Built to last: Venerable furniture dealer crafts its future Built to last: Venerable furniture dealer crafts its future Doerr Furniture Inc. has traversed recessions and competition BY KATHY FINN| Special to The Advocate June 21, 2014 Comments A 76-year-old family-owned company whose business is selling solid wood furniture and rich textiles has withstood most tests that a changing economy can toss its way. Doerr Furniture Inc. has traversed recessions and competition and even spawned a separate chain of 12 Bedding Plus mattress stores as the businesses cross into a fourth-generation, a critical period in the life of a family business. Family-owned companies are part of the rich tradition of American enterprise. But keeping a successful business intact as it passes through family hands is not simple, said Ralph Mauer, who is executive director of the Levy-Rosenblum Center for Entrepreneurship at Tulane. Navigating the transition requires careful planning. The owners at Doerr Furniture say they are on it. Doerr Furniture began its life not as a retailing business but as a wholesaler of rocking chairs. Charles Doerr Sr., who had developed health problems during years of working in a local insulation plant, began making the rockers and selling them to furniture dealers as a means of supporting his large family. In 1938 he expanded into other furniture items, opening Doerr Furniture at the corner of Burgundy Street and Elysian Fields Avenue. A decade later Doerr’s youngest child, Marilyn, introduced new blood into the company by marrying Lloyd Mutter, who eventually would take the reins at Doerr Furniture. Once their five children were mostly grown, Marilyn would join him in the business. Marilyn and Lloyd Mutter, now retired, long ago turned management of the business over to their children. The couple continue to live in the same Metairie home where Charles Doerr hatched his business plan. Julian Mutter, the eldest of Marilyn and Lloyd’s children, began learning the family business at an early age. He was 8 when he took a weekend job dusting furniture, and during his teens he started managing inventory, keeping track of every item via handwritten accounts. “Daddy hated inventory, so as soon as I was old enough, he said, ‘You take it,’ ” Julian Mutter recalled. By the time Mutter graduated from Tulane University and stepped into the business full time, Doerr Furniture Inc. had morphed into a retail operation that was using discounted prices to compete with local dealers of the time, such as Mintz Furniture, Kirschman’s Furniture, Max Barnett Furniture Co., Dixie Furniture Co. and a few department stores. “Stores like D.H. Holmes and Maison Blanche would advertise and show the furniture, and buyers could save money by getting it from us,” said Mutter, who became president of the company in the mid-1980s. As discounting became increasingly competitive, the Mutter family saw that their business needed to distinguish itself in ways other than price and selection. “Somebody is always willing to sell something cheaper,” Mutter said. And the size constraints of Doerr Furniture’s Elysian Fields store and warehouse made it tough to compete with larger retailers in terms of wide selection. Mutter said it became clear that the focus should be on the furniture. Doerr’s solid wood tables, dressers and armoires stood out during a time when cheaper furniture made from composites, such as particle board, was flooding onto the marketplace. Shoppers also saw Doerr’s upholstered sofas and chairs as being better crafted than some competitors’ lines. “We weren’t going for high design or high fashion, it had more to do with nicer products,” Mutter said. Over time the family began to see that while manufacturer names played a role in shopping choices, what seemed to matter more was the consumer’s regard for the retailer. “We’ve learned that the individual store is the most trusted brand,” Mutter said. Three of Mutter’s four younger siblings followed him into the business as they completed their education. Today, Julian Mutter is the firm’s general manager; David Mutter manages marketing and advertising; Randy Mutter runs the warehouse; and Melanie Mutter Giglio is office manager. When their second-oldest sibling, Gary Mutter, returned to New Orleans in the 1990s after years of living in other states, he became a sales manager for Doerr Furniture and eventually came to head a sister company. Julian Mutter said it was a business born of necessity. “As my siblings got older, I knew their monetary requirements would increase,” he said. The company needed to figure out how to generate significantly more sales. Their solution was Bedding Plus Mattress Co., a separate business owned by the Mutter siblings that eventually would put a string of mattress specialty stores around the region. The move into a bedding specialty business seemed a no-brainer given that mattresses typically accounted for as much as 20 percent of sales by furniture retailers. But the family made the mistake of putting newly hired “outsiders” in charge of their first two stores, with poor results. “We were selling the