Fostering Closet Clientele from Fancy to Frugal
One Florida shop owner offers closets with everyone’s pocketbook in mind.
By Lisa Whitcomb
Creative Closets Inc., of Fort Lauderdale, FL, originally began in 1992 as a part-time secondary income source for Peter Duarte, whose primary career was as an electrical engineer. However, “Within two years, I realized that it was something that I should pursue full-time,” Duarte recalls. “When I originally started the business [from my garage,] I anticipated that it would be part-time. I never anticipated that it would be a full-time business,” he says.
Coming from New England, Duarte was relocated to Florida in the late ‘80s to work for the marine electronics industry. But the industry proved to be shaky and required quite a bit of international travel on his part. It was during one of these overseas business trips when Duarte met a man in Holland who owned several small businesses that combined had provided a replacement income for him. “After I saw this,” he remembers, “I decided to make it my personal ambition to start three businesses over the next five years with the idea in mind that they would one day replace my current income.”
Duarte looked at businesses that would require minimal warranty work and not require a complete staff of extremely skilled workers. Then, on the advice of friends and family in the construction trade, he took a serious look at the closet business. The initial financial analysis looked good and he decided to try it as his first business venture.
Closets, more so than kitchen cabinets or bathroom vanities, have proven to be an attractive business option for Duarte because, “Closets are an in-and-out business,” he says. A closet can generally be installed within a couple of days, and there is very little subcontracting involved,” he says. However, “The commitment structure is entirely different than doing a new kitchen, bath or remodeling of those rooms. For me, it’s a cleaner business,” he adds.
By 1994, Duarte saw the fruition of his entrepreneurial efforts beginning to pay off and decided that he would not need to start up the other two businesses after all.
Today, his company serves the local community and surrounding counties and exports materials to a shop owner on the island of Nassau in the Bahamas on a regular basis. Duarte advertises Creative Closets as a manufacturer of closets, offices and garages, with closets being the mainstay of the business.
Duarte’s shop occupies a 4,000-square-foot facility and he has six employees. The company grossed over $1 million in sales last year. Historically the shop always matches its entire previous year’s revenue by the close of the third quarter and the fourth quarter is seen as growth. “This year we will have to wait and see what happens after the tragedy (on September 11). The last few weeks of our business have been flat,” Duarte says.
Up until five years ago, the average cost of a household closet system was about $2,500 or less. At the time, Duarte says he was in the business of purchasing pre-drilled and edgebanded products for his clients. “But our customers needs became more specialized. Now they require more specialized panels and veneers and things of that sort,” he notes. So Creative Closets began offering its clients high-end custom closets. “I realized that there were very few shops [in my area] that were offering fully customized closets,” he says.
While the bulk of his shop’s revenue comes from the lucrative custom closet market in Broward County, FL, Duarte still wants to offer more affordable options for other clients who also may want closet systems installed in their homes. Duarte explains, “I have realigned my market strategy into what I call ‘ABC closets.’ ‘A’ is my economy or low-end version, ‘B’ is my mid-level, and ‘C’ is custom high-end closet systems that cost over $5,000.”
“As the business stands today, I still install some wire shelving for builders, but I do not take on any new wire shelving projects, which is the shop’s very low end,” he says. “The bulk of my business still comes from producing medium level closets that are $1,000 to $3,000 in price.” He adds that about 25 percent of the shop’s time is spent making closets over $3,500.
The shop has been privy to constructing some unusual closets. To date, it has had the opportunity to turn several plain play/video room closets into partial entertainment centers. The wall looks like an entertainment center, but when you open the sides up along the TV, it is still a closet, says Duarte. Even more fascinating than those closets are the “safe” rooms that the shop has installed behind closet walls to keep people in the home safe from intruders.
New home builders and empty nesters make up the majority of the shop’s clientele, and Duarte says that it is not uncommon for a high-end closet remodel package to cost $20,000 to $30,000 in a multi-million dollar home. “The shop recently finished a project where the master bath and closet budget was $100,000. The most expensive closet system that [Creative Closets] ever made cost $38,000. It was made from mahogany veneer and shipped to Mexico where it was installed by the homeowner,” Duarte recalls.
The shop most often uses walnut, maple and mahogany veneers. Duarte says he usually does not have call for anything else. Maple veneer is predominantly used because of the variations it allows in staining and finishing. Sometimes the shop will mix wood-grain melamines with natural wood fronts, which can be stained to match, as a way of upgrading a closet system for a client without astronomically increasing the cost.
