Kennedy Carpet Sales & Cleaners: Laying down a growth strategy
Carpet cleaner/retailer gambles on new showroom to help build brand - Friday Nov 21, 2008
Boston Business Journal - by Sean McFadden
Jay Kennedy readily admits that now is probably not the most ideal time to be rolling out an expansion of his carpet cleaning and sales business.
But by the time the founder and president of Kennedy Carpet Sales & Cleaners (incorporated as Kennedy Carpet Cleaning Inc.) had opened the doors to his new 4,500-square-foot showroom in Milton in late September, the plans had already been well under way — and there was no turning back.
Kennedy already owned a 22,000-square-foot combination office/warehouse/showroom location in Weymouth and leased a 1,500-square-foot retail space in Needham.
But, in the fall of 2006, he stumbled upon a 12,500-square-foot plot of land on which two rundown houses sat on Granite Avenue in Milton — an area that he said sees 200,000 cars drive by each day. Kennedy said he had the property under agreement that night; the purchase price was $750,000.
“I looked at this as a marketing and image opportunity — it’s all about the exposure; building top-of-mind awareness,” Kennedy, 54, said.
Funding the deal through the sale of some personal property in Florida, as well as a refinancing of the company’s Weymouth location, Kennedy forged ahead with his plans to turn the new Milton location into a venue that would represent “a totally different type of shopping experience,” he said.
The fruits of his labor are evidenced by the store’s elegant interiors — high ceilings, casual seating areas, a fireplace and ample displays of a wide variety of carpeting, including such brand names as Nourison, Couristan and Masland, along with tiles and hardwood flooring.
The process proved to be quite an undertaking: Obtaining the appropriate permitting for a full-color digital sign that adorns the storefront dragged on for months. And Kennedy said the company didn’t actually break ground on the project site until the fall of 2007.
Kennedy estimates the company invested $2 million in the project.
At the same time, Kennedy has been faced with the challenge of launching a new location in the midst of an economic downturn.
“It’s a little slower than I thought,” Kennedy admitted. “It just seems like people are adverse to spending any money right now.”
Because of the additional overhead he’s taken on with the new showroom, Kennedy expects revenue to remain flat at around $7 million this year.
He’s currently reviewing every aspect of his operations for possible belt-tightening; that includes advertising, for which the company currently spends about half a million dollars annually, primarily for spots on major-market TV and radio stations. And while he hasn’t had to do it yet, Kennedy said he’ll also consider a reduction in hours for his 75-person staff, if there’s not enough work to justify a 40-hour week.
A saving grace may be that the company has an established brand identity that sees about 75 percent repeat or referral business. At the same time, Kennedy’s been savvy about diversifying his business. And, he’s survived tough financial times before.
While it began solely as a carpet-cleaning business, Kennedy launched a separate carpet cleaning equipment and supplies division, Prochem of New England, in the early 1980s.
In 1993, he introduced Kennedy Restoration Services, which provides emergency service work in homes and offices in case of flood, fire or other disasters. That division helped Kennedy dramatically increase his revenue, but it also left him with virtually no cash flow. After meeting with resistance from several banks, he eventually found a community bank that loaned him $200,000 in 1994.
In 1997, the company established its most successful division, Kennedy Carpet Sales, which represented about $2.7 million of the company’s total revenue last year.
Joe Petrowski, CEO of Canton-based Cumberland Farms Inc. and Gulf Oil, who’s known Kennedy for almost 20 years, attributes Kennedy’s longevity to trust.
“It’s the essence of a good brand — you know what you’re going to get. And also (Jay’s ability) to keep it fresh,” Petrowski said.
A longtime proponent of reinvestment in his business, Kennedy is confident he can ultimately make the Milton showroom a success: “Of course, the timing’s not right … (but) you fight through it,” he said. “If I have to sit here seven days a week selling carpet (myself) to make this work, I’ll do it.”
Kenneth Kirkland, Kennedy’s accountant and a principal at KAF Financial Group in Braintree, said of Kennedy’s new showroom: “I think it’s a great location; it’s got the ability to work, but it will take patience.”