Total Make-over

by Howard Shingle
Photography by Davis Barber

To be successful as a window coverings retailer, you must know how to run a business successfully. Roger O'Brien and Art Schumann are experts at that. From retail and manufacturing operations to corporate finances and management, O'Brien and Schumann understand how a business should operate. Most of that knowledge came from their experience as CPAs at Arthur Andersen, one of the nation's "Big Six" accounting firms. Their knowledge of the window coverings industry came later, after they had purchased 3 Day Blinds, a chain of stores manufacturing and selling private-label mini-blinds which they since have built into what is billed as the largest independent custom window coverings retailer in the United States with 170 stores in 13 states and a 200,000-square-foot manufacturing facility and corporate headquarters in Anaheim, CA. It was while working at their own business focusing on mergers, acquisitions and general consulting that the two were presented with what O'Brien, 3 Day Blinds' executive vice president and chief financial officer, calls "a tremendous opportunity." "Somebody literally dropped an investment package on my lap over dinner one night," O'Brien says. "I looked at it, took it home and called Art in the morning and said, 'We've got a hot one here that I really like. Let's move on it.'" It didn't concern them that at the time they had no background in the window coverings industry. O'Brien explains that his partner, Art Schumann, now president and chief executive officer, had a significant background in manufacturing and retail, essentially what 3 Day Blinds was all about, and previously had built up a national retail florist chain. "We ran it like we would run any company and learned the industry in the process," O'Brien says. But after pulling together the financing and taking over operations in 1989 what Schumann and O'Brien found was a diamond in the rough. The company was successful, it already had a string of 89 retail stores in California, Arizona and Nevada and enjoyed a near-monopoly position based on price and delivery, but it had deep-rooted problems and was headed nowhere. O'Brien says nearly every aspect of the company's operation needed improvement: product quality, customer relations, the quality of management and control procedures. In addition, operations were "very manual" with no computers and no market research. Even employee relations were hostile. "The manufacturing and corporate facilities were grossly inadequate. One of the first things we did was to locate, build-out and move into totally new facilities," O'Brien says. "The company today, other than its name, bears no resemblance at all to the company we acquired in 1989. None. It is drastically different," he says. Modernizing Operations A profile of 3 Day Blinds today is extensive and full of superlatives starting with its new facilities. It is a "very efficient, very modern" facility, O'Brien says. It even houses manufacturing machinery 3 Day Blinds had to develop on its own. "We have equipment that nobody else has that makes us more efficient," he says. The corporate office also is home to its employee training program, which includes "10 days of very intense training" and turns out store personnel who are "very well trained and knowledgeable," O'Brien says. The program, detailed in a series of six two-inch binders, covers store operations, product information, making repairs, ordering product and the in-store computer point-of-sale system. Each day trainees must pass a test entitling them to continue to the next day's session. This program follows two to three weeks of training at the store level, O'Brien adds. The company's product line is all inclusive. "We market ourselves as the window coverings specialist, and to support that we have to carry everything," O'Brien says. 3 Day Blinds manufactures four different lines of mini-blinds, carries "the full thrust" of vertical blinds, is "heavily into" new two-inch PVC horizontals, offers one-inch and two-inch wood blinds in "a couple of different quality levels", sells pleated shades and single- and dual-celled cellular shades. What the company does not or cannot manufacture, it carries as outside branded products such as shutters, decorative hardware and fabrics. "We're just starting to get into custom-made curtains and draperies," O'Brien says. "We have to keep abreast with changes and trends. That's an issue as to what makes us successful. One of the trends going on in the industry is the combination of hard and soft goods. We think that's a positive trend -- it enhances the sales opportunity -- and we have to be there for it," he says. As to product quality, it's "the best available" or it's "very good quality for the price because we offer a number of quality levels within each product category," O'Brien says. "We've just become the first company authorized by Levolor to fabricate a Levolor product and put Levolor's name on it," he adds. 3 Day Blinds excels in two other areas: market research and computerization. "Our market research is second to none," O'Brien says. Undoubtedly, it was vital during the company's two waves of expansion -- in 1990-91 it opened 40 new stores and expanded its reach to seven states, and in 1994-95 another 40-plus opened adding six more states. The expansion made good business sense. "We wanted to branch out from California just to take care of the geographic risk we had by positioning so many stores in one economy," O'Brien explains. But it was backed by solid market research. "We know very well who our customer is, and we also have a good feel for what it takes in a market for a retail store to be successful. We have specific demographics that we look for in a market in terms of population density, income levels, home ownership and the like. We look