Vince Lopez just knew that his old furniture wouldn’t fit the d & #233;cor of the Thousand Oaks home he had recently bought.
What’s more, the Calabasas insurance agent couldn’t find a store that wanted to buy it and he certainly didn’t want to hold a garage sale that would force him to practically give it away.
Eventually he ran across an ad in the local paper for Home Furnishings on Consignment, which takes furniture and sells it to people looking for quality items at bargain prices. The proceeds are then split with the consigners.
Mike Pegler, owner of the Westlake Village consignment business, came to Lopez’s home and gave him an appraisal. “It was considerably more than I ever could get from trying to sell it myself,” Lopez said. “He took the furniture to the showroom, and it all sold at the price he set for it.”
For more than a year, Pegler has been selling high-quality furniture in suburbia and in the process, tapping into the growing consignment trend.
“Usually, I can tell right away if it’s a piece that I think I can move quickly at the right price,” said Pegler. “This was the missing link that I had been looking for. It was a way to get the furniture sold at an acceptable price.”
Consignment stores have been around for decades, mostly in the clothing industry. Only recently has the strategy spread to furniture.
“People can see the furniture in a nice atmosphere and buy it for one-third to one-half of the new price,” said Adele Meyer, manager of the National Association of Resale and Thrift Shops. “It also gives people a place to have their furniture sold without going through the hassle of a garage sale.”
Furniture consignment stores remain a rarity in Los Angeles, in part because of the area’s large number of used furniture shops. (Consignment stores are popping up in Palm Springs, Phoenix, Seattle and Florida, among other places.)
“This business thrives on upscale clientele in upscale neighborhoods who understand the value of quality furniture,” Pegler said.
He has been around furniture much of his life. His father has been a distributor for more than 40 years as was the 37-year-old Pegler before he stumbled into the consignment business.
As a manufacturer’s representative in Northern California, he often got stuck with furniture that was damaged in shipping or that customers didn’t want to buy. It was too expensive to send the pieces back to manufacturers on the East Coast, and it also proved difficult to sell damaged or pricey pieces to used furniture outlets.
As a result, he frequently had to accept fire-sale prices to get rid of the furniture, which of course meant steep drops in his commissions.
Then, in the early 1990s, Pegler started doing business with a furniture consignment store in Northern California that picked up his unsold pieces, displayed them in a showroom, and gave him a cut of the sale.
Pegler didn’t start his own business right away because he didn’t have the inventory and start-up capital. Then in late 1997, after a banner year in sales, he saw his commission cut. “That was the last straw. I decided then and there to start up my own business,” he said.
Pegler moved to Southern California and opened his store in Westlake Village, in part because his wife then pregnant with twins wanted to be close to her family in Camarillo. Also, Westlake Village was the kind of suburban market that he thought would work best for consignment sales.
It took about six months to find space for a showroom, accumulate inventory, and secure a U.S. Small Business Administration loan. In June 1998, he opened the doors of the 10,000-square-foot showroom in a strip mall.
During its first year, Home Furnishings on Consignment posted $1.2 million in revenues, and Pegler said sales for the first two months of his second year are running about 50 percent over the like period last year.
(Initially, Pegler and his wife had formed a partnership with another married couple to own and operate the store. But the partnership dissolved within nine months, leaving Pegler and his wife to run the store on their own.)
Customers vary. Some are recently divorced or widowed; others are empty-nesters moving to smaller living quarters. Then there are those who simply want to switch d & #233;cor as part of a remodeling.
“I had one gentleman come in who got divorced two years ago and had been storing the furniture from his old home,” Pegler said. “He didn’t want to put an ad in the paper or sell it for less than it was worth to a used furniture store. He was just waiting for the right circumstance to part with it.”
For each piece of furniture, Pegler typically offers one-third to one-half the original purchase price. If the owner agrees, a contract is signed specifying the price range, with a 20 percent “leeway” in case the piece doesn’t sell after 45 days. The owner is guaranteed 60 percent of the final sales price before the pieces are trucked to the showroom.
Pegler said about 80 percent of the furniture sells within two months. He marks down the pieces that don’t sell as quickly and tries again. If they still don’t move, they are returned to the consigner.
He ultimately wants to open a chain of consignment stores, similar to the ones in Northern California that inspired him. The most likely site for the next store is West L.A. because of its upscale demographics.
Meanwhile, he plans to branch into jewelry consignment next month.
“So many of the people who consign their furniture to me also have jewelry they want to sell at a good price, so it seems to be a natural follow,” he said.
Home Furnishings on Consignment
Year Founded: 1998
Core Business: Selling furniture on consignment and splitting the proceeds with the owner
Employees in 1998: 4
Employees in 1999: 8
Revenues for Year Ended June 1999: $1.2 million
Goal: Become the first furniture consignment chain in the Los Angeles area
Driving Force: Lack of outlets for people to sell used quality furniture at acceptable prices
