The briefing.

THE BOSS' MANAGEMENT STRATEGY

MIKE Pegler was just another hired hand working for a paycheck when he discovered a way to turn years of experience gained on the job into an entrepreneurial opportunity.

Thanks to his background as a sales representative for a major furniture manufacturer as well as time spent managing the warehouse of his dad's furniture store, Pegler and his wife Wendy, came up with the idea of opening a store that sells home furnishings on consignment.

Home Furnishings on Consignment, a 10,000-square-foot store that opened in Westlake Village in 1999, sells everything from sofas to dining room sets to decorative accessories and even jewelry. Most of the merchandise comes from previous owners who have moved, redecorated or just tire of the items. Other things come directly from the factory. They may be items that arrived with a minor imperfection, orders filled in the wrong color or even merchandise delivered past the due date with absolutely nothing wrong with it.

Either way Home Furnishings on Consignment sells its goods for about a third or half what it would cost in a traditional store.

Unlike the drawbacks of a traditional furniture store, Pegler doesn't have to carry an inventory of goods on his balance sheet -- he only pays those who consigned the merchandise once it sells.

But the trick, says Pegler, is in the selections.

Pegler spoke to Business Journal Senior Reporter Shelly Garcia about the unusual niche he found.

"Ninety percent of furniture comes from the Southeast and, when it ships to California, there are no returns. The freight charges are too expensive. So there is a pool of merchandise always out here that needs to be handled. It may have the slightest ding, but it's not new, and there is no network of retailers that can handle that kind of thing. So for years, I saw this opportunity.

"When I take something on consignment I have to compete with retailers that have up-to-date merchandise. Everything I take in here is hand-selected and I turn down a lot. Westlake is a family area so we sell a lot of traditional things.

"Since we split (the proceeds) 50/50, we both have a vested interest in getting the best price. We take things in for 90 days. The things I haven't sold (in that time) people get it back or we donate it for them.

"The neat thing about this business is our traffic is two to three times what a normal store would be. We go through a third of the store in a week. The constant change generates traffic.

"This location will be moving into a 20,000-square-foot store by early summer. After that, I've got locations selected throughout L.A. and Ventura County to expand, and I'm talking with people who are looking to invest and help me grow.

"When I go into a second location, I have to get a larger truck, I have to invest in payroll and it takes capital. I've really done well here, but we're constrained by the space."

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