Power To The People
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By Joe Tatulli


Futon Expres' - Best Total Value Now

There is a phrase used for the historic region which extends from the Tigris River in the east to the Euphrates River in the west. For thousands of years, as the cradle of civilization and because of its rich agricultural and mercantile heritage, this area was known as “The Fertile Crescent.”

There is a modern day “Fertile Crescent,” but it isn’t in the Middle East. It’s in “Middle America” and Dan Neenan, John Smith and Teresa Davis of Futon Expres are the ruling tribe. With eleven futon retail operations stretching from Kansas City, Missouri, in the west, through St. Louis, which is home to seven of those locations and the company’s central distribution center, and up to Chicago, in the east, Futon Express has quietly focused on capturing the futon furniture market in their own little corner of the planet. This is their story and it begins and ends with a total focus on retail and delivering the “Best Total Value Now.”— Editor
More For Less

Dan Neenan, President of Futon Expres’, has been in retail for thirty plus years. Always self-employed, Neenan cut his retail teeth in the seventies with a short run as a restaurateur and a longer term venture selling clothing and records to the students and faculty at the University of Missouri, in Columbia. In 1976 Neenan transferred into the furniture business in earnest with Lifestyles Furniture. “I was way ahead of the curve with Lifestyles Furniture,” said Neenan. “The concept featured KD or knock-down furniture, what we call RTA or ready-to-assemble today. I wanted to sell to people who would drive up and "take it home today." Neenan soon discovered that there was little if any decent product available so while he waited for RTA to catch up he moved into waterbeds. “I had a four thousand square foot store, so I had the room to slide into the waterbed business and we did very well during the waterbed’s heyday,” Neenan said. But he still had the RTA vision of selling utilitarian products that offered real value at affordable prices. Neenan’s first foray into futon furniture led him to From The Source, and in 1983 his futon career began. Today he oversees the management of a company that retains many of the cultural principles and philosophical ideals he’s always seen as core values. “Everything we try to do and all the products we sell are an attempt by Futon Expres’ to provide the futon buyer with a product that delivers more for less,” he said.

Focus Is Everything

“There are three basics,” said Neenan, “focus, teamwork and empowerment.” He defined focus in terms of the product. “Futon Expres’ is a futon specialty store that stays close to its customers,” said Neenan. His office has several framed newspaper articles that feature stories about him and his firm. One article, from 1995, quotes the following: “We stay real close to our futon buyers. If you put out a good product at a fair price and back it up with good customer service there is absolutely nothing that can stand in your way.” Neenan’s business has remained focused on this simple but effective mission statement, and that’s the way he runs the entire operation. Everything seems to be geared toward delivering a real value to the customer.

Each futon store is about 1500 to 2500 square feet and they sell only one thing - futon furniture. Neenan coined the term “formal alternative to the traditional sofa sleeper” to describe what futon furniture is all about. “Focus” also targets what Neenan calls the company’s “core competencies.” “We’re in the futon retail business and for us that means moving inventory through our channels,” says Neenan. Unlike many other futon specialty retailers Neenan’s company is “contractually integrated” not “vertically integrated.” “In the simplest of terms we are a marketing sell through company. Everything else, like product manufacturing, order fulfillment, and advertising is handled by outside experts,” Neenan said.

With the focus on futon inventory the company has built its reputation by buying smart from a limited number of suppliers to whom Neenan and his partners are fiercely loyal.
Futon Expres’ carries Wolf futon mattresses exclusively, gets ninety percent of its futon covers from SIS Futon Covers, and carries futon frames from four major suppliers: Ocean Imports, Lifestyle Solutions by Elite, Coaster, and Renelle.

Teamwork and empowerment, the firm’s other two “focus” buzzwords, have worked hand in hand to insure the development of a company grown team of managers and partners who have learned the business from the ground up.
John Smith, Neenan’s newest partner, started with the company while he was still in college and is now an owner. He started on the front lines and worked his way into this creatively balanced entrepreneurial venture.

“Empowerment gives any employee an open ended opportunity for growth, both personally and financially,” Smith said. It was obvious to me that Dan Neenan’s forward thinking, creative growth strategy has allowed him to both expand his business and assist many young, business minded individuals to not only dream about owning a business but to actually bring those dreams into reality. “I can say this without reservation. If it wasn’t for Dan Neenan’s initiative I would probably not have my own business,” Smith said. Neenan is the company president and head of the mentoring department. As I visited the distribution center and traveled from store to store meeting employees at many levels of management I could sense Neenan’s influence expres’sed in their self confidence. The program is working.

