Family-owned Sam’s Furniture is planning more investment in brick-and-mortar retail

Joe Donaldson, head of family-owned Sam’s Furniture in Springdale, dreams big.

He has plans for another business expansion, adding to the nearly 170,000 square feet of showroom and warehouse space the business already occupies along Interstate 49.

Donaldson said the new building would be adjacent to the large retail center and clearance warehouse west of the interstate in the 4300 block of Hidden Creek Lane. The 50,000-square-foot addition will have a small retail space. Still, Donaldson said most of the area will be used as a warehouse for the more than $4 million of furniture inventory he regularly keeps in stock. The new addition is slated for completion by February, built to suit by Mathias Properties, which owns the buildings where the business operates.

Sam’s Furniture is a family business started in 1991 by Donaldson’s parents, Sam and Becky. He said the original store in downtown Springdale was a flea market and also sold used furniture. But it wasn’t long before Sam Donaldson added new furniture and worked to grow the business over the next two decades. The furniture business was the family’s second career after retiring from corporate retail jobs from their time in California.

Joe Donaldson spent 10 years in the Army after graduating from Springdale High School in 1996. After his last tour in Iraq, his parents recruited him to come home and help run the business. It had grown to between $6 million and $8 million in sales by 2006.

In 2009, Sam Donaldson retired, and Joe took the reins running the business. Donaldson said he began to envision an ambitious growth plan. In 2011, Sam’s became the largest furniture store in the state by sales and inventory, but the dream was to go bigger. Donaldson explained the company’s growth mission is not about supporting a more lavish lifestyle for the owners. It’s aligned with giving to dozens of charities and community benefactors each year.

Donaldson said the company’s mission is simple: “To be the best furniture store in Arkansas … while serving others in our community and around the globe.”

He set out to open the largest furniture store in the state. He traveled to Nebraska Furniture Mart in Kansas City, Kan., Gallery Furniture in Houston and other furniture powerhouses to come up with a design that would allow the retail store to also be a place where families can gather and the community can be served. It took him three years to stock enough inventory to open the massive showroom.

In 2016, Donaldson said retail as a destination in Arkansas was limited mainly to Bass Pro Shops/Cabela’s in Rogers. He said he envisioned a megastore that carried a wide variety of home furnishings, predominantly furniture. Families could gather on a Saturday in the fall, kids could play free games in the on-site arcade and enjoy complimentary nachos or hot dogs in the snack bar, while dad watched sports in the “man cave.”

Donaldson’s 120,000-square-foot dream store opened in May 2016. A 50,000-square-foot building offering clearance and promotional furniture items opened in 2018. He said the investment has paid off as sales have grown from $10 million to $22 million in four years. That is void of any online purchases.

“I saw this retail concept working in Houston with The Gallery, and Nebraska Furniture Mart sought out a new location in the Dallas market,” Donaldson said. “These companies are destination retailers and making it work in their respective markets. My dad cautioned me to continue to grow in community outreach proportionately to the growth in our sales and personal lifestyles.”

Aside from regular cash donations to dozens of causes like 2ndMilk for babies in Malawi, Africa, and the Children’s Safety Center of Washington County in Springdale, the company also uses its large parking lot for drive-thru food giveaways. A recent event in June served nearly 400 families.

Each August, the business also honors several local teachers when they are nominated for outstanding works or needs.

“Teachers get such little recognition for their great work, and my dad always sought to give back to them when we could do so. That is a tradition we carry on today,” Donaldson said.

Donaldson declined to give the exact amount of the community giving but said it has grown beyond $1 million annually.

Though his father died in 2017, Donaldson’s mom Becky, his wife Larra and his three sisters all work in the family business. The company has grown to 64 full-time employees, and none of them have been laid off because of the COVID-19 pandemic.

“On the contrary, we have been really busy,” Donaldson said. “The immediate two weeks after the shutdown in mid-March, it was slow. But then we have people coming in to buy desks for working at home, lift chairs for family members they were bringing home from other facilities. Then by the second week in April, we started seeing customers come in to spend stimulus money and spruce up their homes since they were spending more time there.”

Donaldson said sales in 2020 have already surpassed those for all of 2019. That’s helped keep the staff employed.

“We have sold so much inventory the past couple of months, our warehouse is getting low on some items. And we are out of stock on some things,” Donaldson said. “There is a backlog in inventory replenishment, and it’s taking longer to get orders filled at the manufacturer level. It’s a common problem for everyone. My $4 million in inventory is more like $2.5 million now, but I am glad I have it.”

NO ONLINE SALES
Donaldson said he did plenty of research before investing in the massive brick-and-mortar expansion as online companies like Wayfair began to pick up share in the furniture category. While plenty of furniture retailers offer online sales, Donaldson opted out, saying even in 2020, online sales are just 16% of the total category sales. Gambling a bit with the decision, Donaldson noted that early on the company lost some sales to online players, but when the sofa frame broke or springs needed replacing, customers had no one to call.

“Our customers who spend $2,000 for a leather sofa want to sit on it and touch it before they take it home,” Donaldson said. “And should there be any problem with it, we have four service techs who can fix them. The Millennial generation does buy plenty of stuff online, but they also like instant gratification and the idea of buying the sofa or bed and taking it home the same day.”

Donaldson said mattress sales have primarily gone digital since manufacturers have learned to vacuum pack them and send more economically. He said side tables, lamps and rugs are also big online sellers, and that’s why he doesn’t offer many of those products in the massive store.

“We offer the statement pieces in a home like the dining room table, a sectional for the family room or a couple’s first bedroom suit,” he said. “Then we stand by that furniture with service for years to come.”

As a director of retail studies at Texas A&M University and a former Walmart Inc. executive, Scott Benedict said stores like Sam’s Furniture and Nebraska Furniture Mart have thrived as destination retailers. He said there will always be categories where consumers will prefer to shop brick-and-mortar, especially if the experience is superior.

“That said, my only concern is that without any online presence, retailers like Sam’s Furniture do not know what sales they might be missing,” he said. “There are service opportunities and ways to enhance the shopping experience with a strong online presence. Consumers also like to research large purchase items online.”

Donaldson said the company’s website does show customers the various lines of furniture offered, and the financing service is done through a kiosk inside the store through Synchrony Finance and Wells Fargo. He said there is no substitute for personal service given to customers who make the trip to the store. Donaldson believes that will remain true long after the COVID-19 crisis abates.