Premier Home Furnishings; Balancing the Rent to Own and Retail Worlds

After 13 years of working my way up to management in the rent-to-own industry, I decided to put a spin on success. I saw a future in offering retail and leasing as well as rental options in a store devoted to home furnishings. Doing this would change the way I had operated for years in RTO. There was no ready model for this type of operation. No rules to follow. But as my idea began to hatch, I met Premier’s president/CEO, Trooper Earle, and discovered he was interested in this concept and was willing to blend his expertise in business start-up and franchising with my RTO experience and determination to try something new! He and I agreed that together we would find a way to make my idea successful. I got to test it by opening my first Premier home furnishings store in Clinton, Iowa in 2005, and it has sustained continuous growth with no sign of letting up.

A divergence from both RTO and retail, this venture was at first an experiment. My concept of a home furnishings store required that it would operate differently in many ways. I needed more square footage for a larger showroom floor than an RTO store so that I could feature a greater variety of medium-end to high-end merchandise. I felt a home furnishings operation also must offer more financing choices to the customer than either a typical rent-to-own or retail store does, so my customers can finance what they buy through us or work out a lease-to-own arrangement. But above all what has distinguished my vision of home furnishings is its allure to a very diverse clientele, and with that has come the need for different kinds of relationships with my customers than is traditionally found in RTO or retail.

What appealed to me at first about this home furnishings concept was the premise that the customer leads. I let the customer tell me the direction he wants to go in with his selections. I don’t want to require a customer to buy a whole living room or bedroom group. Conversely, if an individual should choose to get more product than he might as a typical RTO customer, I want to be able to handle it. Many of my clients are not be necessarily driven by cash or credit constraints. Therefore, it is important to eliminate the customer’s stigma surrounding rent-to-own and still offer a competitive price for higher end merchandise.

By adding retail and in-house financing programs, we can safely say that there is no transaction we cannot handle. We can match any furniture competitor with any configuration of lease-to-own or loan packages. Because our clientele is varied, we need to be skilled at dealing with a variety of needs.

For me, this business is above all about people and building a relationship with customers —providing satisfaction through excellent customer care. It offers tremendous flexibility in the way we can service customers. While this flexibility reflects retail, a retailer may only interact with a customer once or twice. An RTO dealer, on the other hand, will work with a customer on a monthly basis, as well as his relatives and neighbors. That dealer develops a much stronger relationship than a retailer does. Adding a lease option brings another type of customer relationship to the mix. A successful home furnishings operation must take into account every type of customer and be prepared to meet his needs.

After the performance of my store in Clinton, Iowa proved so positive, Premier Home Furnishings was born, and I agreed to be president of this new Premier company. I wanted to market a unique recipe for success for this hybrid opportunity and roll out something that was more than a one-store wonder. I wanted to enable others to achieve the same success. And that has been an important focus for me.

Other Premier Home Furnishing stores have opened around the country and are doing well on both coasts and in the Midwest. The great work of the past half year for me has been to prepare to open a 19,000 square foot flagship home furnishings store in Davenport, Iowa in May. This store will serve as the ultimate home furnishings prototype and a proving ground for future dealers who want to know that the Premier model works in all demographic environments. We started in Clinton, a town of around 33,000. Another store in Maquoketa, Iowa serves approximately 5,500, while Davenport has nearly 125,000 people.

Following the grand opening of Davenport, my plan is to take my concept and franchise it to other markets and other RTO dealers as well as current retailers looking for an opportunity to expand their revenue base. It will require educating these seasoned professionals who have been entrenched in their specific industries. Typically retail guys and RTO guys don’t understand each other. They have different mind sets. So the challenge will be to help them adopt a mindset that embraces both. We are more than a typical retailer and more than a typical RTO dealer. And that is reflected in how we treat customers, how we select merchandise and how we make sure we have the appropriate finance package so no one leaves the store without a way to get what they came through the door wanting.

When Home Furnishings first started out, we cautioned potential dealers that more upfront capital would be required for a home furnishings store versus an RTO store. That holds true somewhat. Capital may be more, but not astronomically more. There are higher volumes of inventory and a larger show room to expense. But a high initial outlay is quickly made up because home furnishing dealers can get more injection of cash flow from the retail purchases and in-house financing to more quickly see profits.

