Leonard and Paul Frankel describe how they turned their father’s retail furniture chain into a successful wholesale venture.

During the 1970s, Leonard Frankel worked along side his father, Bernard, in one of the leading furniture retail chains in New York City. Leonard started importing goods from Italy, which, in the early ’80s, was unusual in the furniture industry. But when Bernard decided to bow out of the business in 1984, he sold it to Leon Levitz, the founder of Levitz Furniture.

“At that point, I needed something to do,” said Leonard. “I understood the import business and decided to use my experience in retail to start a wholesale venture. I got some of our former suppliers on board, and the rest is history.”

Leonard took his reputation as a successful retailer on the road, selling his products across the country, which wasn’t too hard, considering the American dollar’s strong value against European currency at the time.

Today, Collezione Europa, an Italian phrase meaning “European collection,” maintains inventory of more than 250,000 items imported from the Philippines, China, Taiwan, and Mexico. Its customers consist mainly of inventory-carrying furniture dealers, including retail chains; small, independent stores; as well as a few non- furniture retailers. According to Leonard, unlike other furniture wholesalers, Collezione Europa ships products to customers in the same packaging in which it is received, “and customers with inventory are the vehicle for that.”

Leonard and Paul Frankel

A year later, the company opened a 34,000-square-foot showroom in High Point, NC, replacing an older company-owned facility. According to Leonard, High Point’s furniture market is declining, “which is why we moved to a leased space, to free ourselves of the real estate obligation.” To draw in customers, employees served a continental breakfast each morning, and happy hour started at 5:00.

New heights
In addition to its office in Englewood, NJ, which handles order processing, billing, and purchasing, the company has a 450,000-square-foot distribution center in Claremont, NC. Previously, explained Paul Frankel, Leonard’s brother and COO, Collezione Europa’s distribution center was former manufacturing space and did not have the capacity to support sustained growth. By 1997, the facility was busting at the seams, and the company decided to build a high-cube, state-of-the-art distribution center. “The facility without computerization to run it would be of little value, as would computerization without the facility, so we chose to do it all at once,” he explained.

With 40-foot-high ceilings (the previous facility had 12-foot ceilings) and an industrial racking system, Collezione Europa can now stack products 29 feet high. As a result of moving to the larger facility, the company doubled its warehouse shipments between October 2003 and October 2004. In addition, a sizeable investment in computer hardware, homegrown software, and wireless, handheld radio frequency terminals has enabled the company to rid itself of paper records and operate more efficiently.

Paul explained that Collezione Europa is leveraging serial number tracking to follow its inventory from the time it is received in the warehouse to when it arrives at customers’ doors. For instance, if the company received a shipment of, say, 500 coffee tables of the same style and color, each coffee table receives its own serial number. Doing so allows the software system to track each piece separately. “Our system knows on which purchase order each piece was received, which manufacturer it came from, and in what month it was produced,” said Paul.

“At the supermarket, when you pick up a box of Frosted Flakes, it has the same Kellogg’s UPC as the 50 other boxes sitting on that shelf. It’s a sufficient way to track certain kinds of inventory, but not furniture,” he said, adding that for starters, furniture manufacturers do not pre-label pieces with serial codes.

Serial number tracking also helps the company correct mistakes quickly. If, for instance, a carton was left on the loading dock, an employee could scan the code and learn that the piece was supposed to be on truck number seven but didn’t fit. “If a customer has a problem with that piece a year later, we can track which order it came from.”

Paul estimates few furniture wholesale companies have leveraged serial number tracking to the extent Collezione Europa has. “They might find a stray carton on the loading dock and try to retrace their steps, but if you are shipping out 20 of the same item every day, paper records aren’t going to be much help.”

IT improvements
To keep on top of its game, Collezione Europa has made several investments in IT since moving to its state-of-the-art facility. In 2004, the company installed IBM computer hardware in both locations while a Toshiba Phone system with automatic call distribution capabilities was installed at the New Jersey location. In January 2005, Collezione Europa modified its software package to track open work orders, automatically send service order notifications, and follow up on outstanding work orders.

More recently, the company has added a feature to its password-protected Web site that allows customers to print order reports as often as they wish. “They can track the status of every work order—shipped and unshipped items—in real time. They know when the containers from our suppliers reach the US, when they clear customs, when they reach our facility, and when they leave our facility,” said Paul.

The COO was eager to announce Collezione Europa’s latest online customer service feature, which allows customers to monitor vendor performance. “We find it helpful to know how many orders our suppliers are fulfilling and whether or not they are hitting their delivery targets. We provided similar information before, but we’ve further enhanced those capabilities.”