At a time when many major electronics and furniture retailers are scaling back operations, the Nebraska Furniture Mart is moving forward with construction of a third full-line store north of Dallas.
The expansion — the anchor for a $1.5 billion retail, dining and entertainment center roughly the size 40 football fields — will require additional staff here in Omaha.
“More accountants, more people to run things,” said Robert Batt, the company's executive vice president.
At its flagship campus on 72nd Street in Omaha, the company has “simply run out of room,” said Mark Hamilton, the company's marketing director.
To boost space, the Mart purchased a two-story, 44,000-square-foot office building in June at 808 S. 74th Plaza for $1.2 million, and is spending $7.4 million on renovations.
The new brick “wing,” which is being remodeled in anticipation of the company's May 2015 opening of the Dallas store, will become part of the Mart's corporate headquarters.
The roof has been replaced and the building has been rewired. Now the interior is being refinished for occupancy this spring, Batt said.
Batt said it will house at least 175 workers, the same number of people the Mart has said it plans to hire in Omaha over the next three years.
Batt would not say whether the Mart has begun hiring for those positions. “The important thing is we are reinvesting in hometown Omaha,” he said.
Situated less than 500 yards from the Mart on 72nd and just south of Rose Blumkin Drive, the building will provide space for our “credit department and call center and IT division and other people who work day-to-day but don't need to be close to the customer,” Batt said.
Those departments — the so-called “backroom” departments — are critical to any retailer's functioning, and are one of the keys to the Mart's success, said Ray Allegrezza, editor-in-chief of Furniture Today, a trade publication.
“I think of the Blumkin family as wizards who happen to sell electronics and furniture,” he said. “They understand backroom functions, which is not sexy, but it allows them to run a ship that big.”
Backroom employees are the “unsung heroes of logistics,” making sure items are in stock and delivered on time to customers, Allegrezza said. When you're in a war, he said, the most important guys are the ones behind the line that feed the artillery and provide supplies to the front lines.
“Without them you don't have product where it needs to be, you are missing delivery dates and customers don't come away from the store with a satisfactory experience.”
While the Great Recession put the kibosh on other retailers' expansion and in some cases forced them to close stores, the Mart is going forth with expansion plans it formulated nine years ago.
“When the Kansas City store opened in August 2003, we said, 'This is great. We should do it again under the right circumstance,'” Batt said.
The Mart scouted locations in major cities from Indiana to Arizona to Colorado and California, finally settling on a 433-acre tract in a north Dallas suburb.
A smart choice, Allegrezza said, adding, “They have a strong balance sheet and this is a great opportunity to acquire prime real estate.”
While other electronics and appliance chains may operate tens or hundreds of locations, the Mart will have just three full-line stores when its new Dallas store opens in May 2015.
The Mart, a Berkshire Hathaway Inc. company, is “lean and well-positioned,” Batt said.
If other major retailers have acted like hares in the past, adding stores at breakneck speed, the Mart has been a tortoise, albeit a giant one, making slow but big strides.
“We're a very conservative company, and we make giant leaps forward,” Batt said, describing the company's move into Texas as “well-planned and well-executed.”
And when a location calls for a big store, as it does in the Dallas area, the Mart doesn't cut corners, Batt said: “We build according to the expected population, and there are 6.8 million people in the Dallas-Fort Worth area.”
He said he had no announcements to make about other tenants for the project, but he's convinced that “once people see how beautiful it is, it will attract more business.”
“It's a funny thing about the home furnishing business,” Batt said. “People always need refrigerators, beds, couches ... .”
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Room to grow
This is the fifth in a series of stories about companies in the metro area that aren't deterred by uncertainty over the fiscal cliff and are building, expanding or renovating headquarters here.
Coming Friday: Ballantyne Strong