn and garden company that if you really want an-up-and comer, give this guy a chance, and he set the hook,” Smith said. “Then he took that same trust into Wal-Mart, and they drank the Jay Howard Kool-aid too.”
I.O. Metro is an equal partnership between Howard and Bill and Helen Benton of Jonesboro.
Howard said Bill Benton, who has 40 years of business experience, helps keep his youthful enthusiasm grounded.
Benton said it was Howard’s knowledge of international trade that won him over on the I.O. Metro concept.
“It’s been fun and it’s very exciting, but you can’t do it without good people,” Benton said. “We have to manage growth. We have to walk before we run.”

Baby Elephant
Speaking of running, one of I.O. Metro’s most unusual items to date was a hand painted, life-sized baby elephant that was used in the TV show “The Amazing Race.”
It was made by an Indian factory and sent to I.O. Metro after the show aired. The mammal model sold “in a matter of days” to an office in downtown Little Rock for $3,999.
That’s high for typical I.O. Metro merchandise. Dining tables, for example, range from $299 to $999, about half of what the items fetch at other stores.

Curious Jay
In only three years, Howard graduated magna cum laude from Westminster College in Fulton, Mo.
At 21, the Helena native joined Jimco Lighting Co. of Jonesboro and promptly grew the company’s Target Corp. account. He said he slept in his own bed “about seven days a month” while traveling all over the country.
Once hitting a ceiling of sorts, he moved to Northwest Arkansas to try to land a job with a Wal-Mart supplier. That’s when Cameron Smith and Associates of Rogers was contacted.
While most vendors have at least 15 years of experience, the bright-eyed 22-year-old warranted what Smith said are overused labels as “a candidate who walks on water” or a “walking invoice.”
“There’s some people who are just wired differently,” Smith said. “When we met him, we were overwhelmed. He just lit up the room with his personality, intelligence, confidence and overwhelming maturity for a 22-year-old.”
Howard had a job after one interview.
But maintaining that company’s one product in Wal-Mart as its lone local staffer grew monotonous. So without the company’s knowledge, he grew the account the only way possible — getting into Sam’s Club.
Howard said he called the Sam’s Club buyer “every day, if not every other day,” until winning a meeting and eventually a spot on the shelves at Sam’s.
That aggressive drive is why Smith said I.O. Metro’s “mind-blowing concept” is catching on. Howard still calls Smith often for advice. They even golf and attend football games together.
“I don’t normally get close to clients, especially those who are the same age as my kids, but we’re friends,” Smith said. “His enthusiasm is contagious, and he’s a sponge. He’s constantly giving me a barrage of questions, even when we’re golfing.”

Metro Madness
Kathy McCray and Lauren Christmann left promising and established careers to become part of what Howard calls his “A team” of original staffers.
“It took me one weekend to decide I was moving here (from Kansas City),” Christmann said. “That’s when we had a 150-SF office at the back of the store. But I was able to tell then that something big was going to happen, and I wanted to be part of the ride.”
That ride often drives 12- to 14-hour days that start with meetings each morning to ensure “everyone’s on the same page.” Communication, organization and dedication are vital to the company’s success, Howard said.
“Even on a snow day, we go to Jay’s house and work ’til midnight,” McCray said. “But we have a lot of fun. That’s the main thing.”
The decision to start the company was made “in about four hours,” and plans for expansion were made much easier after the Bentonville location hosted a “VIP Party” on March 14, 2005. It drew about 500 people, and not a stitch of merchandise remained when it ended.
“It was just, ‘Wow,’” Howard said. “When we sold out and couldn’t even check everybody out, this is when we thought, ‘Maybe this isn’t just a Bentonville thing.’”
It certainly wasn’t. Every store has been successful and a large part is due to site selection, the key for any retailer. That’s why Howard wants to expand slowly instead of just putting up stores wherever a franchisee owns a piece of property. Building design, customer care and choosing correct markets is what will keep I.O. Metro’s reputation positive.
No matter how much success he experiences, Howard’s fresh face makes it difficult for some to believe. But most meetings that start as a tough sell turn simple after a few minutes of exposure to Howard’s infectious energy.
“When I’m talking to a developer about this concept, they look at me like, ‘You don’t look old enough to buy a glass of wine. What are you telling me this for?’” Howard said. “I get prejudged pretty often, but I usually have them turned around real fast.”