products too cheaply, and didn’t control the inventory properly,” Julian Mutter said. “We fell flat on our face.” After two years of bleeding money in the mattress business, the family turned its management over to Gary Mutter, who’s nickname is “Bulldog.” “He turned it around pretty quickly,” Julian Mutter said. With its warehouse and headquarters office in Hammond, Bedding Plus has grown to 12 stores, with one in New Orleans, three in Metairie, two on the West Bank of Jefferson Parish, and one each in Denham Springs, Covington, Slidell, and Gulfport and D’Iberville, Mississippi. Trade publication Furniture Today named Bedding Plus as one of three “Retail Giants of Bedding” during a recent industry conference in Florida. Gary Mutter, who continues to run the business, said more store openings are likely during the next three years. Like many other local retailers, business at both Doerr Furniture and Bedding Plus received a huge jolt from the citywide disaster of 2005. The Hurricane Katrina flood that destroyed thousands of local homes sent throngs of shoppers in search of new furniture and bedding. Doerr Furniture put a chunk of its resulting profit into an extensive renovation of its store. Ironically, the work wrapped up close to the time when the national economy began slipping into recession. Mutter said the company lost all the ground it had gained after Katrina and then some. “I’ve been through every recession since about 1968, and I’m not going to say this one was the most severe, but it was the worst because it was so long,” he said. Painful cost-cutting got the company through the downturn. When the clouds began to lift, it was clear that Doerr Furniture was emerging in an improved position. “Recession can be healthy in that it forces a company to really analyze their operations and business model … and now we’re enjoying the fruits of that,” Mutter said. A strong upturn in sales at Doerr Furniture in the past few years seemed to track the industry at large. Data compiled by the Retail Owners Institute show that pre-tax profits at furniture retailers around the country have climbed steadily since 2010, with profits last year increasing about 4 percent over 2012. Large-volume retailers like Ashley Furniture, Ikea and Rooms To Go now account for 40 percent of furniture retailing income, and the growth of those chains has squeezed many smaller furniture retailers out of the picture. But analysts say the market still has an appetite for the products of family-owned businesses that are known for quality. “The family-type stores cover what I call the middle market,” said Peter Tourtellot, managing director at North Carolina retailing consultant Anderson Bauman Tourtellot Vos & Co. He said that while stores like Rooms To Go appeal to younger buyers and those who are furnishing their first homes, smaller stores that put quality furniture in their showrooms and control the customer experience from shopping through delivery still appeal to buyers who appreciate good furniture. “It’s a challenge to deliver that furniture in first-class condition to the customer, just as it came from the manufacturer,” Tourtellot said. “Those that do it well will continue to make money.” Mutter said that Doerr Furniture, which employs its own delivery personnel and provides a satisfaction guarantee, will keep focusing on the customer experience as it seeks to build business using products from Stickley, Flexsteel, Durham Furniture and other manufacturers. “I see us sticking to our core values of quality furniture and serving the customer very well,” he said. Among other things, Mutter said that will mean expanding the company’s interior design services in the near future. Meanwhile, the business is tackling the transition into its fourth generation: in addition to the five Mutter siblings, five other family members now work at Doerr Furniture and Bedding Plus and could one day be in line to take charge. Tulane’s Maurer cited the challenges that many family businesses face as they bring on more family members. The additions mean profits must stretch further. Also, when those operating the business are not siblings but cousins, their inter-relationships may not be as close. In addition, younger family members sometimes do not have the same aptitude or enthusiasm that previously kept the business percolating, he said. But Maurer said the New Orleans area is home to “an unusual number” of family businesses that have survived and thrived through their fourth generation. Achieving that goal usually requires that a business adopt a more corporate structure that separates owners from managers, narrows the number of people who are materially involved and perhaps puts non-family members on the board of directors. “It’s hard, but the good companies hunker down and make the tough decisions, and they’re the ones that survive,” he said. Julian Mutter, 64, declined to discuss details of the company’s long-range plans but said that Doerr Furniture intends to remain a major player in local furniture retailing well into the future. “We are right now very much tackling our succession plan,” he said.