for the geographic areas that fit our distribution channels and meet those demographics," O'Brien explains. When the market research is done right, it doesn't seem to matter if the area targeted for a new store also has its share of competition. O'Brien says 3 Day Blinds does not shy away from the big box stores, "If the real estate demographics are there, and if our customer is there, we don't care who else is there," he says. O'Brien calls 3 Day Blinds "the most computerized company in the industry," and that may be so. From virtually no computers in 1989 the chain has developed an extensive network that allows the corporate office to exchange information with each store daily. O'Brien explains that every night, the corporate center pulls daily activity information from all the 3 Day Blinds stores including sales and orders. This information generates computerized job tickets that are forwarded to manufacturing by four o'clock the next morning. The network, of course, is a two-way highway. Each store can use its computers to give quotes, arrange for measuring and installations as well as to download current pricing and delivery times for ordered products, track back orders and find "just about any information they want on any order," O'Brien says. In turn, the corporate office can upload daily memos that will let each store know what's going on in terms of advertising, human resources and any changes in products or manufacturing. Innovative and Responsive Constant experimentation and change is yet another area in which 3 Day Blinds distinguishes itself. "It's not just a willingness, but a strong desire to try new innovative things," O'Brien says. "We are always testing something new in some segment of our retail structure -- product, pricing, you name it," he adds. One of the most visual experiments was the opening of 3 Day Blinds & More, a much larger, more upscale version of the company's typical retail outlet. According to O'Brien, during its expansion periods the company used a cookie-cutter formula to open new outlets. These were 1,200-square-foot stores with one to three employees selling 100 percent custom products. Because 95 percent of sales are made in the store, full-size products are displayed in an environment customers are likely to find in their own homes. The launch of 3 Day Blinds & More enlarged this retail concept to encompass 5,000 to 7,000 square feet of display space highlighting both hard and soft window treatments. The stores are beautifully decorated and merchandised, O'Brien says. "They are laid out nicely, are nicely carpeted and decorated with modular furniture," he adds. Each product vignette has separate flooring and separate paint or wall covering to showcase the window treatment and accessories displayed. "You'll find everything from a Jacuzzi to a bed or sofa sitting next to these vignettes," he says. As in all 3 Day Blinds stores, many of the window coverings are displayed in actual window frames backlighted to simulate sunshine. At a 3 Day Blinds & More, these window are backlighted with scenic photographs enlarged to simulate an actual exterior. For example, one shows a golf course fairway, another Lake Tahoe in the winter with snow on the mountains. To cover both sight and sound, several product displays are equipped with an audio system. Customers can push a button to hear everything they would need to know about what they see: the specific window coverings, how to create the look, and its benefits. "It's meant to be enjoyable, and it's meant to be informative," O'Brien says. Just this past September, the company opened its fourth 3 Day Blinds & More outlet near its corporate headquarters in Anaheim. The company's venture into custom draperies is its latest experiment, which still is in its infancy, according to O'Brien. "We want to walk before we can run," he says. It cuurently has a local workroom/jobber making the 3 Day Blind draperies and that arrangement is working very well, O'Brien says. "You have to acknowledge that custom curtains and draperies represent only two percent of the curtain and drapery market. Ready-mades are about 93 percent; made-to-measure about five percent," he adds. Finally, 3 Day Blinds' strength lies in the fact that it is both manufacturer and retailer. Historically, that combination gave the company its large market share. O'Brien recalls that in 1989, customers could order custom, branded mini-blinds and wait four to five weeks for delivery, or go to 3 Day Blinds and get a mini-blind product (albeit of lesser quality at that time) and pay 75 percent less and get it in three days. "Given that choice, it was an easy decision for the consumer," he says. But being both manufacturer and retailer has been instrumental in keeping 3 Day Blinds innovative and responsive to consumers, which has had a direct effect on the products it offers. O'Brien believes it's not enough for manufacturers to talk to their fabricators or to their own internal marketing departments because they won't learn what consumers want. "We are a retailer and we get daily feedback because we talk to our stores and they talk daily to customers," he says. "If there are colors that they want, if there are styles that they want, if there are products that they want and aren't being offered, we have corporate hot lines for our store personnel to call in on and they will tell us -- daily." O'Brien says there are no plans to expand beyond window coverings as he and Schumann prefer to be masters of one trade rather than jacks-of-all-trades. As for what might be on the horizon, O'Brien says 3 Day Blinds will expand on what works and discard what doesn't, and as always remain open to new possibilities. "Whatever works," he says.

More Articles by Howard Shingle  More Cover Stories Business experts Schumann and O'Brien have become window coverings experts as well.