Closet & Storage Concepts designs, manufactures and installs a variety of custom closet and home storage products for garages and other rooms. Its brand More Space Place, acquired in 2013, is America’s number one retailer of Murphy beds. Combined, the company has more than 400 employees and 37 locations nationwide, positioning Closet & Storage Concepts / More Space Place as one of the largest companies in the space-saving home furnishings and improvement industry.

IWF CLOSETS SYMPOSIUM

Tips for building new business opportunities

On August 23 Bob Lewis, Closet & Storage Concepts CEO, will share his experiences building and growing a successful brand and company during an all-day panel discussion at the 2016 IWF Closets Symposium, which will be held during the International Woodworking Fair in Atlanta, Georgia.


As one of the leaders in the industry, the company is planning to expand on its newly developed concept of showroom-only franchises; a concept that doesn’t include the traditional model of opening a franchise in a light industrial area with a manufacturing facility. Its target showroom is 2,000 to 2,500 square feet and is typically located in a traditional retail shopping center. Part of the reason for this new option is to not only provide more flexibility for more franchisees, but also to better reflect the closet and storage market and the various product lines now available.

Located in Scottsdale, Arizona, Closet & Storage Concepts’ first showroom-only model uses a fellow franchisee in Longmont, Colorado, to manufacture its product orders, opening up a new revenue stream for that location.

“Look at what we were all doing 25 to 30 years ago. We were cutting white melamine into shelves and partitions. That was pretty much the extent of what we did,” says Bob Lewis, Closet & Storage Concepts CEO. “As the product assortment expanded, we’re now doing furniture-type products. We are all in garages now; we are doing wall beds; we are all doing home office systems. As the product itself has evolved, the need for showrooms to show all of these different products has also changed. We are trying to separate the manufacturing center portion from the consumer showroom portion. So this is really more of an evolution of what we’ve been doing.”

By foregoing the product manufacturing component that a standard Closet & Storage Concepts firm would have, the showroom-only model allows new franchisees to get started more quickly with lower startup costs. The option also opens up new revenue streams for the owners of full Closet & Storage Concepts models, who will benefit from the manufacturing business of the new showroom model sales. In addition to the showroom-only model, the company will continue to offer the full manufacturing option to qualified prospective franchise owners.

The size of a Closet & Storage Concepts showroom-only model is approximately 2,000 to 2,500 square feet. These showrooms are often located in traditional retail shopping centers.

At the end of May, Closet & Storage Concepts opened its second showroom-only location in northern New Jersey. The very first was opened last June in Scottsdale, Arizona, by Laurie and Chad Dunny whose decision to buy into this concept also opened up a new profit opportunity for Isaiah and Michelle Rozek who operate a traditional Closet & Storage Concepts franchise, with manufacturing capabilities, in Longmont, Colorado.

“They are manufacturing the products being sold by the Scottsdale franchise,” Lewis explains. “The Rozeks have a very successful and active business in the Denver, Colorado, market but this opportunity to manufacture product for the Scottsdale Arizona franchise is an additional new revenue stream for them.”

“We’re adapting the business model to the marketplace and the skill sets of the owners,” adds Tom Harris, director of Franchise Development for Closet & Storage Concepts. “It allows us to grow much faster because we can offer franchisees a new option that’s less costly and faster to open. Along with our More Space Place stores, franchisees now have three options to choose from, depending on their market, their demographics, the initial investment they’re interested in making and their own long-term growth objectives.”

The showroom-only concept also is driven by consumers. Consumers really want to see those products live, Lewis says. “It’s not enough to be an in-home sales model anymore. Plus, there are so many different finish options now. We offer approximately three dozen finishes on a standard basis. Not to mention all of the different options in thermofoil doors and drawer fronts, different styles of those products and all of the various accessories. They’ve evolved the accessories part of the business so much that it is just not possible to show everything we can do to a consumer in an in-home sales setting like we used to. We really need to have that showroom if you are going to participate in the entire industry now. That’s really the message, and if you are going to meet the consumers on their terms, you need to be in that model.”

Lewis acknowledges that there are pros and cons of both models. With the manufacturing concept you are able to control your own destiny as well as your own schedule, he says. And if you design or measure something incorrectly or you have a part that doesn’t fit, it’s a lot easier to make a replacement part very quickly if you have your own shop. But the flip side of that structure is that it requires more capital and labor costs, he says. “And if there is another economic downturn, and God forbid we ever have another one like the Great Recession, you can’t lay a machine off. If you’ve got those machines and they are not operating on a full schedule, you’re spending money that you are not getting a return on. 

“We work hard to help our franchisees succeed, and that’s one of the keys to the company’s overall growth,” Lewis adds.

On August 23 Lewis will share his experiences building and growing a successful brand and company during an all-day panel discussion at the 2016 IWF Closets Symposium, which will be held during the International Woodworking Fair in Atlanta, Georgia, at the Georgia World Congress Center. www.closetandstorageconcepts.com
 

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