Hartford Business Journal

4 HARTFORDBUSINESS.COM | FEBRUARY 14, 2022 Business Strategy AT A GLANCE Company: Pilgrim Furniture & Mattress City Industry: Furniture retailer Top Executive: Mike Albert, CEO HQ: 55 Graham Place, Southington Website: https://www. pilgrimfurniturecity.com/ Phone Number: 860-276-0030 Family-owned Pilgrim Furniture undergoes leadership change, as housing boom, remote work aid pandemic recovery By Matthew Broderick Hartford Business Journal Contributor L ike many retail businesses, Pilgrim Furniture & Mattress City took a direct hit at the onset of the pandemic. The family-owned business — with locations in Southington and Milford — was forced to temporarily close its doors for two months in 2020, but weathered that impact with a $1.1 million Paycheck Protection Program loan, which was used to cover expenses including its commercial mortgage, insurance and employees as sales halted significantly. But fueled by a combination of stimulus spending, a hot housing market and sharp increase in the number of people working from home, Pilgrim rebounded last year with revenues up 20%. "Customers are spending a lot of time at home and so we've seen [investment] in home office furniture, living rooms and recliners," said Mike Albert, Pilgrim's CEO who, after 40 years of running the company his father founded in 1961, recently turned over the day-to-day operations to new President Steve Bichunsky. As part of the management restructuring, Albert's daughter, Amy Albert, was named CFO. Nationwide, furniture and bedding sales reached nearly $120 billion in 2021, a 4.5% increase from 2020 — the largest year-over-year gain since 2012, according to Furniture Today, a trade publication that tracks the industry. That upward trajectory is expected to continue this year, but there are headwinds, said Amy Albert, the fifth generation of Alberts to commit to the furniture business. "We're seeing a significant increase in the cost of goods, and the [supply chain] shortages definitely impact us," she said. According to the U.S. Labor Department's Bureau of Labor Statistics, the consumer price index rose 7% in 2021, the highest increase since 1982, with the price of furniture and beddings up 13% in December compared to a year earlier. There's also increased pressure from online furniture sales. In 2021, home furnishings represented more than 17% of total e-retail, according to market data from Statista. But the online furniture retail segment is projected to decline, while the direct-to-consumer channel — fueled by giants like Wayfair and Amazon — represented the fastest- growing segment of the furniture industry. Those trends have ratcheted up pressure on brick-and-mortar retailers like Pilgrim Furniture, which has made some significant real estate moves over the past year. In April 2021, the company liquidated its 38,000-square-foot Manchester location, a decision that Mike Albert said was driven by a desire to create a more consistent customer experience at Pilgrim locations. The remaining Southington and Milford stores, for instance, feature carousels and 90,000-square- foot showrooms. Attractions like carousels are increasingly being used by traditional Steve Bichunsky (left) is president and Michael Albert is CEO of family-owned Pilgrim Furniture & Mattress City. PHOTO | CONTRIBUTED retailers to lure people to their stores. In December Pilgrim sold for $10 million its Southington property, which also includes a 70,000-square- foot distribution center, to real estate development and investment company Winstanley Enterprises. Pilgrim has inked a four-year deal to lease the property with the option to extend. Mike Albert said the sale was prompted by a strong real estate market and record-low capital gains tax rates. He did not disclose how the privately-held company intends to use proceeds from the sale. Despite the uptick in e-commerce competition, Amy Albert said Pilgrim still maintains an advantage by having brick-and-mortar locations. "People do a lot of [shopping] research online, but when it comes to furniture, I think the majority of customers want to see it, feel it, or sit on it before they put it in their home," she said. Tech investment As Pilgrim's new president, Bichunsky — who has served as the company's director of purchasing for the past 20 years — said customer service is priority No. 1. The company has upgraded its computer systems and given tablets to its sales team so they can provide customers with real-time inventory availability, a heightened value in the current climate of backlogged orders. The company also touts its local ownership, a rarity in the furniture business these days. "We like to say we're family owned and Connecticut grown," he said. "In a world of big-box stores owned by banks and investment companies, we're proud to be independently owned and keep that tradition moving forward." It's an industry landscape that has changed drastically over the past half-century, said Mike Albert, who remembers an era when many towns across the state featured multiple furniture stores. "There were 200 or 300 furniture stores, family businesses, but they didn't modernize," Albert said. "Today there are four or five major stores in the state that probably do 90% of the business." Pilgrim is among them, Albert said, because throughout its history, every few years, the company would move to a larger, more prominent location, eventually landing at the former Levitt's spot at 55 Graham Place in Southington, which provided the largest furniture showroom in the state, visible along I-84. "Being a fifth generation [family member] in the business is an accomplishment," said Amy Albert. "My family has been able to ride the waves of the economy through tough times and grow when we've had the opportunity." Pilgrim Furniture & Mattress City recently sold its Southington property in a $10 million sale-leaseback deal. PHOTO | COSTAR

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