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By Kent Larsen
Never on Sunday, Not Even in Las Vegas
SOUTH SALT LAKE, UTAH -- Utah furniture and electronics retailer R.C. Willey
Home Furnishings already has a store in Henderson, Nevada and plans to open
two more stores in the Las Vegas area, presenting what may be the biggest
challenge in the company's 69-year history. For the first time the company
is moving into a city larger than Salt Lake, and, more importantly, a
significantly different lifestyle, one potentially at odds with R.C.
Willey's longstanding policy of closing on Sunday.
That policy's roots lie in the company's Mormon background. Founded by LDS
Church member Rufus C. Willey in 1932, the company first sold appliances
door-to-door until Willey opened a 600-square-foot appliance showroom next
to his home in 1950. His son-in-law, Bill Child, took over the firm in June
1954, when Willey was diagnosed with pancreatic cancer. He died that
September. "I knew a little about the business, but not much," Child says.
"But that didn't matter. There was no one else to run it."
But Child learned quickly, and soon opened a 2,400-square-foot showroom in
Syracuse, Utah just two years after taking over the business. From there he
expanded the company's locations, adding a second store in Murray in 1969,
followed by one in Taylorsville in 1986, Orem in 1990, South Salt Lake in
1991 and Riverdale in 1996. Each of these stores had about 100,000 square
feet. He also expanded the company's product line, adding electronics, a
carpeting, and even clearance centers in Salt Lake County, West Jordan in
1994 and Provo in 1998.
Then in 1995, Child sold the business to investor Warren Buffett's Berkshire
Hathaway for $150 million in stock in Buffett's company. Child's shares were
then worth $22,000 each, and have since grown to more than $74,000 a share.
"My son encouraged me to take at least some cash," Child said. "I'm sure
glad I didn't."
In typical Buffett fashion, Child remains R.C. Willey's chairman, and he and
his family still run the business, now part of Berkshire Hathaway's
furniture division, at $830.6 million in sales the fourth largest furniture
retailer in the U.S. R.C. Willey has sales of $400 million, 60% of that from
furniture sales, and the company expects to have sales of $500 million next
year.
But the purchase by Berkshire Hathaway hasn't been without problems, the
biggest of which came when Child proposed opening a new store in Boise,
Idaho. Buffett opposed the move, believing that a store in Boise needed to
open on Sundays. But Child persisted, offering to buy the land for the store
himself for $9 million, and sell it to Buffett at cost if the store
succeeded. "The agreement was if the store succeeded, I'd sell it back to
him at cost," Child said. "If it didn't do well after six months, we'd walk
away. Thank heavens it was successful." The store was hugely successful,
within weeks cutting the profits at its competitors by 20 to 40 percent.
With that precedent, R.C. Willey is moving on to Las Vegas. But in Vegas it
may face even bigger risks. Unlike in Utah, and even in Boise, where a
significant minority of the population is LDS, Sunday is a big shopping day
in Las Vegas, "I know in Salt Lake City people are not acclimated to
shopping on Sunday, but here it's an important shopping day," said Larry
Alterwitz, CEO of Walker Furniture, Las Vegas' largest furniture retailer
and R.C. Willey's primary competition in the city.
But for R.C. Willey's future, the move to Las Vegas could answer an
important question. Furniture industry data indicate that Sundays are
important shopping days nationwide, with some companies generating 20 to 35%
of their weekly business on Sundays. Because of this, R.C. Willey's future
success outside of Mormon areas or other areas where Sunday shopping is weak
may be seen in its success in Las Vegas. Given the company's success
otherwise, if it can't succeed in Las Vegas, it seems unlikely that other
business that don't open on Sundays will either.
Source:
R.C. Willey Will Gamble in Sin City, But Not on Sundays
Salt Lake Tribune 21Oct01 B4
By Lesley Mitchell: Salt Lake Tribune
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