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Friday, Sep 22, 2023

Pirch Puts Efforts in Its Comfort Zone

An overly ambitious rush to expand, confusion over its brand, and costly real estate deals were what caused Pirch — the high-end household furnishings and fixtures company — to close all but its four California showrooms.

“I think we just got a little bit ahead of ourselves,” said Clint Fenn, Pirch vice president of sales.

Once hailed a standout success in a retail world where many companies that had been household names for decades were foundering, Pirch was forced to retrench in late 2017 and is in the process of reshaping itself.

The company was founded in 2009, with its flagship showroom in San Diego’s UTC Westfield mall — growing to 10 stores by 2017.

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Within months of opening a showroom in Austin, Texas, the company shut it down, along with showrooms in New York City, Atlanta, Chicago, Dallas and Paramus, New Jersey.

About 200 people were laid off and the company’s leadership was changed, Fenn said.

That left Pirch with showrooms in Costa Mesa, Glendale, Rancho Mirage and San Diego.

“The decision was made in November to go back to our profitable stores in California,” Fenn said.

Misread the Market

Part of the problem was that Pirch misread the markets outside of California, thinking it could duplicate its success in California by simply opening copycat stores elsewhere.

“We just thought that all markets were the same,” Fenn said. “We just put a Pirch up without any differentiation.”

The result — its marketing fell flat in places such as New York City.

The products that sold well in California, where high-end homes tend to be sprawling with an emphasis on outdoor living, bombed in New York, where space is at more of a premium.

For instance, Fenn said decorative vessel sinks, which look like a bowl on top of a counter, were big sellers in California but few wanted them in New York, where customers didn’t have room for them.

“Out here, they’re great,” Fenn said. “In New York, it’s more functionality than it is appearance.”

Then there was the problem of people not knowing what Pirch was.

“As far as a strategy previously, the brand was Pirch, and we were singing to the mountaintops, Pirch, Pirch, Pirch,” Fenn said.

That got the company name out there, but it didn’t tell people what they could buy at Pirch.

“We need to view ourselves as a house of brands,” Fenn said.

With kitchen ranges that go for up to $80,000 and imported French bathroom fixtures that have crystal handles, the company’s customer base is in the upper income echelon.

“We cater to the top 5 percent of people,” Fenn said. “They’re building homes, they’re remodeling homes.”

Spotlight on Brands

Rather than promote its own name, the new strategy is to promote the brands Pirch sells.

“The marketing in the store is now brand-centric,” Fenn said. “Let’s tell the story of the brands. That’s what customers want. The customers want to come in and say, ‘what an amazing showroom,’ and ‘what is it that you sell.’”

Pirch also will have a different product mix from store to store, he said, depending on what’s selling well in each market.

“We ask our sales people what customers are asking for,” Fenn said. “Listening to our customers is extremely important.”

Adding to the company’s troubles as it expanded beyond California were real estate costs that proved to be higher than the company anticipated, he said.

Without elaborating, Fenn said, “We made some bad real estate deals.”

For now, there are no plans to expand again beyond California.

Making Wise Moves

The company will focus on “bounding back with a vengeance.” “The tales of our demise are over exaggerated, to say the least,” Fenn said.

As part of that rebound, Pirch has moved its headquarters from University City to less expensive space in Oceanside, where it already has offices and a distribution center.

“It didn’t make sense to have this huge distribution center with all these offices and have another off-site location,” Fenn said.

The company also is redesigning showroom interiors, adding what he called pop-up boutiques, or shops-within-a shop, highlighting particular brands and products in its three largest showrooms.

They are in UTC Westfield, which is about 28,000 square feet; Costa Mesa, which is about 18,500 square feet and Glendale, which is about 25,000 square feet.

The Rancho Mirage showroom is about 10,000 square feet.

Miro Copic, a marketing lecturer at San Diego State University and co-founder and principal partner at Bottomline Marketing, said Pirch’s chances of pulling off a rebound are about 50-50.

An issue for stores like Pirch is that people only buy some of the products Pirch sells, like pricey kitchen appliances, bathroom fixtures and furniture — when they’re remodeling or building a home.

“After I make that purchase, I’m done for a decade,” Copic said.

Rangapriya “Priya” Kannan-Narasimhan, an associate professor at the University of San Diego School of Business, is optimistic about Pirch’s future.

“I’m confident they’ll do a good job because they are doing the right thing,” said Kannan-Narasimhan, who teaches strategic management and new product development.

“I like the fact that they are pausing to step back and see what is working and what is not working,” Kannan-Narasimhan said. “They have to figure out their business model.”

Pirch does a good job of giving customers an experience when they walk into a showroom, Kannan-Narasimhan said, but “the customer experience has to lead to sales.”

She said the company should focus more on appealing to architects and designers.


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