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The Smity's Success Story

Furniture World Magazine


Stamina, hard work, hard work, hard work and maybe a little luck!

It takes stamina to be successful in the retail furniture business these days. "Stamina, enthusiasm, creativity, vision, hard work -- hard work -- hard work -- and maybe a little luck, then more hard work!" declared entrepreneur Lloyd Schmidt.

Known to his friends and the great wide world as "Smitty", this slender, fit-looking man happily surprises new acquaintances with his senior status. Born on January 28, 1930, he works out half-an-hour morning or evening on his treadmill. "On holiday, I play tennis for an hour and a half every morning, and walk the beaches for miles."

That still leaves plenty of time to explore furniture stores wherever he finds himself "for ideas - You've got to get out of your office or store, analyze what other successful people are doing. Look at different kinds of businesses, too, travel, automotive, fashion, whatever, put a little, twist on a good idea and work with it!"

Smitty's Fine Furniture stores can be found at Cambridge, also the head office in Hanover, where the dynasty was founded back in 1949; Barrie, 100 kilometers to the north of Metro; and Pickering, Ontario, the mini-empire neatly surrounding the population-packed Toronto and Hamilton Golden Horseshoe.

Looking for a minimum sales increase of 20% this year, Lloyd Schmidt presents his formula for success which includes exclusivity, employee incentives and aggressive customer service.

"I wasn't really born into the business," Smitty reminisced. "My father (also Smitty) was head finisher at the Peppler plant in Hanover, and worked nine or ten hour days, but his main passion in life was music. From age 17 he played the organ in local churches, and missed only one sick day in 26 years. He organized and played pageants for Easter Seals and other charities. He used big speakers, played loud, and blew everyone out of the arena.

"Dad would put an ad in the paper for used pianos, then drive his flat trailer down to Hamilton or Toronto and see what he could find. He'd rebuild and refinish the pianos in the Piano Shop behind our home, with nine coats of high gloss varnish on the front boards. Friends came to help with the work, and his side business grew bigger and bigger. Ultimately he retired from the factory.

"It was at the time of the introduction of Conn Organs from Indiana, the new electronic organs. The organs and new pianos occupied our livingroom and diningroom; they were the showrooms. All our family life revolved around the kitchen!

Lloyd is the youngest of three sons. "Elmer is still my partner and Gordon was also in the business until 1985 when we bought him out. He wanted to be independent."

Grandparents on both sides of the family emigrated to Canada from Germany in 1849 and "That's why I have a square head and chin!" laughed Lloyd. "I learned German Christian songs at my grandmother's knee, and that's when I began to sing. At 14, a tenor, I was the youngest singer in our church's choir loft, and I'm still there. But now I'm a bass. And I've been a member of the Grey Bruce Singers for 30 years."

"How do you have time?" we asked.

"Oh, my head kicks into second gear at 7 o'clock," Lloyd answered.

In 1949, the energetic family decided the time had come to move from the livingroom to a real store, Smitty's Shopping Center, Limited, "very generic!" It was located on Seventh Avenue in Hanover, one of the main arteries in town.

"We borrowed money on Dad's house, and we all pitched in. Elmer, Dad and I were partners, one third each. But Dad still kept his own business. I helped dig big boulders out of the basement foundation. Elmer had just come back from the War, and was working at a hardware store, and his bride-to-be, Mary, clerked at a grocery store. So we put in hardware, groceries, Benjamin Moore paints and appliances. I took a one week course with a butcher, so I was in charge of meats, the official butcher. We soon became famous for our great pork sausage.

"Things went well, and a year and a half later, Peter Kowalski, a friend and a salesman for Victoriaville, and Grenier Furniture from Quebec, suggested we try furniture.

He said, 'I'll bring in a couple of bedroom suites, and it won't cost you a nickel. Try it and see what you think. If you sell them, OK. If you don't, I'll get rid of them. You could put them down in the basement.'

"It was a big basement with a concrete floor, so Peter delivered the suites, masonite with frame around it. and we screwed in the wooden legs; $79 for the whole four-piece suite!

"One day soon after, I was busy waiting on a customer at the meat counter and Peter came in. He said to my customer, 'Got to show you the new bedroom suites!'

"I peeked down the basement stairs to see how a professional furniture salesperson worked. Peter pounded on the dresser with his fist, then lay down on top of it to show how strong it was. I thought, 'This is the way to sell furniture!' And that's how Smitty's got into the furniture business. Of course the customer bought the suite!"

