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Dealers Forging New Formats For White-Goods

NEW YORK – The advent of high-tech and fashion-forward appliances, combined with a quickly changing retail marketplace, have inspired merchants to rethink their approach to the category.

Whether its Samsung-branded shops and kiosks at Lowe’s and The Home Depot, or the debut of majaps at Best Buy’s Canadian stores, this once-staid business is now drawing plenty of attention and prompting innovation by both vendors and dealers.

In this special report, TWICE takes a closer look at three very different majap merchants – the well-established Sears Hometown, the premium start-up Pirch, and a forthcoming “bricks-and-clicks” chain called Star World – and their plans for this rapidly evolving category.

Sears Hometown Revamps Majap Model

Sears Hometown and Outlet Stores (SHO), the nation’s fifth largest white-goods retailer, is looking to rev up its major appliance business with a broad new initiative.

The strategy, which rolled out last month to 51 Hometown stores across 13 states, includes a new, wider product assortment; new merchandising concepts; refreshed fixtures and signage; touchscreen kiosks; and comprehensive training for sales associates.

Under the plan, designed to reestablish the Sears spin-off as “America’s Appliance Experts,” majaps will occupy more than half of the sales floor and will be remerchandised to focus on more fully featured models under the Whirlpool, Maytag, KitchenAid, Samsung and Kenmore brands.

The departments will also showcase complete fourpiece kitchen packages through the creation of three separate mixed-brand kitchen vignettes, and will add a dedicated “innovation area” for multiple laundry lines.

In addition, the chain is upping its associates’ majap chops with increased training and brand-specific selling certification, and is equipping them with wireless tablets to access product and pricing information on the fly.

Customers can also research products and make purchases on newly installed touchscreen kiosks, making Sears Hometown “one of the first national retailers in rural America to integrate tablets into the sales process,” said John Sessoms, the chain’s merchandising and assorting divisional merchandise manager.

“In some of our smaller-square-footage stores we are unable to showcase the entire assortment of merchandise, so having this technology enables our associates and customers to view the wide range of products that we have available,” he said.

Added COO Will Powell: “We rethought the buying process from end to end and created a very unique and positive experience for our customers.” President/CEO Bruce Johnson, formerly interim CEO of Sears Holdings, had hinted at a new appliance plan earlier last month in response to disappointing sales and earnings.

Other components of the initiative include a focus on the top 10 majap brands; a price-match program; and enhancing the entire customer experience, from product selection to delivery.

The revamp is initially being piloted in 51 Hometown stores in Arizona, Colorado, Florida, Iowa, Kansas, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, Texas and Vermont, with grand reopening events slated for April 23-25.

It is unclear whether elements of the initiative will carry over to the company’s Outlet stores, which carry discontinued, scratch-and-dent and refurbished products.

The appliance, hardware and outdoor specialty retailer was spun off from Sears in 2012 and is comprised of 1,260 independent dealers and franchisees. It ranked fifth in TWICE’s Top 100 Major Appliance Retailers Report with $1.6 billion in white-goods sales in 2013.

Pirch Continues National Expansion

Pirch, the six-year-old luxury kitchen, bath and appliance chain, opened its eighth showroom last week, its first in the New York metro area.

Like its larger predecessors in Atlanta, Chicago, Dallas and Southern California, the new 20,000-square-foot store is located in an upscale indoor mall — Paramus, N.J.’s Garden State Plaza — and provides what the company described as “a sensory tour de force.”

Indeed, customers, including decorators, designers, architects and consumers, are welcomed by a barista; a full-time culinary team is on hand for cooking and product demonstrations; and the assisted sales floor features live product displays and vignettes that even extend to the restrooms, where available plumbing fixtures are showcased for the ultimate personal demo.

Majaps span the laundry, floor care, and indoor and outdoor kitchen categories, and include such premium brands as Aga, Bertazzoni, Bosch, Jenn-Air, LG Studio, Lynx, Miele, Sub-Zero/Wolf and Thermador. The chain also offers in-house installation and repair services, and provides kitchen cabinetry, countertop, flooring and design services through on-site partners, marketing director Maria Meeuwisse told TWICE .

“We’re brand-agnostic,” she said. “It’s about lifestyle rather than specifications alone, and want vs. need. Price is not a hindrance.”

