How Jake Jabs's stores stay full of furniture even in times of severe shortages - Home News Now (2024)

This is the first in a series of interviews Home News Now conducted with retailers during High Point Premarket to discuss everything from consumer demand and supply chain constraints to the shifting role of markets.

HIGH POINT — By noon Saturday, American Furniture Warehouse CEO Jake Jabs had already been to a bunch of upholstery showrooms here — Peak Living, Manwah, Jackson, Fusion, Synergy and more.

But his enthusiasm was muted.

“Some of them, essentially, might as well have not even been here,” said the CEO of the 14-store, Englewood, Colo.-based chain. “They’re here in person, but they don’t want to sell anything because they’re oversold big time now. There’s nothing new.

How Jake Jabs's stores stay full of furniture even in times of severe shortages - Home News Now (1)

“And I don’t blame them. If you’re oversold, and you can’t make what you’ve got sold, why would you want to (overpromise)?”

Jabs is not a regular Premarket attendee. September 2020 Premarket was his first, and he was here partly because of rampant speculation at the time that October Market might not happen due to the continuing Covid pandemic. While that’s not a concern this time around, (June Market is just weeks away) he’s here again because that September show turned out to be so good for AFW, as well as many other retailers who came through and the record number of showrooms that opened to them.

This Premarket is setting records again, but it was a little early to say just how good this one would turn out for Jabs and AFW. Given all the oversold positions he was coming across, he seemed less enthused. Business has never been better for the company, now operating superstores in Colorado, Arizona and Texas. It’s setting new sales records every month, and Jabs said he expects to top $1 billion in sales well before the year is out. But the supply side, he said, is probably as bad today as it was back in September. Some retailers interviewed here by Home News Now indicated it’s worse.

We’re seeing a little bit of new stuff,” Jabs said, noting one group from Franklin he’ll be buying, for example. “So a few new things, but not very many. But more important is do they have something we can get right away. We’re asking everybody for that,” he added.

One area in which AFW has had particular success is in picking up goods that other retailers have canceled. Jabs, for instance, bought 21 containers of leather sofas from Synergy after a higher-end retailer canceled them. He’s picked up goods the same way from Manwah, he added.

Of course, these goods still need to be matched with containers and then the containers need to get through congested ports. So “it’s still probably 60 days away,” he said. But that beats starting at the back of the line, as many retailers and consumers are learning.

Jabs said his company also has been reaching out to all its sources, just to ask if they have anything laying around their warehouses they want to clear out of a price. Perhaps surprisingly, many of them do. He’s been taking it off their hands, helping them clear out older stuff, while providing a key advantage to AFW, too: as the store in town that’s filled with merchandise at the best prices.

“Part of the reason I think we’re doing so well is we have merchandise in stock,” he said. “And this comes from the 140 years I’ve been in business.” (The latter is a bit of a fib, considering Jabs just turned 90 in November).

“We buy from 250 companies. We buy from 13 countries. So when China shuts down, Malaysia is open and when Malaysia shuts down, China is open, that sort of thing. We don’t put all of our eggs in one basket. (And notice Jabs hasn’t openly complained about one of the biggest problems continuing to face heavy importers — exorbitant container prices.)

How Jake Jabs's stores stay full of furniture even in times of severe shortages - Home News Now (2)

The morning he left Colorado to fly here, Jabs took a photo from his office window overlooking the warehouse dock, where some 40 containers were waiting to be unloaded. And that’s just Englewood, he said. While the quantities ebb and flow, and AFW could go a week or two with nothing to unload, on that day, at all of the retailer’s warehouses combined, there were probably 200 containers ready to unload, he said.

Contrast that to a photo Jabs shared with Home News Now in September from inside his Thornton, Colo., warehouse, where some of the typically packed racks were bare. Even with all the goods waiting to be unloaded now, Jabs said the situation inside the warehouse today is just “better, but not good” because AFW is selling furniture faster than it is bringing it in.

A few months ago, the retailer was oversold with one unidentified vendor to the tune of 8,000 pieces of upholstery. Jabs called the CEO, who promised to get it to him in three weeks and he did. But in no time, AFW was oversold again by 9,000 pieces, Jabs and going into this Premarket, the oversold position had climbed to 12,000 pieces. Add this up across all suppliers and AFW is oversold on about 100,000 pieces, Jabs estimated.

So is the consumer losing patience? Jabs said no, and this is why: If the company is oversold on any particular item, it’s never for long, not even during this period of severe shortages.

“What we do differently is if it’s out over 30 days, I pull it off the floors. For one, that gets the factory’s attention.” (They don’t want their stuff pulled from AFW’s floors). Today, for every vendor it sells, Jabs estimated one-third of the assortment has been pulled.

“And the second reason I do it is because when people come in, they don’t hear stories about how we’re not getting anything for three, six, nine months or whatever it is,” he said. “The longest we’ve been out is about 30 days. If it’s out of sight, it’s out of mind. People have learned to trust us.”

Some other quick takes from Jake (who one vendor described as the Cher of the furniture industry; you only need to say the first name for people to know who you’re talking about):

About First Tuesday: He hasn’t been and doesn’t plan to start coming. “I don’t think you accomplish anything. Like I’ve said, some of our good vendors don’t even want to show us anything new because they can’t make what they’ve sold. It’s got to be worth your while.”

Is he coming back in June? Jake won’t be back for the regular market, but some of his buyers will be here. His occasional furniture buyer came to Premarket and wants to come back because there are about 20 companies on her list that weren’t open. And the retailer’s ready-to-assemble and home office buyer will be coming as will the new accessory buyer and Jabs’s daughter and company president Jackie Brookshire.

Has the role of markets changed for AFW, and if so, is it a permanent or temporary change? Clearly, there has been a temporary shift at least in the importance of Premarket over Market for Jabs, considering he won’t be back in Jund. “But in my opinion, that’s temporary,” he said. “You don’t need to do both. I don’t need to.” Jabs said he’ll work Premarket hard, and noted that it’s important not just for buying but for the other works he’s doing with suppliers here — going over backorders and “waiting-on-parts’” lists and all the relationship building that needs to be done to keep business humming and returns down to the very minimum. He’d do this at any market, but the problem is he can’t see everybody here.

“So why would I come to Premarket, when some are not even showing? At the regular market, everybody is showing,” he said.

If you take supply chain disruption out of the equation, what else is critically important to AFW right now? What else do you need from suppliers? “Quality,” he said. Today, customers are pickier than they’ve ever been. If this table wobbles or there’s a little scratch, or the leaf doesn’t fit perfectly, the customer won’t buy it. Today you need a five-star customer rating, and you keep it by taking care of people.”

Jabs talked to Home News Now from the showroom of JGW Furniture in Market on Main, but he had has just come from a supplier pitching an upholstered group with all the bells and whistles, “drop-down trays, buttons, massage and heat, all that stuff,” he said. “I told them you’re asking for problems.” This isn’t something AFW is ever interested in, but that’s especially the case now when the delays on parts and other fixes could be as long as every other product delay.

“You need to avoid buying things that cause problems,” he said.

On AFW’s newest market, Houston. Business as its 500,000-square-foot superstore and warehouse in Katy and its 450,000-square-foot facility in Webster, Texas, is great, just like its Colorado and Arizona markets, “up every month,” he said. A third 450,000-square-foot store and warehouse is under construction in Conroe, Texas, and is slated to open in late December or early 2021, “depending on how much rain they get.”

How Jake Jabs's stores stay full of furniture even in times of severe shortages - Home News Now (2024)

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