Jay Howard, 36, is busy growing his second entrepreneurial home furnishing business and expanding his wholesale line of home products to retailers across the country.
Howard launched Howse in 2015 after selling his interest in I.O. Metro to private equity firms Banyan Investment Partners and Diamond State Ventures in 2011 for an undisclosed figure. Howard stepped away from I.O. Metro in 2012 and worked on wholesale deals for a home furnishings line under the brand Harp & Finial, which is sold at Sam’s Club and Dillard’s and 600 retailers. He then began to have former customers and employees ask him to re-consider opening another retail store akin to I.O. Metro in Northwest Arkansas and Little Rock.
After Howard exited I.O. Metro, the retailer moved the headquarters from Dallas to Lowell and began to shutter stores from the 21 locations Howard had opened. Last year I.O. Metro changed its name to Erdos at Home, but the retailer recently filed bankruptcy and announced the closure of all the remaining stores, with furniture liquidation being handled by a federal bankruptcy court. The reason given for the financial trouble was “unprofitable stores.”
“I had so many loyal employees who had been with me for a long time calling me and asking me to think about another store because the demand for higher-end home furnishings continues to grow in Little Rock and Northwest Arkansas,” Howard said. “Former customers asked me to help fill a niche market demand that is alive and well.”
SECOND TIME AROUND
Howse employs 10 in Northwest Arkansas and four in Little Rock. He said they have been with him for about a decade off and on through I.O. Metro and now Howse. He said these are dedicated employees who know the markets and are focused on growing the overall business. When asked what lessons he took from I.O. Metro to Howse, he said the business is run differently today.
“I have a team with lots of experience, and they are invaluable to this business,” Howard said. “We have gotten better with age and learning from the previous venture. One key difference is we are not looking to populate the Southeast with stores right away. We have set goals which have to be met before we can consider any new market expansions. We have true market strengths in the areas where we operate today because we understand those markets and we are focused on those.”
He said since the company opened in August 2015 the goal has been to grow top line annual revenue to $10 million a year in each store. He said there’s a good chance the stores will hit that mark this year and most definitely by 2018. One other key difference in the retail venture is it operates both locations in warehouse districts, which also helps bring down the overall overhead and logistics costs. In Bentonville, the store is at 2714 Otis Corley Drive. The central Arkansas location is at 2200 Cantrell Road.
“It’s the smartest thing we did, because we don’t have a noose around our neck for crazy high rents,” Howard said. “But it has been more challenging for people to walk up and find us because we are located in non-retail locations. We set out to get 10,000 Facebook followers, most of which were organically achieved and not purchased. We have spent very little on advertising because social awareness has done a 180-degree change since I first got into this business. We work closely with area realtors to give discounts to home buyers which are presented at closings.”
This time around, Howard said he worked with IberiaBank to help finance the business along with some personal capital. Another area Howard has observed stark changes in retail is more sales gravitating online. He said unlike apparel and footwear that quickly moved online, furniture is behind the curve.
When asked about the success of WayFair and other online home furnishings sites, Howard said there are major challenges with selling high-end furniture online because of the final mile delivery charge. He said deals for purchasing furniture online have hefty delivery costs built into the price. He believes someone will figure it out, but it hasn’t been done yet.
Howard is working with Fayetteville-based BLKBOXLabs to design a new retail website for Howse as well as a complete marketing plan. He said while it will be hard to sell everything online, there are still plenty of consumers who want instant gratification that comes with taking home a same-day purchase.
“I am still amazed that people come into the store and buy a $3,000 sofa and put it in the back of a pickup so they can sit on it tonight,” Howard said. “We do special orders for people, but we stock a whole warehouse of furniture and home accessories in our two locations.”
In Bentonville, Howse is located in an 8,000-square-foot warehouse which is doubling in size this summer to 20,000 square feet. In Little Rock, the showroom and warehouse is about 20,000 square feet. He said the company may announce something new later this summer in the expanded Bentonville space. Howard also said he is not afraid to gamble on internet-based sales, but it won’t come at the expense of operating full-service retail options, including having a designer come to a customer’s home and make recommendations for furniture based on space, style preferences and budget.
Howard also recently met with Amazon about future opportunities, though he couldn’t elaborate on the plans because of non-disclosure agreements. Howard said he spends about half his time promoting the proprietary line of Harp & Finial, which is a partnership with Southaven, Miss.-based furniture maker and importer StyleCraft. He said StyleCraft is focused on the mass-merchandising retailers, whereas their partnership with Harp & Finial is sold at wholesale to higher-end retailers.
Howard is the curator for the line of products which includes furniture, lighting, textiles and wall decor. He said StyleCraft also saw a niche market opportunity at wholesale for high-end pieces that wasn’t being met. They reached out to Howard to help create the brand and handle the front-end of the business, where StyleCraft has the supplier relationships and back-end responsibilities.
“Calling on retailers across the globe who are interested in stocking Harp & Finial gives me tremendous insight into my own retail home furnishing operations,” Howard said. “Retail is strong, but there are those who aren’t keeping up with the times and dropping off. At the same time, you see others doing quite well.”
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.