October 9/16, 2017: Volume 32, Issue 9
By Ken Ryan
Empire Today, the shop-at-home giant, has closed its three stand-alone locations in New York and Virginia, and shuttered its store-within-a-store concept in JCPenney locations in Florida and Tampa, FCNews has learned.
There was no official announcement from Empire Today, nor private equity firm H.I.G. Capital, which acquired Empire in November 2016. Brian Schwartz, executive managing director of H.I.G., did not return calls for comment. (In announcing the acquisition of Empire Today last November, Schwartz said, “We are very excited to partner with Empire Today. The company is a market leader with a compelling customer value proposition, a unique business model, an incredible brand and significant growth prospects. We see tremendous opportunities in the business and look forward to supporting Keith Weinberger and the entire Empire team.”)
Weinberger, CEO of Empire Today, told FCNews that he could not comment on the store closings; an internal email to Empire Today employees notified them that all physical locations, including JCPenney store-within-a-store formats, would cease operations at the close of business on Sept. 22. A sign posted outside the vacant Westbury, N.Y., location read: “As of 9/22/2017 Empire Today Retail Stores are permanently closed.” In the parking lot at the rear of the building, piles of inventory were sheltered under blue tarp with a message scribbled: “Scheduled for pick-up. Do not touch.”
The abrupt closing stood in stark contrast to the much ballyhooed grand opening Empire Today threw in February 2015, when it opened brick-and-mortar stores on Long Island—in Westbury and Commack—and in Fairfax, Va. To kick off the launch, Empire Today hired singers and other entertainment acts and talked about the physical locations as a natural extension of the shop-at-home business.
What went wrong?
Executives whose companies supplied Empire Today stores said the company failed on many fronts. One carpet mill executive who attended the grand opening in Westbury told FCNews, “It seemed like they were doomed before they ever got off the ground. They never manned their stores with people who knew the business well; they never promoted their stores; they didn’t do much with updating their showrooms, and they were closed-minded. When we made suggestions on certain products, they said, ‘We will do business our way.’ They never listened to us.”
Bill Schollmeyer, CEO of Johnson Hardwood Floors, said he, too, was not surprised by the failure. “They didn’t sell [anything] for us. It’s kind of scary when a big company with cash behind it and a really attractive store doesn’t make it. But I’m not really surprised. We had basic hand-scraped ¾-inch solid samples in there and they didn’t sell anything to speak of. It should have been a no-brainer.”
Another industry source told FCNews the Empire Today locations closed because they did not meet expectations.
Specialty flooring retailers who learned about the closings said succeeding in the flooring retail channel takes a special commitment and that business size does not matter if the model itself is not trustworthy. “Businesses like Empire Today don’t sell tactile product the way we do—they specialize in selling dollars, not floor covering,” said Steve Weisberg, president of Crest Flooring in Allentown, Pa. “To be successful in our type of business you need to be sincere in everything you do and follow through with your promise to do good work. No matter how big you are, you cannot lose sight of that fact or else you lose.”
Adam Joss, co-owner of The Vertical Connection Carpet One, Columbia, Md., agreed, adding that scale alone does not guarantee success in the floor covering arena. “There’s always the David vs. Goliath cliché. Small businesses have the benefit of being more nimble and more passionate with a better sense of their local market. There’s also a lesson here for us—large companies will test new products, services and models all the time. Some work, some don’t. And that’s OK. We can’t be afraid to test and fail. The world is constantly changing and we need to change with it.”
In May 2016, Empire Today announced an agreement with JCPenney to open its own stores within certain JCPenney locations. At the time, Weinberger told FCNews the JCPenney test enabled Empire Today to expand its physical presence without the cost of building a new facility. “This is much more efficient,” he stated back then.
In mid-September, Johnson Hardwood was about to place a 24-SKU program in several JCPenney locations, but the supplier said those orders were abruptly halted. “I was told the entire program was dead,” Schollmeyer noted.
JCPenney, which has had its own struggles, announced earlier this year its own plans to close 138 stores by year’s end. It did not include any of the stores with Empire Today.