By Chris Sorensen - Monday, November 12, 2012 - 0 Comments
The surprise $700 million tie-up between two of Canada’s best-known furniture retailers—Leon’s and The Brick—is being touted as a defensive move in the face of an all-out assault by U.S. big box retailers. They include Target, which is set to begin opening Canadian stores next year. “During these economic times where we have seen multiple American corporations make inroads in our country through acquisitions, it is a pleasure to see two successful Canadian retailers reach such an agreement that will better serve Canadian consumers,” Terry Leon, the CEO of Leon’s, said in a statement announcing the friendly deal.
There is, however, no “category killer” coming across the border that threatens either Leon’s or The Brick directly—at least not in the near-term. Target, Wal-Mart, Home Depot and Lowe’s all sell furniture or major appliances, but it’s not their core focus. Even Ikea, the ultra-successful Swedish furniture chain, isn’t considered a big competitor by analysts because it caters to a different type of customer who is looking for cheaper, do-it-yourself furniture and storage solutions.
Instead, the marriage of Leon’s and The Brick appears designed to boost the profitability of two entrenched Canadian players. In the case of The Brick, the biggest threat to its business until recently has come from its head office in Edmonton. The company nearly bankrupted itself during the last recession when a sales slump was magnified by bad product decisions and poor inventory management. Founder Bill Comrie had to step back into the picture in 2009 and help organize a turnaround that included installing a new management team. Vi Konkle, who became CEO last January, has spent the past two years painstakingly rebuilding The Brick’s back-end operations so that the chain can better match its product inventory selection with customer demand.
While the Brick posted a $3.1 million loss in the second quarter, the most recent period for which figures are available, it was mostly due to the repayment of debentures leftover from its financial restructuring. Leon’s, meanwhile, recorded a 20 per cent drop in earnings to $9 million during the same period, which was blamed on higher marketing costs. Both companies are facing reduced demand from consumers as the Canadian housing market cools.
Under the purchase agreement, Brick and Leon’s will continue to be run as separate brands. The cost savings—and, therefore, increased profitability—will come mostly from the increased heft that comes from buying on behalf of both banners. Both chains will also get a boost when it comes to selling over the Web, a growing business, since they will be able to rely on each others’ distribution networks to get sofas and coffee tables in the hands of online customers.
While all of that will no doubt leave Leon’s and The Brick better prepared to do battle with U.S. big box stores, the question is whether regulators will see the deal as something that actually benefits consumers, or reduces overall competition in the marketplace. It may not be a slam dunk. Hence, both sides have an incentive to talk up the threat from south of the border—even if it hasn’t fully materialized yet.
By Chris Sorensen - Thursday, September 6, 2012 at 2:54 PM - 0 Comments
Turns out the jingle, “Nobody beats the Brick” was far from the truth
The Brick is known across Canada for its overstuffed furniture, gleaming appliances and commissioned sales staff. The home furnishings retailer’s merchandise is neither high-end, nor particularly trendy—and it’s often touted in television ads by a breathless announcer who gushes about limited-time sales. The straightforward formula was pioneered by an unlikely businessman: would-be professional hockey player and Edmontonian Bill Comrie (who is father to not one, but two former NHLers). And it hasn’t changed much over the past four decades.
That is, until recently. Eagle-eyed shoppers may have noticed a few differences in the Brick’s stores over the past few years. The furniture looks more modern, the colours more current, the selection improved. And, odds are, the marked-down sofa advertised in the flyer will actually be in stock.
Much of that is the handiwork of Violet Konkle, who was appointed CEO in January. A former Wal-Mart Canada executive, Konkle was brought in two years ago to help oversee a turnaround of the 41-year-old company. At the time, the Brick was just recovering from a financial near-death experience brought on by a combination of the recession and, experts say, a case of poor management. The effort to rescue the tired chain was initially led by Bill Gregson, now the Brick’s executive chairman, who is also credited with salvaging the once struggling Forzani Group (now owned by Canadian Tire). “He had asked me to join to tackle a number of issues,” says Konkle before listing off virtually every element of the Brick’s business, from its vast inventory and supply chain to customer service.
By Jason Kirby - Monday, February 7, 2011 at 2:53 PM - 5 Comments
Forget the Billy bookcase—Danish retailer Jysk will sell you the Danny for 15 per cent less
The iconic Billy bookcase from Ikea helped transform the Swedish retailer into a global giant, cemented its reputation as the go-to source for stylish, inexpensive knock-down furniture, and made Ikea’s Scandinavian founder Ingvar Kamprad a billionaire.
Billy, meet Danny. In the Jysk Bed Bath Home store in Surrey, B.C., the Danny bookcase stands amid oddly familiar looking futons, desks and chairs. Never heard of Jysk (pronounced Yisk)? It’s a Danish retailer that’s emerged as a global giant, is known for inexpensive knock-down furniture, and has made its Scandinavian founder Lars Larsen a billionaire. Oh, and with the exact same dimensions and style as Billy, Danny just happens to be 15 per cent cheaper, too.
Jysk: the poor man’s Ikea.