As Premier company, Home Furnishings brings increased buying power to the table for Premier dealers, including those in RTO. Naturally, as part of the Premier group, home furnishings dealers benefit from the exceptional franchising support that has become Premier’s trademark. Human resources, advertising, business plan preparation and legal advice are just some of the reasons to be affiliated with this great organization. Premier is unique in its philosophies about business ownership and the related importance of customer service, and that fosters creative opportunities to put talent to use and let success grow. Home Furnishings is proving to be a great example.

Premier Home Furnishings is a different kind of business than what people are used to running. We feel we can offer a great tool for experienced dealers to be successful in the future, whether they want to open a superstore or something smaller. And they have the potential to continue to grow as long as they are able to manage that growth and take care of customers.

The national office of Premier Home Furnishings is located in Williamsburg, Virginia. All Premier stores are independently owned and operated. Visit Premier’s website at www.premierhomefurnishings.net or call (800) 2-Premier and ask for Jim Schebler.

John has done it all in RTO, beginning 20 years ago as a summer delivery driver for a major RTO company in Milwaukee. Last year when he decided to go into business for himself, he was a regional director with 48 stores. He had seen others start their RTO businesses but wasn’t ready until a colleague, Jim Schebler, opened the first Premier Home Furnishing store and launched a new company in retail for Premier Rental-Purchase.

"I liked Jim’s concept of blending the best of RTO with the best of retail in one operation," said John. "I felt that his vision and what he was doing in his home furnishings business matched my vision and what I wanted to do. It inspired me to start my business."

John acknowledges the differences between straight rental purchase and retail and feels it all comes down to approach. "I knew going from a strict RTO operation into more of a retail environment that also offered a lease option would be different and new. I felt I could operate in both worlds, and that it is actually a good mix for people to shop in. They can get retail or lease options to purchase when they walk in here. I find out what they want and what will fit their budget and needs."

John opened his 15,000 square foot home furnishings store in Rockford, Ill. in January and couldn’t be more pleased with the positive responses from customers. He likes being in business for himself: improving the customer shopping experience; spending more time with his wife, Jodi, who has become his business partner; and making his own business decisions that fulfill his vision for how a business should look and run.

Start-up went smoothly for John. "Premier as an organization was extremely helpful with such things as preparing the business plan. They were very responsive to all questions and needs and helpful with getting start-up supplies, computers, software and getting us started on the new software program."

John has found Premier’s human resources support, including payroll services, invaluable. He also enjoys having the buying power and nationwide contact with all Premier vendors, which put him on a faster track toward opening his store.

"The sky is the limit," he said. "We’ll continue to make our little niche in the world here and continue to grow."

Rose brings to her new Premier business a rare combination of talents: 12 years of furniture retail experience in Southern California with a major furniture retail company on top of six years with a major RTO organization. She felt opening a Premier Home Furnishings store was a natural fit, and she launched her business with the determination to do for herself what she has spent years doing for others – earning a fortune.

"They were profiting from me," she said. "If I could do it for them, how come I couldn’t do it on my own?" she asked herself. "RTO is very lucrative. There are lots of opportunities."

In thinking about going out "on my own," Rose researched and learned every aspect of the RTO business. While looking for business opportunities, she found Premier.

"I started researching in RTO magazines," she said, "and I saw a Premier article that featured Dave Reed [a former vice president for her former RTO company]." She saw that he had opened a Premier franchise and thought that there might be something to it for a VP to be interested.

"I compared every single RTO franchise there was. I looked at the pros and cons and saw that the opportunities at Premier are better than at other companies. Premier did not cost a lot in start- up or royalty fees. And I believed in the program. Trooper gives us the support and liberty that a big corporation doesn’t. Through Premier we have buying power and the ability to manage things the way we want to – with his support. Premier doesn’t tie your hands. That’s what I like about it. They give the right support and are just a phone call away."

Rose has made her mark in Southern California yet again and this time as a Premier Home Furnishings store owner. In her 7,000 square-foot site, she has captured the essence of the Premier Home Furnishings concept and is putting her experience and genius to work.

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