The team worked long hours, six days a week. In 1951, the second substantial addition was made to the store. 'The first, the year before, had been an extension to the meat department and a large cooler.

"Our second addition was for furniture. Television had started to come in, and I took a course in fixing them."

In 1955, they decided "to get out of meat, vegetables and hardware, just get rid of it all and keep appliances and furniture. We added carpets and draperies and farmed the draperies out to women to sew in their own homes."

It was in 1955 that Smitty found himself a bride, Korleen, then a teacher. A constant and dedicated student, she earned a degree in geography from the University of Western Ontario after their marriage, and just recently graduated from the Ontario Theological Seminary in Toronto, qualified as a Minister. Korleen is coordinating visiting of membership at the United Church in Hanover.

But in 1955, Smitty had also found his "third career as an advertising man". The couple studied Betty Furness' Westinghouse ads and others that appealed to them, and for three years Lloyd wrote and produced his own commercials with Korleen as his star, as well as personally doing all the copyrighting for newspaper ads and radio commercials.

"Business in furniture got more successful all the time. In Hanover, we were surrounded by 19 furniture factories, all of them turned out wonderful product lines. There were Knechtel, KKK, Spiez, Ball's, Bogden and Gross, Krug's, Durham Chair as it was then, Fry and Blackhall, Combe's, Kaufman's. Deilcraft, Milverton, Andrew Malcolm, Hepworth amongst others.

"We added a third addition to the store, more electronics, five of the top name brands.

"In 1962 we decided we should not spend any more money expanding in this area, so we bought 47 acres at the opposite end of town and developed the first shopping center in this region. Nine stores, a motel and a General Motors dealership, and we built what we thought then was a very ultra modern furniture store, 13,000 square feet of selling space. We sold the old store on Seventh Avenue, and there's a restaurant and antique store at that location now.

"The appliance market started heating up. Then two new fellows came into town selling draperies and carpet. We asked ourselves, 'Should we stay in a full line, or should we divest ourselves of drapery, etc.' With all those factories around to draw from, we decided to concentrate on furniture. In retrospect, if we'd been in a more populous area we would have expanded more rapidly. What we did was give people our cards and they got broad distribution in Toronto and Hamilton through the schools, Air Canada, and all sorts of other places. People put us in their newsletters and talked about us because they were so pleased with us. And, of course, this brought more customers in."

Continuation from February: In January we introduced you to Lloyd Schmidt, entrepreneur. He told us that "Stamina, enthusiasm, creativity, vision, hard work -- hard work-- hard work -- and maybe a little luck -- then, more hard work!" are what it takes to be successful. This is the continuation of "The Smitty Story".

"By 1985, a couple of the major furniture stores in Kitchener/ Waterloo had gone out of business, and we were advised that this was the time to move if ever we did. We saw our present building in Cambridge; it was being used as a storage space. An old department store, Sevette's, had closed. Most of the stores in the Mall were closed. In January, 1985, we asked for a three-year lease and we signed it on the second to last day of the Toronto January Furniture Show. We doubled our orders which made some of the manufacturers very happy!

"Jimmy MacDonald had come to the January Show from California, and we asked him to help us with the design of the store. It was a mess! But in one week's time we got the floor plan from Jimmy. He's done six stores for us now, just a breeze, so good to work with.

"We hired our staff, cleaned up, built the walls, spray painted the ceiling and walls, and had the 44,000 square foot store complete and fully accessorized by April 11 when we opened. We even hired two talented people, Wayne and Charlie Strawn, and formed our own in-house advertising agency.

"We did fantastic business right from the beginning. Our Hanover sales were at $4 1/2 million. We jumped to $10 million the first year.

"About a year later I went to the owner and said, 'Would you sell us your Mall?' We are close to Highway 401, so people can come at you from all directions, an ideal location. So we had Canada's first home furnishings Mall. There were 16 stores in here, everything exclusive, lighting, carpets, fireplace store, 'Sugarcane', a wicker and rattan store, all not competing with one another.

"But in 1989 the recession began. One by one the stores dropped out. I was so proud of our beautiful home furnishings Mall, but we had to turn it back to the banker. Four years of work and a lot of money. We retained our own store.

"Think about this though. If you're down to the floor and you've been up at the ceiling, and the ladder is still there by the wall, you just know you can get back up.

