Big Couch Media Group Client - Capitol Lighting Featured in South Florida Business Journal - Including Company Mention
South Florida Business Journal
April 22, 2011
At its peak, Capitol Lighting had 11 stores in Florida and New Jersey. Then, the recession hit, and the 87-year-old, family-owned company was forced to retrench and rethink its business model.
Like most in the home furnishing and décor industry, the company was not immune to the effects of the meltdown. South Florida was hit particularly hard by the housing downturn, and consumers tightened their belts.
“We saw what was coming and we reacted appropriately. It wasn’t a fun time,” CEO Ken Lebersfeld said of the company’s decision to close three unprofitable stores and cut its workforce to 153 from 225.
“We needed to do what we could to save the 153, rather than try to save the 225 and sink the ship,” said Eric Lebersfeld, his brother.
The company also consolidated its back-office functions under one roof, and continues to keep a tight rein on cash flow.
Today, instead of shrinkage, there’s talk of growth as Capitol Lighting’s executives create plans to expand its “bricks and clicks” model, which integrates in-store and online sales.
The plan’s genesis came in September 2009, when Capitol Lighting opened a 4,000-square-foot showroom in Stuart that has a staff of six. By comparison, its Boca Raton location, which also serves as its headquarters, is 30,000 square feet and has a staff of 28.
“With our new model we can open smaller, less-expensive stores,” Ken Lebersfeld said.
The showroom allows customers to see the lighting fixtures they viewed online. With a warehouse within a 30-minute drive, the company can still offer same-day or next-day delivery, “and that satisfies 98 percent of our customers,” Eric Lebersfeld said.
“Research shows that only 10 percent of people who look at lighting online actually buy it online,” he said. “They want to see it, feel it, to see how sunlight hits it. It’s difficult to get a good perspective of an item, even from a high-resolution photo online.”
Initially, salespeople saw online sales as a threat, fearing customers would not buy from them.
“Now, they realize how important that portal is to the survival of the company and to help them sell,” he said.
Sales up 31% in 2010
The plan appears to be paying off. Last year, the company had sales of about $30 million, up about 4 percent over 2009. Internet sales made up about 20 percent of that revenue.
Nationwide, overall online retail sales increased 11 percent, year-over-year, in the fourth quarter, and full-year 2010 sales were up 9.8 percent over 2009, according to Web analytics company ComScore.
In addition to its locations in Stuart and Boca Raton, which opened in 1985, Capitol Lighting has stores in Royal Palm Beach and Palm Beach Gardens, plus four in New Jersey.
With the “bricks and clicks” model deemed a success, the Lebersfelds are looking to add locations: Fort Lauderdale this year, and possibly Aventura and Naples.
“We have pretty ambitious growth plans,” Ken Lebersfeld said. “We see a huge opportunity as the economy and construction starts to improve.”
Online sales are not new for Capitol Lighting.
The company launched www.1-800lighting.com in 1994, but at that time, most people were on dial-up modems and “you couldn’t do business in a significant way,” Ken Lebersfeld said. “You could drive back and forth to the store before a page loaded.”
Besides, “we were busy,” his brother chimed in. “We saw it as the future, but didn’t devote the time and energy into making it a substantial business venture.”
Over the years, however, they have continued to refine the website.
“Last year, we really put the pedal to the medal as far as integrating a number of new initiatives for 1-800lighting.com,” Eric Lebersfeld said.
Georgianne Brown, co-founder of Plantation-based Big Couch Media Group, has worked with the company to increase its Internet traffic, including a redesign of the website to give it “an updated look and feel,” she said.
This year, she is focusing on improving the online search to bring users to “a more relevant page, rather than just the home page,” Brown said.
Considering that Capitol Lighting was started in the Lebersfelds’ grandfather’s childhood bedroom by their great-grandparents, who emigrated from Hungary, the company has come a long way.
“We have made more changes to our business in the last two years than in the last two decades,” Ken Lebersfeld said.
His brother added: “We are trying to ride the wave and not get crushed by it.”