Best Practices: Harry Katz Carpet One Floor & Home - July 2019
By Jessica Chevalier
Harry Katz Carpet One Floor & Home is an 87 year-old, Long Island-based business amid a significant transformation. Three years ago, the company completed a full redesign of its showroom and reopened as a Destination Carpet One location. Then, in November 2018, the company launched a pilot franchise with CCA Global called Kiba Studios. Only the second Kiba Studios franchisee in the country, Harry Katz now offers kitchen and bath cabinetry, window treatments and mattresses in addition to a full portfolio of flooring.
A HERITAGE OF EVOLUTION
Harry and Yetta Katz opened an icebox and linoleum business, called Harry Katz Floor Covering and Appliances, on Long Island in 1932. The couple was very involved in the community. Harry served as a volunteer firefighter for 49 years, and the pair started the first temple in Mineola, Temple Beth Shalom (which has since changed names), and were founding members of the Mineola Chamber of Commerce.
As time passed and technology advanced, Harry Katz expanded to carry a full line of appliances and additional flooring products. In 1955, Harry and Yetta built the facility that the business currently inhabits on Jericho Turnpike. The family lived above the store, and Yetta split her time between raising the kids upstairs and helping her husband in the business downstairs. The same year, Harry and Yetta’s son Kenneth, having recently returned from the Korean War, became a partner in the business.
Harry and Yetta stepped away from Harry Katz in 1970, retiring to Florida. Like his parents, Kenneth maintained strong ties with the community, serving as a Mineola volunteer firefighter and as head of the Chamber of Commerce that his parents had helped establish. Kenneth ran Harry Katz until his semi-retirement in 1985, when his children Ronnie Katz, Doug Katz, Gary Katz and Cyndy Sigadel, who had grown up working in the business during summer breaks, took over. Kenneth continued coming in to the office after his retirement, often to “referee” his kids, Cyndy reports with a laugh, until a couple of years before his death in 2016.
In 1986, the company dropped the appliance business-which didn’t provide margins as robust as flooring and was cumbersome on the delivery end-as it became a Carpet One franchisee. And in 1995, it signed on with another CCA Global franchise, ProSource, opening a location about ten miles away from Harry Katz, which Doug runs. Ronnie retired in 2010, leaving Harry Katz in Gary and Cyndy’s hands.
Cyndy reports that, today, she and her brothers make running a business together work by dividing responsibilities clearly. Gary runs Harry Katz’s commercial operations, which account for about 25% of business, and Cyndy overseas the residential side, including managing installation schedules and follow-up.
Though Cyndy and her three brothers have 15 children between them, the fourth generation Katz kids have all gone in their own directions, and there isn’t a clear successor for the business, but that isn’t a major concern as of yet. Right now, Cyndy, Gary and Doug are “in it for the long haul” and focused on building success with their new Destination Carpet One and Kiba Studios ventures.
BECOMING A DESTINATION
The Destination Carpet One investment wasn’t just an aesthetic redo for Harry Katz. It also involved bringing in a new product category-porcelain-and realigning the store to the contemporary preferences for flooring.
The investment in porcelain has proven very successful for Harry Katz. The company became a Daltile Statements dealer, carrying a full line of products, which includes the Daltile, American Olean and Marazzi brands. And the business reports that it has greatly benefited from the Statements “store locator” referral system. In only three years, porcelain has grown to account for 10% of Harry Katz’s total business.
As for accommodating the current market, as with many long-established stores, and partly due to carrying “Carpet” within its name, Harry Katz had come to be primarily associated with soft surface flooring in the minds of community members. Prior to the redo, the store was about 75% carpet. In the renovation, the company moved hard surface flooring to the front of the store, and hard surface has grown from 25% of business to 38%. Despite the trend toward hard surface flooring in the market, the company reports that carpet remains a strong category for Harry Katz, both for shelter and living area applications. Cyndy notes that the store also does a lot of cut-and-bind carpet work, both for rugs and step/hallway applications.