"In April 1991, we established our 15,000 square foot store in Barrie, Ontario. We were getting a fair bit of business from that area, and we wanted to be on Highway 400 because of the Toronto customer base passing our door going north.

"A few years ago, Bill Hepfer asked us if we wanted to take over his Pickering store. (Pickering is east of Metro Toronto.) Last June, he came back to us, telling us he intended to close down. My only concern was distribution, how would we manage it? I figured out how we could get goods across Toronto early in the morning, before the rush hour, from our warehouse and it seemed quite feasible. So, we called Jimmy MacDonald again, and he designed the store, open concept, 30,000 square feet. People walk in the front door and everything is in galleries. There are 11 at Pickering, clocks, curios, casual dining (wood, glass and metal), formal dining, entertainment centers, home offices, chairs/recliners. We've used extensive signage and it works for us. We opened October 28, at the tail end of the High Point Market. Sales are excellent.

"All our salespeople in all our stores are being retrained. We got Ted Shepherd from Shepherd Sales Management, Atlanta, to come in. Now we know exactly how many people come in through the door and how many were sold. We no longer have Store Managers, we have Sales Managers. Each one of our sales consultants are now on an UP system. They go to the door and welcome you after you've had a chance to breathe. They never say, 'Can I help you?' and, no, they never pound or lay on the furniture to show how strong it is (see part one in February FURNITURE WORLD).!

"Nobody is on commission. We pay a good salary, bonus and incentive. And we're on profit sharing, the more the company makes, the more everyone makes. We've always been, and still are a very caring company and have the best interests of our people at heart. Everyone feels comfortable challenging themselves. The boss no longer watches over them, we work together.

"After the customer's been greeted and their needs determined, the consultant sketches your room with you, placing your new furniture with existing furniture. Perhaps your sofa is 20 years old, maybe the television is sitting on a wire rack. So they might suggest a new sofa or a wall unit or entertainment center. They consult with the customer to help them find the right things for their different lifestyles and a relationship is built. They might say, 'Those tables you were admiring, we'll be having a sale next month. Would you mind if I call you?'

"Next morning, they write a thank you note to the customer, handwritten, hand addressed, hand stamped, no computer labels! When the items arrive at the store, the consultant telephones the customer to tell them their purchases are here, and arranges delivery. We need to get back loyalty. With so many stores busy with the no interest, no down payment bandwagon, no GST options, the relationship with the customer, loyalty, is essential to build so they will come back to your store."

Smitty promotes through radio, television and newspaper and preferred customer events are high priority. "We have 55,000 preferred customers on computer. They hear of special events before our flyers go out. We hit eight times a year with flyers, a million and a half in each flight. Preferred customers receive special coupons and other incentives. We had a balloon promotion that was very successful, pop the balloons and you get $20, $50, $100 off and someone in Barrie got their whole purchase free, $9,000! Don't want too many of those! But it puts a lot of fun into it. You have to inject fun into selling on the floor."

Smitty works closely with Cam Lorenz, his Operations Manager, and Bob Gray, Comptroller. And three of his four children are maintaining the family tradition. Alex is a floor sales consultant at Cambridge, Lani at the Hanover store and Kathie at the new Pickering outlet. The youngest, Angela, is a Christian Psychologist, newly graduated top of her class of 300 students from all over the world at Wheaton College in Chicago.

Father Lloyd is a quick decision maker, a visionary, always loping ahead of the pack. We asked his opinion of the industry now and he warned that "If we don't change our way of selling on the floor, I feel that the furniture industry will continue to erode because the travel and automobile industries are taking business away from us". When we asked if there were more stores in his future, he answered, "Yes, as the market permits. We have our strategy in place for 1996 and we're looking for a minimum of 20 percent increase. Exclusivity is key," he insisted. "It's the heart and soul of my business. There's been no fun in the furniture business for the last two or three years, but it's just starting again now!"

They say if you need help, ask a busy man or woman. Lloyd Schmidt's had his hands full with retail furniture, his church choir, the Grey Bruce Singers, and an active family, but he has managed to be President of his Chamber of Commerce, Chairperson of the Hanover Summer Festival, Founder of Holland Center's Participation Lodge for mobility disadvantaged people and Chair of the Hanover Hospital building fund amongst other activities, "in his spare time". We're not sure how he does it, but we know a happy man when we see one.