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R C Willey.


On a Magic Carpet Ride

Think of R C Willey Home Furnishings, and furniture probably comes to mind. But R. C. Willey himself never sold a stick of it. He started the business in the 1930s selling refrigerators, ranges, and other appliances door-to-door in Davis County.

He built a 600-square-foot building next to his Syracuse home in 1950 to display his wares without intending it to be a retail outlet. But the display became popular with customers. And the R C Willey retailing business began.

R. C. Willey died in 1954. Bill Child, his son-in-law and third employee, took over and heads the firm to this day.

Child added furniture lines in 1957. Today, approximately 60 percent of the firm's sales come from furniture and home furnishings. The remaining 40 percent is generated primarily from electronics, such as appliances, stereos, big-screen televisions, camcorders, and computers. The company now sells exercise equipment as well.

Expansion is an integral part of the firm's philosophy. Sales for 1990 were close to $100 million. Because of the addition of two stores during the past year, as well as samestore growth, sales for 1991, according to Child, should burst into the $140 million-to-$150 million range. Its sales represent over 20 percent of the local market, more than twice that of its nearest competitor.

The firm will be in or near the list of the 20 largest furniture and appliance retailers in the nation this year. Its competitors on this list include the likes of Levitz and Ethan Allen, which have dozens, even hundreds, of stores nationwide.

The little store in Syracuse has become a behemoth. Starting in 1957, and continuing for many years, that store was expanded virtually every two years. It now covers approximately 100,000 square feet. R. C. Willey's house is still next door, and it is rented to a member of the Child family.

Store No. 2, located in Murray, wasopened in 1969 with 25,000 square feet. Expanded seven times since, it now has 90,000 square feet of display space under one roof. In 1985, West Valley became the site of the third store and, two years later, a clearance center was added next door. Late in 1990, the firm moved into Utah County for the first time with its Orem outlet.

Moving Corporate Headquarters

A major move was made in February of this year when the company opened its 370,000 square foot, $15 million facility in South Salt Lake. This huge building has a retail outlet with about 78,000 square feet; the firm's new corporate headquarters offices, with 30,000 square feet; and about six acres of warehouse space. More than 850 people now work for the firm. Headquarters were moved from Syracuse to the Salt Lake Valley so the company would be in the center of the Wasatch Front's population base, reports Child.

He says the next expansion step may be outside Utah.

The furniture and electronics business is different from many in that as much money can be made from the financing of sales as from the profit on the items themselves. This is true of R C Willey. Child claims, though, that while financing is very lucrative, R C Willey's financing charges are lower than most of its competitors. It can charge less because the firm has a AAA credit rating which lets it "borrow at considerably less than prime," says Child.

The Importance of Customer Service

Child considers customer service the key to success: "Our basic philosophy has been to treat our customers properly, give them full value, and give them more than what they've come to expect."

For example, all merchandise is sold with an unconditional guarantee of customer satisfaction. The firm's buying power allows it to get deals on products, manufacturers' promotions, and transportation costs. This way, it can provide unusual value on the products it sells.

Inventory turnover rate is another measure of the firm's efficiency. Its inventory turnover rate is five, meaning it sells and replenishes its inventory five times during the year. The more turns the better. A low turnover rate indicates inventory is sitting around and not being sold quickly. Child wants to get his turnover rate up to six. What's so special about this? The industry average is only three, he reports.

A look at the firm's revenues per employee is also revealing. Revenues per R C Willey employee is about $165,000; the industry average is just $100,000. In the average R C Willey store of 418,000 square feet, sales per square foot total $146,000.

National Attention

"We've had people from all over the country come here and look our company over to get ideas," says Child. It's easy to see why, with its fast-track growth and high productivity, the firm is getting national recognition.

This major retailer is family owned. "All of the family members are committed to the success of the business and are working hard in their positions," said Child. "They assume the same roles and responsibilities of any other associate in the positions they hold. They are not promoted or advanced because of their stock ownership."

This no-nonsense view of what's best for the business helps explain Child's success. Innovative, willing to change, and relishing risk, he knows what's needed to make his firm a success.

"I see a lot of people who, when they get a little older, start reminiscing about how it was in the past," says the 59-year-old Child. "The past is past and the future is different, totally." This clear-eyed vision promises to keep R C Willey the dominant furniture retailer in our state well into the next century.

Based in Salt Lake City, Alan S. Horowitz writes about business and computer topics.
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Title Annotation:Aggressive expansion and product line diversification proves successful for R C Willey Home Furnishings
Author:Horowitz, Alan S.
Publication:Utah Business
Date:Oct 1, 1991
Previous Article:The retail sector: how the industry fares in Utah.
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