Darker wood veneers like mahogany, dark cherry and walnut seem to be the growing trend right now in Florida. Presently, he is working on a dark ash veneer closet that is so dark it is the color of espresso. Homeowners today appreciate the beauty of these woods, says Duarte, and will generally only ask for a clear finish or a simple stain. “We are getting back to more traditional looks,” he says.
Duarte also notes, “People are trying to get away from using laminated particleboard. We have more requests today for veneer closets than we have ever had. Our customers are very educated and they critique our designs accurately. I don’t recall ever installing a high-end closet for a customer that hasn’t had a built-in before, or for one who doesn’t know specifically what he needs and wants,” he adds.
Details such as crown moulding, glass, lighting, mirrors, stone tops, islands, safes, jewelry cases, sweater drawers, slanted shoe racks, ironing boards and tie butlers are just some many items that are being installed in today’s high-end havens. “To me,” Duarte says. “A high-end closet is one that has all of the details that a customer knows he specifically wants, provided that he has the space to handle it.”
Economy closets right now are generally constructed from a light melamine and feature white wire baskets. But baskets have an application in high-end closets as well, Duarte says. He generally uses either stainless steel or chrome-plated baskets. Duarte says that drawers with open or scooped fronts are also a very popular item.
After deciding to pursue the custom market full-time, Duarte began purchasing his own manufacturing equipment and design software. He uses Cabinet Vision Solid for processing closet jobs and has the shop’s designers, one of which is himself, carry laptops so they can design smaller jobs on site.
Installed in his shop is a Striebig Automat panel saw from Colonial Saw Co., a Brandt KD 56 edgebander from Stiles Machinery, two Grass Econo presses, an SCMI 10-in. table saw and several Jet and Delta dust collectors, which must accompany each machine per county law. Duarte says the shop also does some cut-to-size work for three other shops in the area.
The shop’s newest machine is an Ayen LBM 32-23D line boring machine from High Tech Industries, which has two heads with hydraulic braking that allows the heads to through-drill without breaking through the panel, says Duarte. Creative Closets makes its custom radiuses and does its special drilling on a Morbidelli CNC boring machine at a neighboring shop. The shop outsources all finishing, veneering and stone tops, but does its own deliveries and installations.
Creative Closets purchases many of its specialty items from other sources, but it also manufactures many of the items used, such as hidden drawers, dividers and valet bars. Customers are offered a selection of door and drawer pulls and handles, and if they have something else in mind they either purchase it themselves or Duarte will procure it for them.
“Creative Closets doesn’t use inexpensive hardware. We take pride in our work and the hardware that we use,” he says. “We use Grass, Hafele and Accuride products.” Most drawer boxes are Grass’ Zargen metal box system.
Occasionally, the shop has a call for wooden drawer boxes, which the shop will also make. But Duarte says that he prefers the Zargen system because, “there is very little need for adjustment. Once we installed a job with 35 of these drawer boxes, and we didn’t have to adjust any of them because they were all machined perfectly.”
In the closet industry, timing is essential to survival, Duarte says. “We generally install on top of new carpeting, and when the carpets have been installed that means that a house is within a week or two of closing. Customers are looking for us to be in and out before they close. Listening to what the customer wants, and delivering when and what we are supposed to is what contributes to our success,” he says.
Another way that Duarte provides exceptional service to his clients is to provide kits to customers who purchase economy closets and want to do the installations themselves. He says he also maintains a high standard of quality by using what he calls “a basic statistical process control” in the shop. With this process in place he can track all of the internal failures and rejects through a feedback system. This allows any problem to be corrected quickly, which helps to ensure that it will not happen again, he says.
Most importantly, Duarte says his shop is flexible when it comes to what his customers want. “We offer a lot more flexibility to our customers than our competitors do when it comes to material sizes, heights, widths and designs.” Closets are a very specialized room in the home, he adds. They are built for the height and weight specifications of the homeowner contracting the closet. For example, a closet built for a six-foot-tall ball player would not work very well for a five-foot woman.
Duarte advertises his shop in designer magazines, home shows and mall shows. But the majority of his business still comes from repeat clients, referrals and word of mouth.
Like many custom shop owners, Duarte says he has a hard time finding good employees. First, he says he will ask around, and if this does not work, he will advertise in the local paper. “We bring a new employee in based on his initiative to learn, regardless of his experience level. We start the employee on a probationary period for two weeks because we are a small shop, and it is important that he is a good fit,” he says.
Currently, Duarte is considering moving north to West Palm Beach County in the next couple of years. He has decided to make the move because the Broward County area is fairly built out and has a glut of building permits that go through 2003. He believes that farther north is where the bulk of the closet business will be for his shop in the next 10 to 20 years. He adds that he would like to pay off his machinery by then as well. “Our motto is ‘debt free by 2003.’”
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