Back To Basics

I have seen quite a few retail ventures in my travels. They do come in all shapes and sizes. Each one has an unique character which is definable. When I made my first conceptual assessment of the Futon Expres’ operational structure it felt like something was missing. It’s just too simple. Neenan agreed and revealed once again his unique approach to running this small but very successful company. “It’s all about getting back to basics,” Neenan said. “Everything we do is designed to deliver customer value, the ‘best total value now’, like our mission statement declares. Our operational excellence is closely tied to several basic facts. Among other things we are centrally controlled; all the buying is done here and that allows all our futon showrooms to price product aggressively.” The home office and distribution center is a 15,000 square foot facility (1000 dedicated to office space and 14,000 to warehouse space) on the outskirts of St. Louis. True to the company mantra, the operation is straightforward and focused on the mission of delivering the best total value now. “We service all of our futon showrooms from this single location,” said Neenan, “Every store is no more than one day away.” This close proximity allows the company to economically deliver to any location and get truck and driver back all in the same day.

Regarding advertising Neenan said, “We plan everything out a year in advance. We know when the sales and promotions will be and we develop our advertising, distribution, and manpower needs accordingly. We look at a running three year average for each futon showroom and those figures guide us with all our plans and decisions.”

Power To The People

At the store level the manager runs the show. “Each store starts the day with an opening procedure checklist,” said John Smith. “And we end the day the same way with each sales order being faxed to the central office for processing through our Myriad computer system. We are then able to track what products are selling and who our top sales people are. These numbers are then compared to the store goals for each individual futon showroom.”
Neenan and his partners have always looked closely at the numbers. “Knowing where you stand allows you to constantly fine tune inventory levels, delivery schedules, employee issues, and advertising and marketing plans,” Smith said.
But people are still the most important part of the mix. “Our retail success is going to hinge upon the commitment we have from our sales staff, and trying to present more opportunities to them,” Smith said. “Dan, Teresa, and I are so thankful to all our employees past and present for the enormous contributions they have and continue to make.”
The biggest problem our company faces is competing in the retail world for quality employees, people that want to commit to us. We are a quality company, and we really want to create an environment that allows our people to flourish by having real time input where they work every day.”

Sleep Certified

Keeping a competitive edge in a crowded marketplace means having a sales force that knows what they are talking about. “All of our employees are ‘Sleep Certified’ for selling our futon mattresses,” said Neenan. The certificate course for sales and product training for futon mattresses was developed by Futon Expres’ in collaboration with their key mattress vendor. The program includes face to face training in product knowledge, features and benefits, customer relations, and selling per se. “We want our customers to know that their sales person has been trained to present our futon sofa sleepers, and introduce them to all the information they (the customer) need to make a wise decision,” Neenan said. Smith added, “We believe that in order to give our futon buyers the very best information about our product line we need to be able to tell them that our sales people have taken a training course which gives them a better product background than our competitors.” Smith was also very vocal regarding sales training as an important part of the industry’s success. “After we put this sleep certification program into place I was impressed with how vital it is to the success of the retail sales person. This kind of preparation should be a part of every futon retailer’s sales plan, because it arms the sales person with knowledge that the consumer needs to choose what is best for their specific needs,” Smith said. It sounded like a win, win to me.


Teresa Davis, Neenan’s other partner, focuses her attention on the showrooms themselves. “We all crave natural things and this product delivers just that,” she said. Davis is an artist and a teacher who brings her design and color sense to both merchandising and the look and feel of what she calls the “retail environment.”

“People want something that is authentic and the futon sleeper sofa gives them that. Natural fibers like cotton and wool, the look of wood and fabrics with textures from soft brushed cottons to rich tapestries bring that authenticity to our futon showrooms.” She uses words like fresh, natural, value and change as she outlines her personal vision of where the company is going next. “Things are always changing and the futon sleeper sofa is the product that adapts to any decor or fashion statement the consumer wants to make in their home,” Davis said.

The Magnifying Glass

“You know, it’s like we’ve said all along, it’s all about focus,” said Neenan. “When I was kid we would try to start a fire with a magnifying glass. If you held that thing steady in the bright sunlight you could start a fire in a couple of seconds. But if you jiggled it at all you couldn’t do anything. Business is just the same.”

Neenan and company look at their business through the magnifying glass. “If we lose focus, and at times we have done just that, we can’t accomplish our mission,” says Neenan.
Neenan sees his competitors as Jennifer Convertibles and La-Z-Boy, two of the nation’s largest and best known sleeper sofa brand names. “They are our competition, but we have a better product, with greater value for the customer. We need to be the alternative, like Jerry Epperson said in Orlando (at the Futon Show), focus on being the alternative sleeper sofa. That’s just what we have to do,” Neenan said, and they are doing it.


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