Over the past 15 years, Jysk has plotted one of the stealthiest, albeit quirky, retail invasions in Canada. From its Canadian head office near Vancouver, the discount chain operates 40 stores from coast to coast, yet has almost no national brand recognition. Now, while the retail world is abuzz over Target’s impending arrival from the U.S. in 2013, the Danes are plotting a hyper-expansion of their own here. Jysk is set to open at least 20 new stores a year over the next three years in a bid to make Jysk a household name. “We’ve survived and thrived for 15 years by offering Canadians quality for the lowest price,” says Ludvik Kristjansson, the CEO of Jysk’s Canadian operations. “I see no limit to how much we can grow.”
By Anne Kingston - Monday, November 29, 2010 at 3:20 PM - 1 Comment
Koi fish coordinated with the woodwork? Barbra Streisand’s epic home reno out-Marthas Martha Stewart.
A few years ago Barbra Streisand was in crisis: the stonework on her primary residence was a tad too pale. So she turned to America’s doyenne of home betterment who, of course, had a solution. “Martha Stewart told me that if I brushed it with cow urine and buttermilk it would turn darker,” Streisand writes in her new book My Passion for Design, a glossy coffee-table tome that chronicles the painstaking creation of her four-house Malibu compound—and gives new meaning to the term vanity press.
The legendary performer, said to insist that rose petals be floating in the toilet bowls of her hotel rooms, felt sullied by the thought of bovine pee. So she ignored Martha’s advice, choosing instead to plant ivy and climbing roses to mask the offending rocks.
Streisand is famous for her obsession with detail (before appearing on The Oprah Winfrey Show in 2003, she insisted a black microphone be painted white so as not to clash with her ivory Donna Karan outfit). Her insistence on privacy is equally legendary, which makes the arrival of this over-the-top show-all so surprising. In 2003, she slapped an environmental preservation group with a US$50-million lawsuit for uploading an aerial photograph of her former clifftop estate. The case was thrown out but gave rise to the “Streisand effect,” the term used to describe the viral publicity generated when someone tries to quash online information.
By Alex Shimo - Thursday, May 21, 2009 at 8:00 AM - 3 Comments
Cardboard’s being used to make everything from footbridges to cribs. Caution is advised.
Designers and celebrities have a new eco-sustainable, authentic material to champion: cardboard. Long derided as a “hobo’s IKEA,” it’s being used to make, among other things, furniture, handbags, pianos, even bridges. There are horse-print cardboard wall coverings in the changing rooms of Stella McCartney’s Paris store; English actor Colin Firth’s London-based furniture shop sells corrugated cardboard chairs, and the elite design firm Vitra offers Frank Gehry’s “Easy Edges” cardboard line.
In the upscale Toronto restaurant Mildred’s Temple Kitchen, cardboard stools complement leather sofas with suede and satin pillows. Designed by Vancouver-based Molo, these iconic “Softseating” pieces are now in the permanent collection of New York’s Museum of Modern Art. Installed in the restaurant last November, the stools no longer look new: cardboard tends to look “pretty beaten up” very quickly, says restaurant manager Jane McMahon, which is “apparently part of the appeal.”
By Patricia Treble - Thursday, September 25, 2008 at 12:00 AM - 0 Comments
Crate & Barrel finally expands to Canada as the U.S. market slows
This is the time of year that Canadians on the hunt for moderately priced design-savvy home furnishings face a conundrum. They can go to Ikea, which dominates the sector, to see its new models, but will have to battle through the seasonal back-to-school chaos that envelops the mammoth outlets as parents and students alike scour the 300,000-sq.-foot stores for inexpensive Ivar shelving, Lycksele sofa beds and Forsytia bedspreads. Not fun.
Competition to the ubiquitous blue-and-yellow behemoths is coming, however. On Sept. 25, Crate & Barrel will unveil its 35,000-sq.-foot two-level outlet in the upmarket Yorkdale mall in Toronto while West Elm, the younger, more hip and urban line from the makers of Pottery Barn, will open on Oct. 16 in a 20,000-sq.-foot historic building located a few kilometres away. For both brands, this will mark their first foray outside the U.S.
Crate & Barrel was “pulled up to Canada,” explained CEO Barbara Turf, by Canadians who shopped in their 158 U.S. stores and wanted an outlet north of the border. The firm’s products “can compete with Ikea and go up,” says Turf. “Young, old, modern and transitional customers can find something because we’re a little bit broader.” Its products run the gamut from cheap and cheerful tableware to Italian-made buffets and hutches costing $1,399 each. And while Allen keys are necessary for some ready-to-assemble items available at the store, bigger items will be delivered with its white-glove service that includes not just assembly but also packaging removal.
For West Elm, its Toronto location in the middle of a rapidly condo-izing area of the downtown core was a way to differentiate itself from the other home decor chains. With its global-style mix of modern, organic and ethnic, president Dave DeMattei wants to attract customers who appreciate its “youthful attitude.” So West Elm’s Parsons bookcase is priced at US$349, a matching cube side table retails for US$159, while a set of two autumnal hand-blown glass gourds are US$34. (West Elm hasn’t released Canadian prices.) “We’re a speciality version of Ikea,” says DeMattei. “We’ll lay out rooms for you with designers on staff.” And though a lot of the inventory will be on location in flat-pack boxes, employees will load customer’s vehicles.