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Marketing Maneuvers

Fortunoff Teams Up With The Chair King

Through a strategic alliance with The Chair King, a casual retailer based in Houston, Texas, the Fortunoff name (a long-renowned retail icon in the Northeast) is emerging in a new, leaner version with the opening of six Fortunoff Backyard Stores in New York and New Jersey.

One of the largest outdoor-furniture retailers in the United States, The Chair King (under the direction of David Barish, president) purchased a controlling interest in Garden City, New York-based Furniture Concepts, L.L.C. This new entity has the exclusive licensing rights (under an agreement with Fortunoff Brands, L.L.C.) to the Fortunoff brand for outdoor furniture and seasonal products in the United States and on the Internet.

Furniture Concepts will be managed and led by two former Fortunoff executives, Marty Merkur and Bernard Sensale. Isidore Mayrock, a member of the Fortunoff family, has also invested in the new company and has joined the board of directors. Barish will serve as board chair and president of Furniture Concepts.

Fortunoff History

Max and Clara Fortunoff founded their first department store in 1922 in Brooklyn, New York. They soon expanded to eight Brooklyn locations, operating on the principles of offering attentive customer service and a wide selection of household merchandise at low prices. Under four generations of family leadership, the business steadily grew, eventually including over 20 retail locations prominent throughout the Tristate New York region and Pennsylvania.

The chain consisted of four full-line stores that carried every product category for the home, including jewelry, gifts, and outdoor furniture and accessories. As for the other locations, two focused exclusively on jewelry and 14 were anchored by outdoor furnishings. Between the company’s full-line department stores and its freestanding patio shops, Fortunoff’s had a total of 18 locations selling outdoor furniture.

The Fortunoff and Mayrock families sold the business to two private equity companies in 2005. In February 2008, the Fortunoff chain filed for Chapter 11 bankruptcy and was sold to another private equity group, which also filed a Chapter 11 bankruptcy in February 2009.

Moving Forward

Merkur and Sensale both saw an opportunity to bring back the Fortunoff name after the chain closed. “Patio furniture had always been the most successful and profitable part of the business, and we decided it was just too good to let go by the wayside,” Merkur says. After putting together a business plan and entering into discussions with Barish about having the two companies join forces, the business is relaunching as Fortunoff Backyard Store in February 2010.

“Part of our strategy, going forward, is choosing the right markets in which to compete,” Merkur says. “Since we had 18 locations in the past, we went through the roster of our stores and picked the six best locations where we feel the Fortunoff brand has the most meaning built up over all these years.”

In addition to seeing the same locations, shoppers will also be pleasantly surprised by the many other familiar features that they will find, Sensale believes. “In all of our locations, we are using the prior Fortunoff managers of the stores; and in most cases, just about all of the sales associates are the same,” he says. “We think this is very important because it allows us to hit the ground running, with seasoned, experienced help. Some of our people have been selling for over 25 years, so they really know the business, the merchandise, the quality of the product, and—most important—the customer.”

The merchandising concept for the new stores will also rely on a proven success strategy. “The Fortunoff formula for patio furniture was very successful,” Merkur says. “We kept growing over the years because the customers liked our presentation and the value we gave.”

Fortunoff Backyard Stores feature vignettes and settings that create what Merkur describes as the perfect backyard and an inviting environment where someone can see a large variety of furniture. A range of dining, seating, chat, and bar collections from noted manufacturers (including Agio, Hanamint, Woodard, and Mallin) will give customers infinite possibilities for furnishing any outdoor space.

The stores will also feature Fortunoff’s own proprietary brand, The Source®, with products very recognizable to customers. Umbrellas and grills from Treasure Garden, SunGarden, and Weber will complete the look.

The Fortunoff name has always been synonymous with excellent customer service, and that will not change with the Backyard Store. “We plan on being true to the brand, which means serving the customer in the same fashion that we have in the past, including our white-glove delivery,” Sensale says.

Fortunoff Backyard Store offers different price points for many consumer profiles, from the newlywed couple just starting out to the high-end affluent buyer. “We try to cater to all customers’ needs, but we always keep in mind that people today are looking for value,” Merkur says. While customers are seeking a good buy, they will not sacrifice quality. “There is a difference between having inexpensive furniture and offering a good value on quality furniture, which we feel we offer,” he adds.

Spreading the Word

The Fortunoff Backyard Store will use past proven marketing strategies as it launches its new advertising campaign. That approach will include newspaper, radio, and television ad placement.

In addition, under its licensing agreement, Furniture Concepts has access to all the intellectual property of the Fortunoff outdoor-furniture business. “We have the contacts and mailing list of past Fortunoff customers, and we plan on using this to let these customers know we are back in business and to convey our brand, our product, and our promotional messages,” Sensale says.

Rehired Fortunoff employees will also be able to take advantage of their client books to reconnect with past customers. The legendary Fortunoff name has also generated a lot of interest from regional media, whose personnel are eager to report on the many facets of the Fortunoff comeback.

A Strategic Alliance

As head of one of the most successful outdoor chains in the United States, Barish had been planning to expand The Chair King Casual Furniture Stores for a couple of years when Merkur first approached him about investing in the rebirth of the Fortunoff Backyard Store.

“We considered this not only as a good investment, but a strategic one,” Barish says. “It provides an ability to take advantage of experts in New York and Texas, whereby we can use our combined efforts to help each other. It is going to be good for both companies, and that is why we made the decision to go forward with it.”

Sensale emphasizes the importance of the strategic alliance to the success of Fortunoff Backyard Stores. “Marty and I bring much hard-earned experience and a diverse set of skills to the management of our company. It’s why we partnered together. Nevertheless, there are areas where intelligent advice is extremely helpful. No one is an expert everywhere, but we’re all looking for the best solution. In David and his team at The Chair King, we have a cadre of people who can offer advice and insights on many fronts,” he says.

Merkur adds, “This advice comes from people who have operated a highly successful business, so it’s extremely valuable. In our short time together, there are already a number of areas where astute advice has helped us to set up a more efficient operation.”

The Chair King and Furniture Concepts will continue to operate separately, although regular daily communication will take place among Barish, Merkur, and Sensale. “As president and chair, I will act in a supervisory capacity, overseeing the investment and helping whenever I can,” Barish says. “It’s a real partnership in the way we operate. I am very fortunate to have Marty and Bernie there to run the company, along with their executive team of former Fortunoff employees. Every member of it is an expert in his or her field; they know what they are doing.”

The Chair King’s controlling interest in Furniture Concepts should also instill confidence in companies that might have been affected by the previous bankruptcies. “The Chair King’s investment has given more credence to Furniture Concepts and the rebirth of the Fortunoff brand in the New York and New Jersey areas, and to vendors and suppliers who might have been skeptical otherwise,” Barish says.

The revitalized Fortunoff Backyard Stores will provide many opportunities—not only for the owners, rehired employees, vendors, and suppliers, but for loyal customers, who can once again experience all the benefits of being Fortunoff shoppers.

“As former Fortunoff executives, Bernie and I are very happy that we are able to employ close to 100 former Fortunoff employees. We take a lot of pride in being able to do that, and with The Chair King’s help, we look forward to working with our team to return the Fortunoff Backyard Store to a position of market strength and profitability—to build a business that our customers love and our team is proud to be a part of,” Merkur says.

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