The company was co-founded in 2009 by CEO Jeffery Sears, formerly CEO at Barbecues Galore, which operates 70 stores throughout the Southwest. Before that he was president/CEO of Creative Touch Interiors, a builder channel supplier, which was later sold to The Home Depot and became Home Depot Supply, its industrial distributor arm. During his tenure there he grew the business from $17 million to $1.2 billion in annual revenue.

Sears and his team, which includes chairman and co-founder Jim Stuart, have similarly high ambitions for Pirch, which was launched in San Diego in response to “horrible” experiences buying plumbing and majaps.

“Our company was born from empathy and frustration,” Sears said. “Our presence will rewrite how products in the appliance and plumbing industry are viewed by the general public. Pirch is delivering a retail experience that encourages guests to dream about, play with, and ultimately choose products that will improve their lives at home.”

He added: “The products we carry are integral to creating inspired moments, and we believe that the process of selecting them should be just as inspiring.” The philosophy appears in life-affirming aphorisms throughout the showroom, and its execution has led to numerous accolades, including “Most Innovative Showroom” at KBIS’ 2015 Innovative Showroom Awards; a 25th-place ranking on Forbes’ 2015 list of “America’s 100 Most Promising Companies”; and Sears’ inclusion on Goldman Sachs’ 2013 “Most Intriguing Entrepreneurs” list and the National Retail Federation’s (NRF) 2015 “List of 25 People Shaping Retail’s Future,” within the “Disruptor” category.

Expanding when other retailers — notably his namesake big-box chain Sears — are contracting, Pirch has identified 35 major metro markets that are ripe for its model, and plans to get there by opening about three to four stores a year, Meeuwisse said, including its first Manhattan store, expected early next year in SoHo.

Ex-Curacao Crew Launching New Retail Venture

Come October there’ll be a new retail kid in town with a decidedly Latin flavor.

Jerry Azarkman, co-founder of Curacao, the Southwest department store chain, and Rick Hutton, formerly its president, have left the Hispanic-focused business to start a new one of their own.

Their brainchild, Star World, is envisioned as a CE, appliance and furniture showroom in three distinct sizes that, like their old haunt, caters to a decidedly underserved Latino market.

The stores, like their name, will feature a futuristic motif that speaks to the “unlimited potential” of the company and its customers, and will employ a “bricks-and-clicks” model of virtual inventory to keep overhead low and shoppers engaged, said Hutton, who serves as CEO.

Formats will include 30,000-, 10,000- and 5,000-square-foot concepts, with the latter targeting urban and tertiary markets. The smaller stores are where the hybrid bricksand- clicks approach will pack its greatest punch, with interactive, web-based kiosks providing product details and purchase options in lieu of floor models.

The on-demand inventory will be shipped to regional warehouses by vendors and distributors, or dropshipped to the showrooms for in-store pick-up, or directly to customers’ homes.

Merchandise, including mattresses, toys, cosmetics, jewelry and sporting goods, will span the full pricing spectrum, Hutton said, with CE, fueled by 4K TV and audio, comprising 50 percent of sales. (Other electronics categories will include cameras, video games, computers, mobile, car A/V and media devices.)

Star World will also offer pan-category packages that combine, for example, TVs, couches and rugs, and will provide in-house credit to help customers finance their purchases.

The Encino, Calif.-based company will feature competitive prices, but will pride itself on delivering a pleasing in-store experience built around knowledgeable sales associates. To help ensure its customers are wowed, sales staff will receive commissions not only for completed transactions, but for their product knowledge and the customer experience they provide, Hutton said.

While launching into a shaky retail and CE market has its challenges, management believes its trim expense structure and the ready availability of prime real estate are a winning formula.

“We recognize that CE is a tough business, but we still think it’s a great category with a lot of opportunity,” Hutton said. “In no way, shape or form are we giving up on this business.”

To make it work, “we’re being efficient and starting fresh,” Hutton told TWICE. “Successful retailers have to evolve and change. There’s a way to build it to be very competitively priced. Inventory can kill you, but our CE distributors are telling us to think of them as our logistics company.”

Plans call for the first two to five stores to open this fall, followed by a similar number in 2016. Once the model is proven, Star World plans to “ramp up significantly,” and has already identified some 739 potential locations around the country where Latinos are not being served.

“People love to shop,” Hutton said. “Shopping is an experience, shopping is entertainment, and we’re creating a unique shopping experience.”