By the rules of modern-day retail, in which big-box chains run rampant over independent specialty stores, Warners' Stellian is not supposed to exist.
But thanks to its "conservative aggressive" business model, the St. Paul-based family-owned appliance chain has enjoyed steady if not spectacular profits and growth even as it faces down mega-retailers like Best Buy, Target and Sears literally around the corner.
If success is defined as survival, the second-generation Warner family will gladly take it.
"I'm glad we're still around, let's just say that," said president and marketing director Jeff Warner. "We're still the choice of enough Twin Cities homeowners to be viable and grow."
From a single store on Snelling Avenue in Falcon Heights, Warners' Stellian now operates eight stores throughout the region, including a location as far south as Rochester. The company would not disclose financial data. But Jeff Warner and sister Carla, the sales director, say they strenuously preserve as much cash as they can to open a new store once every two or three years and maintain a well-trained sales and delivery force that can win repeat business.
"Our customer service and delivery, they are all in-house," Carla Warner said. "We don't farm it out. That's a big advantage for us as well."
Said Jeff Warner: "The strongest marketing any business can get is referral. I always say retention also refers. Make a customer, keep a customer, and that customer becomes a seller. A trusted referral is what many of us really want when we have to make a decision on a big purchase."
In other words, Retail 101.
"Yeah, but Retail 101 is tough," he said.
Carla Warner said the company is still looking to expand its market share throughout the Twin Cities. Since Warners' Stellian revamped its website earlier this year, traffic has significantly increased. While online sales have grown, the website for now primarily exists to support sales at the company's physical locations, she said.
Warners' Stellian has proved resilient in the face of economic hardship and intense competition. With the housing market in full-scale recovery, Richfield-based Best Buy has made big investments in appliances, which have paid off nicely for the world's largest consumer electronics chain. Sales in appliances at stores open for at least a year have grown in the double digits for several consecutive quarters.
Despite big-box dominance, small independent appliance and electronics chains throughout the Midwest, like H.H. Gregg in Indianapolis and Abt Electronics in Chicago, have managed to stick around, said retail consultant Brian Kelly, a former top executive at Sears. With just a single store, Abt owns the top market share for appliances in Chicago, he noted.
Like Warners' Stellian, those retailers boast deep product assortments, quick delivery and quality in-house customer service. Consumers don't buy big items like refrigerators and washing machines often, so when they do, they want to get it right the first time, Kelly said.
"All retail is local," