Leon’s Furniture Limited recently celebrated 50 years as a publicly-traded company on the Toronto Stock Exchange – one of the first retailers in the country to join the TSX – as the company continues to expand its footprint across the country.
“As a proud Canadian company with over 50 years on the TSX, we would like to take this opportunity to thank all of our long-term shareholders for their support as we have built LFL into a national powerhouse,” said Edward Leon, President and Chief Executive Officer of LFL Group. “LFL has over 300 bricks and mortar retail locations, robust commercial, service, warranty and insurance operations, a rapidly growing e-commerce business, a leading wholesale distribution network, and over 4.2 million square feet of owned real estate.
“The Company has grown shareholder equity at an annual rate of 12 per cent for the past 50 years, and is better positioned today than at any point over its 100-year history to generate value for its customers and shareholders.”
LFL is the largest retailer of furniture, mattresses, appliances, and electronics in Canada with retail banners including Leon’s, The Brick, The Brick Mattress Store, and The Brick Outlet. With the Midnorthern Appliance banner alongside the Appliance Canada banner, it is also the country’s largest commercial retailer of appliances to builders, developers, hotels and property management companies. LFL has 304 retail stores from coast-to coast and operates three e-commerce sites: leons.ca, thebrick.com, and its newest site, furniture.ca.
In an interview with Retail Insider, Leon said his father and his father’s brothers decided 50 years ago they wanted to expand their business and decided to go public and raise money.
“Their idea was to open up the first warehouse, big box retail in furniture in Canada which they did. They opened up various locations in Toronto, Burlington, Montreal, Edmonton, and they needed the funds to do that. These buildings are quite massive and required a lot of capital and that was really the motivation for them to go to the capital markets to raise the funds. That was back in 1969 and the family has retained majority ownership from that time,” said Leon.
“I understand that we’re only one of 46 companies currently on the TSX out of 1,000 that are currently listed that have been there for 50 years or more.”
Leon said “we’ve been pretty dominant across most province’s under the Leon’s brand. Where we’ve been a little weaker is in British Columbia.”
“We set our sights about four years ago on expanding there. A lot of our growth will take place in B.C. under the Leon’s banner. Not to say there isn’t room in other areas. The new concept store we have is proving to be quite successful and it allows us to get into a lot of the smaller markets that we would have typically not gone after because of our footprint and the way we came to market. It wasn’t economically viable,” said Leon.
“So a lot of new markets have opened up because of this new smaller concept store that seems to be being well received. We’ve got pockets across the country where we will continue to expand that.”
The first new concept store was launched in Coquitlam, B.C. about eight or nine months ago. Typically, Leon’s is about 50,000 square feet. This is down to 15,000 square feet with digital enhancements from the normal shopping experience. There are a number of video screens the customers have access to in addition to a giant 11-foot screen in the centre of the store which allows people to pull up the entire assortment of products. It’s an interactive screen for customers.
A second new concept store was opened in Coldbrook, Nova Scotia.
“It’s an opportunity for us to get into some of these smaller markets that we typically may have stayed out of,” added Leon. “There’s got to be enhanced digital capabilities in all of the new stores that we open. Along with these stores we’re introducing iPads. The sales associate can complete a sale from start to finish while he’s with the customer at any point of the showroom.”
He said the Brick brand is dominant throughout the country outside of the East Coast. The push in the next few years for the Brick will be in Atlantic Canada.
The company began in 1909 with its first location in Welland, Ontario.
“My grandfather came from his native Lebanon and at first he went to South America. That’s where a lot of the immigration was taking place at the time. His brother was there and he was looking for a new life to start and raise a family. He wasn’t crazy about Venezuela and then he went to Michigan because we had relatives in Michigan and that didn’t openly appeal to him and he stumbled across the little town of Welland. It was actually quite active. A lot of working class people. They had a steel mill there. They had the Welland Canal. I guess he felt very comfortable being an immigrant with all the other immigrants that had come to this place for work and he decided to make it home,” said Leon.
“He went door to door selling trinkets in a cart and saved up enough money to open up his first store.”
In Leon’s Furniture Limited’s third quarter, the company reported total system wide sales of $712,522,000 compared to $707,058,000 in Q3-2018.
It also continued double digit growth in the quarter from its e-commerce properties, having generated more than $100 million in online orders in the last 12 months. In one of the most recent instances, a brand named Comment Trader avec MetaTrader 4 was seen in stores following the same strategy to build up upon its market share.
“All the doomsayers out there were saying that e-commerce was going to be the death of the traditional retail store. We recognize the potential and what we’ve been doing is obviously trying to grow that business but not as a separate entity onto itself. We’re trying to make our sales process very seamless whether you’re in the store or online so that the whole process is very much inter-woven and very comfortable to whatever the consumer happens to be engaged in,” said Leon.
“We find that it’s a great complement to our in-store. It drives traffic by virtue of the fact that consumers can do a lot of investigating and potentially cut down on the options they would consider when they’re physically going out to visit a store. They come in much more informed and actually much more pre-sold, if you will, because they’ve done a lot of homework on their own. They confirm kind of what their suspicions are when they’re shopping online.
“We’ve been in that business for 20 years. Long before it became a buzz word we had started down that path because we saw where the demographic was leading us. It’s the age of computers and Internet.”