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Showroom Showcase

Growing in a Slow Economy

At a time when many retailers are closing stores, Paddy O’ Furniture just opened its fourth location in the affluent city of Scottsdale, Ariz. Owners and brothers Phil and Tony Schindler have experienced many ups and downs during their 19 years in the outdoor-furniture business and have learned one important lesson: have a plan. “You need to set yourself up for long-term success,” Phil says. The brothers run their multilocation, multimillion-dollar retail chain with forethought and precision. Nothing is left to chance.

Humble Beginnings

The Schindler brothers grew up working in a family-owned indoor-furniture store in Minnesota. Tony started Paddy O’ Furniture in 1988 by renting outdoor space in different nurseries in Phoenix to sell the then-popular PVC furniture. After Phil finished college in 1991, he joined his brother Tony and they opened the first Paddy O’ Furniture brick-and-mortar retail store in Phoenix. “In that first store, we just put the furniture on the showroom floor, with no thought of merchandising,” Phil says.

As the business evolved over the years, it became more sophisticated, from the quality and selection of products to merchandising and back-end support. Paddy O’ Furniture is now one of the premier upscale outdoor-living retailers in the Phoenix area, with impeccable showrooms and personal service that its competitors envy. The Schindlers have four locations, 50 employees and a new corporate headquarters (with a 45,000–square-foot warehouse and clearance center) to support their growing business.

Know How to Grow

“When you own more than one store, you have to think about your business differently,” Phil says. “You can’t wing it.” As they expanded their stores, the Schindlers knew that they had to expand their operational support as well. The brothers hired a full-time visual merchandiser to keep the showroom floors at all four stores looking their best at all times.

They also added a full-time designer to help customers plan their outdoor spaces, a sales trainer (who also does all the hiring) and a customer-service person who exclusively handles all customer issues so that the sales staff can focus on selling.

“As we grew, we also realized that we had to be more organized and needed to write things down,” Phil says. He’s worked hard to create procedural manuals covering how to do everything from putting a sale into the cash register to handling a return or issuing a gift certificate. “When we hire new employees or an operational question comes up, there is one place for everyone to go,” he says.

In 2006, the brothers opened their new corporate headquarters and warehouse. Even with everything in place, Phil is the first to admit that it’s not easy to run a multistore business and that he’s always thinking one step ahead.

Location, Location, Location

The competition in Paddy O’ Furniture’s market has become intense. There are patio-furniture stores in almost every shopping center in the area, and they are not just mom-and-pop shops but well-known chains, including Robb & Stucky Patio and Paddock Pools, Patios and Spas.

“In order to compete, we really need to have multiple stores and they need to be in A-plus locations,” Phil says. People won’t drive far to buy their outdoor furniture because there are so many choices. “A good location is your best advertising,” he says.

Phil explains that it’s been a difficult year so far because Arizona is being hit even harder by the housing slump than some other regions are. Although the new Scottsdale store is off to a good start, Phil says that the company is keeping the operational reins tight. To stay a step ahead of competitors (who are always eyeing the best locations), the brothers secured the Scottsdale location a few years ago, not knowing what the economy was going to be like.

“We don’t have the luxury of waiting to see how good the market is before we open a store; we just have to stick with our plan and ride it out,” he says. Phil remembers another tough time, in 2001, when the company opened one new store and moved another at the time of the September 11 terrorist attacks. The business was not shaken, however. “With good planning, you can gain market share during the bad times and do even better when the good times come back,” he explains.

Phil attributes Paddy O’ Furniture’s success over the past 19 years to having a business plan, staying organized, avoiding opening stores too quickly and being prepared for growth. “We’ve invested a lot of time and money in our business, and we feel like we’re ready to grow over the next five years,” he says. “It’s a good feeling to have.”

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