SEASONED EMPLOYEES & NEW VENTURES
With regard to employees, Harry Katz has been lucky. It has seasoned floorcovering sales team members with tenures of eight, 20 and 28 years. The company attributes its success in retaining employees to the fact that it offers salary compensation, rather than operating on a commission system. This creates a more collaborative and a less-competitive workplace for employees, not to mention a greater degree of financial security.
Harry Katz recently hired staff for its Kiba Studios expansion, and, due to the fact that CCA Global sees Harry Katz as its pilot Kiba Studios program, it has assisted the company in finding experts for the new categories. For the window treatments business, which sells Hunter Douglas and Graber blind products as well as drapes, CCA helped Harry Katz secure a seasoned professional, and, as a result, that business is really taking off.
Harry Katz believes that how its teams work together is very important. Cyndy reports that her sales staff is skilled in design, but, in addition, the floorcovering business also has an interior designer on staff for customers to consult with. The kitchen and bath cabinet business also has two designers on staff, and these individuals can cross-work in flooring design. Similarly, the flooring sales team has been lightly trained in each of the new specialty areas and walks each customer downstairs to the cabinet, window treatment and mattress showrooms, whether or not the customer is currently in the market for those products. If they do get a bite with their initial pitch, they then hand the customer off to a category specialist.
Educating the buying public about its new offerings is a big part of the reason that Harry Katz asks its floorcovering team to walk customers through the entire store. Says Cyndy, “Getting people to know that we have this new business is a big challenge. Even many of our long-time customers don’t know that we have this.” But another reason is what Cyndy calls the “wow” factor. The company made a significant financial investment in its showrooms. The grand stair, by which the two floors are connected, features a beautiful chandelier overhead, and the showrooms feature high, dramatic ceilings and lovely residential accommodations. It’s impressive, and it leaves customers with a positive impression.
In the cabinet business, Harry Katz carries three lines under the Master Brand, which is U.S.- and Canadian-made; Cyndy believes this is an important factor to her customers. In mattresses, the company carries Serta and may soon bring in a specialty line.
NEXT GENERATION CUSTOMERS
Like many longstanding flooring specialists, Harry Katz has an aging clientele and is trying to figure out how to attract the next generation, which is more familiar with shopping at big boxes than mom-and-pops. “They go to the big boxes thinking they are getting a better price,” says Cyndy. “They don’t understand the value of service yet.” Oftentimes, the company finds that its younger customers have been sent in by their customer parents, and Cyndy is hopeful that its fresh and attractive showroom will make a positive impact on these shoppers.
One of the company’s longstanding marketing efforts is two semi-private annual sale events. The company sends out 15,000 invitations for the sales via mail and sees a very good response.
In addition, the company is investing in Carpet One’s One Stop Digital Plus program. The program automatically sends out a survey following each sale that makes it very simple for customers to write reviews. Harry Katz has seen a great response from this endeavor and has amassed a good number of online reviews on various sites, and new customers frequently comment that they found and chose the store via these review sites. The company also operates social media sites through Carpet One.
As of late, the company has gotten a good deal of help from an unexpected source. A “friendly competitor” nearby closed its doors and has been sending customers Harry Katz’s way. “That has helped us tremendously in the past three months,” says Cyndy. “They recommend us to everyone.”
FINDING THE RIGHT FOLKS
That “friendly competitor” didn’t send only customers the business’ way. It also passed along its best installers and sales team members. And, as finding good help is a challenge across the industry, this has been a great boon for Harry Katz.
Harry Katz uses subcontractor installers but reports that it has a loyal crew because it pays fairly and treats them well. However, Cyndy notes that keeping each installer active on a daily basis is a balancing act and a challenge.
The company counts itself lucky that it doesn’t have much turnover either in sales or installation, but expansion has intensified the challenge of, as Cyndy puts it, “hiring good people and keeping them trained.” She reports that while finding young people and training them is key, it’s also quite a risky investment for a small business, as there is no guarantee that the individuals will stick around.
Harry Katz won second place in the World Floor Covering Association’s Gold Standard Awards in the under $10 million category. The award recognizes flooring retailers who create an outstanding consumer experience.
Copyright 2019 Floor Focus