How Bedshed is beating the retail blues
Bedshed is forging ahead in a tough retail climate. Franchising spoke to Gavin Culmsee, chief operating officer, to find out why.
The company started out selling water beds then evolved into tubular steel framed beds, and now stocks contemporary bedroom furniture, mattresses and manchester.
Culmsee says “WeÕre happy with our performance on growth this year. WeÕll finish up on same stores sales.
“This is a pretty experienced franchisor, weÕve been franchising for 30 years, so of course that helps. WeÕve been through tough times and the people in the head office have been in retail for some time.
“We also have a very committed group of franchisees who add value to Bedshed.”
So whatÕs the key to getting ahead in retail?
An inclusive approach to franchising means that franchisees are involved at a strategic level of the business, explains Culmsee; for instance, joining the overseas buying trips. “In retail itÕs always an uphill battle to get product compliance, but we do the hard work upfront. It means franchisees are behind the choices.”
Up to 15 out of the 30 franchisees in the network might travel and get involved in the buying process, selecting and fine tuning product choices and keeping an eye on costs.
The chain has no central storage facility. “We import directly so that cuts freight costs,” says Culmsee. Franchisees must maintain their own inventory, typically stored in a 500sq m offsite warehouse. “We can deliver to the customer very quickly, thatÕs our major competitive advantage.” Some franchisees will land containers every week, he adds.
“The trend is for buying quality product, thereÕs been a real resurgence at the upper end in the last nine or 10 months. People are buying to last but there will always be a constant demand for lower priced products such as kidsÕ mattresses. People come to us for advice, thatÕs part of us being bed specialists.”
Culmsee believes the biggest retail cost is occupancy and the franchisor will offer to negotiate or renegotiate leases on behalf of franchisees. Landlords now are a bit more open to discussion, he says.
The retail footprint is between 800 and 1000 sq m, and a franchise will cost about $500,000
There are 40 stores, 10 are company owned, and expansion across the chain has been through multiple store ownership, but thereÕs still plenty of room for growth, Culmsee insists.
“In our network thereÕs a massive opportunity in NSW, some in Queensland and a great opportunity in Tasmania — one franchisee for a store each in Hobart and Launceston. There are only two stores in NSW (in Mittagong and Warners Bay at Newcastle). We can open 30 stores without impacting on our existing stores.”
Involvement in the store set-up process for franchisees is key, he says, so itÕs preferable to match a franchisee to the right store rather than establish a company outlet first.
“WeÕre looking to open in the right places, so five or six stores a year. We want to make sure our franchisees are happy with their returns.”
Retail experience is not required of franchisees, Culmsee adds. “WeÕve got ex-auditors, fitters and turners; we want people who have the right outlook and want to be a part of this.”