February 1, 2010 | last updated May 25, 2012 3:37 pm

Booming Bob's | Homegrown TV Ads And Product Value Doubles Furniture Seller's Growth

PHOTO/STEVE LASCHEVER
PHOTO/STEVE LASCHEVER
Bob's Discount Furniture CEO Ted English stands next to a giant claymation of Bob Kaufman, one of the original founders of the Manchester-based furniture retail chain. Despite the recession, Bob's boosted sales and opened new stores in 2009, bucking the industry's downtrend.
PHOTO/STEVE LASCHEVER
Bob's CEO Ted English, pictured in the company's Manchester showroom, has led the furniture seller's growth in recent years.

When Ted English took over as the chief executive officer of Manchester-based Bob's Discount Furniture in late 2006, his task was to help grow the company.

It was a job description not all too unfamiliar to English, a casually dressed, mild-mannered executive, whose office is located directly off the showroom floor of the company's Manchester store.

As he walks through the showroom, English interacts with employees on a first-name basis, often cracking a joke with them to keep the mood light.

Prior to joining Bob's, he was the president and CEO of the discount retail behemoth TJX Cos.

During his five-year tenure there, English gained the reputation as an innovator, and TJX added more than 900 stores, 50,000 employees and nearly doubled its revenues to about $15 billion.

And now it appears that expertise is translating well in the furniture retail industry as well.

In three weeks, Bob's will open a Long Island store, its sixth New York store and 36th store overall, more than doubling the number of outlets the furniture retailer had in 2005.

Bob's also recently signed a 672,000-square-foot lease in northern Maryland, where it plans to open a new distribution center in the summer. The site will be a hub for new stores in the mid-Atlantic, including in Maryland and Pennsylvania.

Even the Great Recession hasn't held the company back. While many furniture retailers experienced double-digit declines in sales in 2009, Bob's boosted its sales by more than 10 percent.

According to Furniture Today, a publication that tracks the industry, Bob's sales for 2008 totaled $457.8 million, up 9.5 percent from the prior year, making it the 16th largest furniture retailer in the U.S.

English said the company passed the $500 million mark in sales in 2009.

"It's been a tremendous growth story during a difficult economic situation," English said in a recent interview.

"We are in the value side of the business, which generally does well in the down economy. My experience at TJX taught me that if you do well in a recession and treat the customers who find you in the down economy well, then you'll have them as customers when things recover," he said.

English said the company's long-term plan is to add three to six new stores a year. But the new distribution center in Maryland could help spur faster growth, especially in the mid-Atlantic region, he said.

Currently, Bob's stores are in seven Northeastern states, but its only distribution hub is located in Taftville, Conn., a section of Norwich, where the company operates a 1-million-square foot facility that serves all of its 35 locations.

The company's aggressive growth in recent years, however, has stretched that facility to its maximum capacity, English said.

"The new distribution center gives us the opportunity to expand in our existing footprint, and look for ways to go outside of it as well," English said.

Good Deals

Bob's growth comes at a time when the furniture retail industry is experiencing severe pain from the economic downturn. Sales at furniture stores fell sharply throughout 2009, including declining 3.5 percent in December, according to the National Retail Federation.

Jerry Epperson Jr., a managing director at the Virginia-based investment banking firm Mann, Armistead & Epperson and who specializes in the furniture industry, said the weak housing market, tightened credit conditions and high unemployment have spelled trouble for many players within the industry.

"It's a very discretionary business, so we've had problems dealing with the recession," Epperson said.

But Bob's has been able to withstand the downturn because of its value-based business model, said Epperson.

"They don't focus on brands. Instead they go into the marketplace and find products that offer extraordinary value," said Epperson, who noted that the company also has a solid capital base and management team overseeing it. "They buy in such large quantities that they get good deals from the manufacturers, and they can pass those savings onto their customers. The fact that they have their own bedding brand also helps."

Epperson said Bob's has also benefitted from the demise of several large furniture retailers in recent years, including Levitz Furniture store, which filed for bankruptcy in 2007 and closed all of its stores in 2008.

"Bob's was able to move into the greater New York areas and take over that business," Epperson said.

Bob's four top selling stores have all opened in the last three years, and were each located in New York or New Jersey, English said.

English said other keys to the company's success include its ability to quickly turn over its inventory, helped by the fact that its showrooms are not oversized, typically averaging 35,000 square feet.

Quirky Commercials

And of course the company's signature and quirky TV commercials, remain a big part in selling the brand.

The company produces about 600 ads each year, and buys broadcast time for 25 to 30 different commercials per week.

That allows the company to showcase new furniture as soon as it hits its showroom floors, a marketing tactic few other retailers are able to duplicate.

Bob Kaufman, who founded the company with Gene Rosenberg, is Bob's president and still remains the face of the franchise, appearing in about 90 percent of the TV ads.

In 2005, Kaufman and Rosenberg sold a 70 percent stake in Bob's to a private equity firm, which was subsequently taken over by Apax Partners Worldwide.

Apax still owns a majority interest.

Rosenberg remains on the company's board of directors but is not active in its day-to-day operations, while Stan Adelstein, another longtime Bob's executive, is the company's chairman.

"Titles don't mean a lot over here," English said. "We all just do what we have to do to make the business work."

Regardless of who's in what role, Epperson said Bob's is one of the strongest brands in the business, and could soon whet the appetite of more investors.

"They are putting together a company that I think they could take public in a few years," Epperson said.

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