Big Bob’s Flooring Outlet has been in existence for some 31 years, beginning as a single location in Kansas City and evolving into a unique operation perfectly poised for the retail floor covering industry’s next iteration. Serving the cash and carry segment of the industry, the firm has evolved into a franchise player with more than 50 locations throughout the country and three corporate locations in Kansas City. The brainchild of founder Dave Elyachar (then a mill rep, now the chairman) Big Bob’s originally focused on new and used carpet. It now offers a full array of flooring options including carpet, laminate, vinyl, tile and wood at what it calls outlet prices. And yes, it dropped the used carpet decades ago.
The unique niche the company has carved out for itself is with retailers who have found success, usually with full-service operations or with some other subset within their markets. These retailers are seeking to expand into areas that won’t dilute and doesn’t complement their prime operation. Most of Big Bob’s franchisees fit into this category—some with quite a number of stores, some with a single full-service location.
There has been much speculation as to how the retail floor covering business will evolve over the next decade, with the big-box home improvement competition expanding their proficiency to brick and mortar stores as well as plans to dramatically grow digital marketing efforts. Home Depot, for example, recently opened three fulfillment centers—each in a one million square foot range.
With the big boxes amassing retail market share every year and many seeing them increasing that rate exponentially over the next 10 years, the situation is poised to make life pretty challenging for independents in this business. Many independents set on safeguarding their longevity and looking to expand both within their current specialty and outside of it may choose to do so with a Big Bob’s cash and carry location or two in their trading areas.
This point was at the center of a conversation we had recently with Dave Elyachar to get his take on some of the turns this industry would likely take in the years to come and how this might play into Big Bob’s end of the court. Incidentally you can listen to this conversation in its entirety on the TalkFloor.com website. Just click on Floor Radio then on the archives. Here are some excerpts from that conversation.
TF: Give us an update on what’s been happening with the Big Bob’s organization over the last year or so.
Elyachar: Our stores that are open are doing exceedingly well. Nationwide our same store sales are up about 18% over last year. In the rest of the world, business is struggling. One of the reasons is the big boxes are taking gross revenue from the traditional mom-and-pop brick and mortar retailers. And I don’t think they are finished with their growth plans. I think they will expand into shop at home, and eventually they will do more commercial, more new construction and more multifamily. They will get into most of the different sectors of flooring before all is said and done.
People resources are the single and only advantage independents have versus the onslaught of the big box. And if we don’t learn how to recruit, train, manage and motivate better quality people, I believe the traditional mom-and-pop retailer will continue to go out of business.
One of the things they have not learned yet is that every model has a different motor. A traditional full-service medium to high-end, Abbey or CCA type of store has a different motor that runs the business than a shop at home, commercial, multifamily, new construction or cash and carry operation. Some operators who are dedicated within our business are able to operate two or three different motors under one roof. I’m not sure the big boxes will be able to be successful in all of the different channels of this business. But if they are, they are going to continue to take business away from the rest of us.
In Kansas City, we have three stores and are doing close to $10 million. The big box players have 40 stores doing close to $75 million, and they do it with better real estate, bigger advertising budgets, better displays and much better branding than any independent could possibly have.
TF: You talked about some of the advantages the big box players have. What advantages would you say the independent flooring retailer has?
Elyachar: We have only one advantage and it’s not branding, it’s not real estate and it’s not advertising. It’s people. People in management, sales, installation, even warehousing. People resources are the single and only advantage independents have versus the onslaught of the big box. And if we don’t learn how to recruit, train, manage and motivate better quality people, I believe the traditional mom-and-pop retailer will continue to go out of business.
These are our challenges as a traditional retail operation. It’s not your father’s floor covering store any more. It’s a very sophisticated business, and if retailers are not handling their businesses in a more sophisticated manner, it’s going to be harder and harder for them to stay in business.
TF: One of the features of the big box stores that often leaves a bad taste in a consumer’s mouth is customer service. The home improvement companies seem to be known for often ignoring customers or being full of workers who are uninformed in the particular departments where they work.
