Furniture store embraces green and lean approach — with big results

City Furniture has come a long way since it was selling waterbeds. Part of that growth is attributed to a stay-lean business strategy.

By Amanda Postma
| 4:00 p.m. July 6, 2023
| 2 Free Articles Remaining!

Andrew Koenig, right, spoke about his company's decision to go 'lean' at an event hosted by Young Entrepreneurs of America and the Tampa Club's Young Executives. Also pictured is Brock Laramee of YEA.

Strategies

City Furniture is a lean, green, growing machine.

The Fort Lauderdale-based company, which just opened a new 1.3 million square foot warehouse in Plant City right off of Interstate 4, is on a mission to offset its carbon footprint with an ambitious goal of reaching carbon neutrality by 2040.

On the growing part, meanwhile, the company now has 23 stores across the state with five more planned.

And then there's the lean part. City Furniture went "lean" 16 years ago, CEO Andrew Koenig says, meaning it follows a system of minimizing waste while maximizing productivity.. Koenig talked about the company's lean and green journey at an event hosted by the Young Entrepreneurs of America and the Tampa Club's Young Executives June 27 at The Tampa Club in the Bank of America Plaza in downtown Tampa.

Around 2003, Koenig recalls reading a book called "The Machine that Changed the World" by James Womack, Daniel Jones and Daniel Roos, about the concept of lean production and how Toyota used it to conquer the automotive industry.

“I’ve been a lean thinker ever since,” he says. But getting everyone else at the company took some time getting onboard, especially for the CEO at the time: Koenig’s father Keith. “It took me about four or five years to convince my dad to go lean.”

In 2007, City Furniture’s business went lean through the Kaizen mentality, which means making continuous improvements through small, ongoing changes.

“Sometimes it’s uncomfortable to map a process on the wall in front of the team and highlight all of the problems, waste (and) safety issues going on,” Koenig says.

As support for this idea, City Furniture hosts Kaizen events where 10 people get together, are given a problem and have five days of ideation to come up with a solution. Recently, a five-day Kaizen event involving people from the sales team came up with an $8 million revenue improvement, the CEO says.

“It’s just absolutely powerful when you get the C-suite out of the processing situation and you put (in) the people that actually do the work,” he says. “They actually solve it.”

In the 16 years of doing this, Koenig claims he’s never had a Kaizen not be successful. “We’ve probably had hundreds,” he adds.

Part of the strategy requires the company to be organized, from standards to checklists, Koenig says. But just because the company has a certain way of being run, doesn’t mean innovation is out.

“We have standards, but we ask for ideas,” Koenig says. Last year, the company implemented 3,500 suggestions that were submitted. That was just in the operations, warehouse, delivery and customer care departments, which Koenig says employs around 1,200.

Keeping up with current trends and training is just as important, he adds. When ChatGPT was first introduced, the 150 technologists at City Furniture had access to four hours of training to learn about the new platform.

Mind the Gap

It took City Furniture CEO Andrew Koenig four to five years to change his father's mind, who was the co-founder and CEO at the time, about becoming a lean company. Two important factors played a role:

The younger Koenig presented several books, videos and examples regarding the practice.
The company lost about seven vice presidents in the span of 10 years.

It didn't help that the first Kaizen event, to find continuous improvements through small, ongoing changes, cost $1 million. The second costing $2 million furthered that uneasiness. But then it started to click.

“The key was him being humble," Koenig says. "Imagine doing something for 45 years and your punk kid tells you, ‘we’re running this the wrong way.'”

Once the practice was accepted, workers' compensation claims and turnover both dropped 75%. Quality issues went down 50-60%, Koenig adds. "It was hard to not see the results," he says.

The now 23-store wide company wasn’t always this methodical.

When Keith Koenig founded the company in 1970, with his brother Kevin Koenig joining a few years later, the business had a bit more splash to it.

The waterbed industry was a hot start for the family business, which launched as Waterbed City until 1994, when the name changed to City Furniture.

“1994, what do you know? Waterbeds weren’t cool anymore,” Koenig says. “Remember when the condo buildings started to outlaw them? They started leaking and taking down condos left and right.

“Eventually there were laws against them so we had to pivot pretty quickly.”

City Furniture has expanded quite a bit since the waterbed days. Aside from its 23 stores, which include locations in Naples, Fort Myers and Plant City, the company also has expanded into Mississippi, with a factory that employs a team of 120.

The company is now building prototype stores that range from 160,000 to 200,000 square feet. In addition to warehouse space, the Plant City location also includes a nearly 190,000 square foot showroom.

Koenig’s future goals include five more stores extending from Largo and Clearwater to Wesley Chapel and Sarasota. He also hopes to expand product depth to rooms that aren’t thought of as often — like closets and vanity spaces.