Carpet Call renovates retail model

unnamed-4Carpet Call’s new form of franchise – which it dubs the ‘modular franchise’ – has increased its reach in 2015. While first offered three years ago, demand for the flooring retailer’s smaller, bolt-on business model has noticeably ramped up in the last 12 months.

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Carpet Call branded, and another 60 franchises under is other brand, Solomons Flooring. Of those 82 franchised stores, 25 are modular, and the split is all but equally divided between its two brands.

Explaining the genesis of modular franchises, Carpet Call national franchise manager and GM marketing, Grant Miles, told, Inside Retail PREMIUM that, “They are deals where we approached an existing linked business, such as a ceramic tile retailer, and asked them to consider taking on one of our franchises, and have a business within a business.”

Within the next 12 months, Miles anticipated that another, “half a dozen”modular franchises will be opened around the country. Testament to this chosen method of expansion, Miles singled out a retail store in Bendigo, Victoria that took on such a franchise. Now, the carpet side of the business eclipses its tile side.

“In Bendigo, years ago that was only around a $2 million tile shop,” he said. “We put vinyl, timber and carpet, and our own franchise in there, and now it’s turning over in excess of $5 million – within the same premises.”

Placing modular franchises

Businesses taking on a modular franchise maintain the same rent, and staff – who are then trained by Carpet Call. Mobile stands of flooring samples can be placed in a 50sqm section of showroom areas. Carpet Call has also consulted with other linked businesses, such as furniture shops and window furnishings retailers, to place these modular franchises.

“They can, in a lot of cases, double their turnover for little overhead,” Miles said. “A lot of people need to add on a bolt-on business to make it viable, especially in a rural town, where they might be struggling. They’re taking on our franchises and not only surviving, they are thriving.”

The modular franchises tend to be more popular in regional areas because rental spaces aren’t as expensive as in city areas and the showrooms are often larger. The showrooms may be 300sqm or 400sqm in size and often have portions that don’t work for the business, are under-utilised, or used merely to store discontinued products.

“Modular franchises are the way we’re going and we’re happy with it,” Miles said. “There’s a lot more life still left in it. It’s the only way to go for a lot of our retailers; they have to keep their own overheads in check, and they’ve got to find new ways of making dough. They’ve got to have a different product offer.”

Modular part of a master plan

This modular format seems to be part of a wider business model evolution for Carpet Call, where customers who are renovating their homes are looking for a one-stop shop for all their reno requirements. Complementary products, such as window blinds, are now increasingly being offered in Carpet Call stores.

“If they trust the brand, they want to do quite a fair bit of their home improvements at the one stop – they don’t want to go and get carpet, and then go down the road and pick their floor coverings or window furnishings. We’re finding we’re getting a lot of bundle deals in our shops.”

In terms of Carpet Call’s market, as first-home buyers are often contractually tied to their builder for fixtures and fittings, customers are usually at least second home buyers and in the 30 plus age bracket.

“We’re after the second home buyer or third or fourth home buyer; invariably those people buy better quality product – they are looking at getting a superior product down,” Miles said. “We’re a renovation market.

“We’re lucky in our industry that you still need to feel and touch it [carpet/flooring]. And the other thing is the service related component, because we’ve got to go out, measure and install.

The whole combination keeps us buoyant. We can still have the retail presence where people need to come and see us, or ring or ask for someone to come out to their home and measure up and select some flooring.”

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