ASHLEY HomeStore-Indiana/Kentucky

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NAME OF STORE:
ASHLEY HomeStore-Indiana/Kentucky

PROFILE:
KHF Holding, Inc. owned and operated five Ashley HomeStores and multiple other multi line furniture stores in Indiana and Tennessee. Three of the Ashley HomeStores were in Indianapolis and two Ashley HomeStores were in Louisville. The KHF management team was experienced in the home furnishings industry, sales were growing, and operations were profitable. As retail sales continued to grow, KHF decided to reposition a retail store with a store closing event that was conducted internally by the company. The results of the company controlled store closing were both unprofitable and unsatisfactory. The experience left the KHF organization with the understanding that closing a store, protecting the reputation of a company, and maximizing profit opportunities is a specialty discipline, not be undertaken by a normal retail organization, even one with the sales, management and resources of KHF.

When the landlord of the KHF 65,000 square foot Carmel Indianapolis Ashley HomeStore would not renew the lease at satisfactory terms, Chris Caprio, the President and CEO of KHF Holding contacted Richard Glabman of Deere Park & Associates to explore options. According to Chris Caprio, the Deere Park organization had been recommended by the highest senior management of Ashley Furniture Industries as "a company that can be trusted".

OBJECTIVES:
Chris Caprio, in the early discussions with Deere Park about the potential project, established four clear goals and expectations. These were:

1. Obtain dollar for dollar for the entire cost value of the inventory at the Carmel Indiana Ashley HomeStore, (estimated to be $500,000).
2. Protect and enhance the retail business at the other four KHS Ashley HomeStores in Indianapolis and Louisville during any event.
3. Provide superior customer service and preserve the reputation of both Ashley and the merchant.
4. Generate a significant cash profit for KHS from this event.

PROJECT:
Deere Park took over the total management and operation of the Indianapolis Carmel Ashley Home Store and operated this Ashley HomeStore location for approximately four months. A special "Store Closing/Moving" event was conducted by Deere Park that conformed to all requirements of Ashley Furniture Industries Licensees. Immediately after the takeover of the store by Deere Park, sales improved not only at the Carmel store, but also at the other Ashley HomeStores of KHF. Deere Park organized promotional activities to enhance sales and traffic at the other KHF stores. New Sales associates sourced by Deere Park averaged over $35,000 a week . Advertising costs for the Carmel location were lowered and operational changes were made that produced significant benefits for KHF. One such example of the improved management and control of operation brought by Deere Park to this project was operations without the cost of an outside warehouse. Despite retail sales at the Carmel location averaging over $1.7 Million a month for four months (in excess of seven million dollars), under Deere Park required no outside warehouse to handle inventory or sold orders. Retail delivery costs were significantly reduced. A significant amount of KHF management overhead was also reduced by reassigning original KHF personnel to other locations. KHF senior management reviewed and approved daily all marketing, merchandising and financial expenditures of the Deere Park project, with the comment that the "financial reporting and controls of Deere Park were equal if not superior to our own."

RESULTS:
As a result of Deere Park's involvement in the Ashley HomeStore Closing-Moving Project at the Carmel Indiana store, all the original goals of Chris Caprio and KHF (see above) were achieved and executed and KHF received in excess of $1,000,000 in financial benefits. As a further result of the involvement of Deere Park, KHF retained trained and experienced management to continue to work within the KHF organization. KHF modified multiple parts of their own operations in conformity to the improved methods demonstrated by Deere Park. In addition, within a year of closing the Carmel location, KHF successfully reopened another Ashley HomeStore in the Indianapolis Market and engaged Deere Park in other projects for other locations. The Deere Park and KHF management have remained good friends and business associates throughout these projects.