
DATE: Monday, November 3, 1997              TAG: 9711010733

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:  131 lines

GRAND FURNITURE'S FORMULA FOR SUCCESS IS ALL ABOUT FAMILY

While other retailers see greener pastures in upscale markets, the owners of Grand Discount Furniture are more likely to see dollar signs in the generations of blue-collar families who have traditionally defined Hampton Roads.

``We have four generations of families that still come in and remember my father from 40 or 45 years ago,'' said Steve Stein, one of Grand's owners.

As Grand celebrates its 50th anniversary this year, its owners - the Stein family - continue to push aggressively into this discount market. And they've apparently met with success.

Rankings from Furniture Today, an industry publication, show Grand is No. 2 in the Hampton Roads market with about $20 million sales. While that's still behind mammoth Haynes Furniture, Grand has been gaining ground in its primary market - households with annual incomes of $35,000 or less.

And Grand is still growing. It recently opened two new stores and doubled the size of its Sofas Etc. location in Virginia Beach, bringing the retailer's store count to 10.

What makes Grand's accomplishments even more notable is that the company is still family owned at a time when many mom-and-pop retailers are leaving the furniture business.

``The pattern has been that family-owned furniture businesses have been shut down or sold, gradually phasing out,'' said Henry Howard, a senior editor at Furniture Today. ``The fact that the Steins have held theirs together and have prospered is quite remarkable.''

In 1947, Rose Stein and her sons Jerry and Herbert opened their first Grand Furniture store in downtown Norfolk on Church Street - then the heart of the area's shopping.

But before Jerry Stein agreed to buy the entire company in 1988, he approached his sons, Craig and Steve. He asked them whether they would follow him into the business.

``I think the key is that the business passes from generation to generation,'' said Jeff Davis, a sales representative for Carter Furniture, which supplies Grand's Sofas Etc. store. ``With smaller independents, they usually close because no one wants to get involved.''

But the Stein brothers agreed to return.

Today, father Jerry spends his winters in Florida. And his sons, he said, have truly taken the reins.

``I put in a special phone while I was in Florida,'' Jerry said. ``They called to talk about the children and their mother - but never about the business.''

Son Steve, however, jokes that his father, who has retailing in his blood, will never truly retire from the business. The elder Stein still keeps tabs on the company's operations, his son said.

The Stein brothers are an unlikely pair. Steve, who's not exactly a suit-and-tie guy, has a booming voice and his office is cluttered with stacks of papers. Neat-as-a-pin Craig wears crisp suits and works from a stark, modern office.

Steve has developed the furniture side of Grand, minding the warehouse and taking trips around the world to buy merchandise. Brother Craig minds Grand's credit side, which accounts for 80 percent of furniture sales.

``He's the banker, and I'm the furniture guy,'' Steve said. ``It's like two different companies. Between the two of us, it's a good split. He doesn't like to come into my area, and I don't like to come into his.''

Under Steve's command, the company has improved its merchandising, said suppliers and company officials.

At furniture trade shows, Steve and other Grand employees are among the most efficient shoppers, said Jack Moehling Jr., a marketing specialist with Ashley Furniture Companies. That's because they scout the shows using laptop computers to take notes and digital cameras to photograph new products, he said.

Both Ashley and Grand have worked together to simplify the buying process. For example, Grand's furniture buyers can use their computers to order Ashley's merchandise or check on the manufacturer's stock availability.

Ashley, in return, applies Grand's bar codes to furniture. The Arcadia, Wis.-based manufacturer also ships quickly and in smaller batches, giving retailers like Grand the ability to speedily respond to customers' demands.

``In the old system, a customer comes in and asks, `When can I get it?' '' Moehling said. ``The retailer calls the (manufacturer's) salesman, who's not in. They play phone tag. Then the salesman says, `I'll check on it.' You're talking two to three days there. Then, it will be 30 days before they can get it in.''

On the other side of Grand's business is Craig Stein, who keeps his eye on the company's credit accounts. Craig, who has a background in finance and computer programming, helped develop a computer system that's so powerful and user-friendly that several companies have tried to purchase it.

With a few taps on the keyboard, Craig can find out when a sofa will be delivered or check to see if a customer's account is up-to-date. In the retailer's showrooms, employees can use the system to get speedy credit approval for shoppers.

The retailer also uses its customer database, which includes about 20,000 accounts and a mailing list of 50,000, as a marketing tool. For instance, customers with good paying records are targeted for promotions such as a free gift, free delivery or first crack at new merchandise.

For those customers who don't pay their monthly installments for the furniture now in their homes, Grand's computer system is prepared. It effortlessly spits out legal documents to be used in the courts.

``That is the less pleasant part of the business,'' Craig said. ``It's not something I'm proud of. But we have to do it.''

About 5 percent of the customers don't pay up. Still, the Steins say they continue to willing to lend money to some customers who might set off warning bells at other furniture retailers.

``What I've taught my boys is that you can't pick the customer who's going to be bad,'' Jerry Stein said. ``You have to take risks.''

As for the future, the Steins know that they operate in a market that has grown increasingly competitive. Haynes Furniture, which operates a mammoth store off Virginia Beach Boulevard in Virginia Beach, is the No. 1 furniture retailer in the Hampton Roads market.

``They're a very formidable competitor,'' Steve Stein said.

But Haynes positions itself a bit more on the high-end. And Grand Discount Furniture says its niche will always be furniture made for the low- to mid-income customers in Hampton Roads.

Grand, for example, still offers its ``three-room traditional outfit'' - or one price for bedroom, living room and dining room furniture - for a set price. Today, the package, popular among young families, costs $998.

``We're pretty meat and potatoes,'' Stein said. ``We know who our customer base is.'' ILLUSTRATION: [Color Photos]

HUY NGUYEN

The Virginian-Pilot

Jerry Stein, Craig Stein, Steve Stein...

Al Grossman...

BUSINESS PROFILE

A look at Grand Discount Furniture, Hampton Roads' second-largest

furniture retailer:

GRAPHIC

[For a copy of the graphic, see microfilm for this date.] KEYWORDS: PROFILE