Retail Profile: Real Deals on Home Decor
Susan Dickenson -- Home Accents Today, April 1, 2009
Real Deals on Home Decor is a franchise network of 60 stores where overhead is minimized with a limited operating schedule in no-frills, non-traditional locations so that the goods can be delivered at a lower markup.
“These are home decor stores with incredible accessories and even more amazing prices,” said Jeff Humphrey, the company's vice president of marketing and development, and founder of the first Real Deals store. “I'm not saying that because I'm one of the owners but it's a very cool concept,” and one that, according to Humphrey, limits the days the stores are open to just Thursdays and Saturdays. “Our tagline is '2 days a week — 2 good to be true!'”
The franchises are locally owned and are sometimes housed in non-traditional locations. The warehouse feel and limited operating hours make it “more of an event” for customers. “When the customers find us, they feel they've made a discovery,” Humphrey said.
Humphrey and his wife Marisa, CEO of the franchise business, own the first, and largest, Real Deals, a 100,000-sq.-ft. store in Jefferson, Ga., that operates six days a week out of a former textiles mill. As the “parent” store, it is not bound by the franchise restrictions on days of operation.
In 2004, Marisa's sister and brother-in-law, Carie and Nate Kelsey opened a smaller 400-sq.-ft. version of Real Deals in Twin Falls, Idaho, with $10,000 of inventory. The showroom was three small offices of an old creamery in a “not-so-nice” part of town. In the beginning, the Kelseys would open for business just one day a week, pulling decor out in the hallway for more space. They eventually expanded into 4,200 square feet on the first floor of the creamery and began opening on Saturdays as well.
“Soon people were asking if they could open a store like ours and we just kind of blew it off,” Humphrey said. “But as the requests kept coming in we decided to get serious and protect our unique and fun business by franchising the concept.”
By the end of 2006, its first year as a franchisor, the Idaho-based company had 20 stores. Today that number is at 60, with locations in Georgia, South Carolina, Utah, Idaho, Washington, Oregon, Montana, North Dakota, California, Arizona, New Mexico, Texas, Colorado, Minnesota and Illinois.
The Humphreys still run the Jefferson, Ga., store, but are partners with the Kelseys in the franchise business. Carie Kelsey is president and Nate Kelsey is vice president of sales.
Franchise terms are specified on the company's Web site. An investment of somewhere between $58,000 to $112,000 (depending on store size) covers the initial franchise fee, inventory (purchased through Real Deals' network of vendors), and the company's “secret recipe” for success. Royalties are 5% of gross sales and advertising runs at 2% per month (1% local and 1% national).
“One of the benefits of a franchise is there's obviously a formula for the success they're having. Part of that is support, part of it is buying power and part of it is systems,” Humphrey said. “We want people to run our system and the system will run their business.”
In addition to shopping the markets in Las Vegas, Atlanta and overseas, Real Deal supplies its stores through an import company, Jackson & Harrison Imports, that the Humphreys started in 2004. “Without our unique relationships with our factories overseas, we'd just be another home decor chain,” he said. “You never know which factory owner Marisa will have staying in our guest room for a week or 10 days.”
Marisa, Carie and their three sisters (each of whom run franchises) have all played an active role in the importing. “When we started the import company, a man who did business in Asia told me that I should not go there, because as a woman, I wouldn't be respected in business,” Marisa Humphrey said. “That kind of challenge is exactly what fires me up.
“That man couldn't have been more wrong,” she continued. “In fact, one of my most memorable and successful trips to Asia was when I took Carie, two other sisters, my mom, my oldest niece and another female employee. In some smaller towns, we were like a walking circus attraction. One father even shooed his son out into the street so the little guy wouldn't miss seeing such a strange site. We got so much done that trip because we all think so much alike and we had all those brains working together. It was great.”
Location and rent are also important to the success of the stores. “If we can get the rent cheap enough, then the business really works its magic,” Jeff Humphrey said. “We try and balance rent and location with charm. We want each customer to have a love affair with our stores, to feel like they have made a discovery when they walk through the doors. Our prices are great and our decor is unique. We have the feel of a true mom-and-pop.”
Humphrey said Real Deals does traditional advertising through television, radio and mailers, but encourages as much personal contact as possible. “Each store should develop relationships with their customers. This is something the bigger stores just can't do.
“We really want each store to belong to the community they are in and have the community feel like they belong in our store,” he continued. “That includes helping each store stay current with things that are selling well in their area.” The franchisees also get together once a year at an annual convention.
Humphrey is also quick to point out that there's always room for improvement. “We just had a big advisory meeting. It's not all rosy, but we're honestly trying our hardest. It's amazing how little support some franchisors give the franchisees. We take it very seriously that someone gives us x amount of dollars.”
He also feels franchising offers a new start for people who are being laid off. “This is obviously a part-time business, open two days a week. We want them (the franchisees) to have a life while they're building a better life. It's a legitimate money-making business if they run it properly. We have a good formula for making something work.”
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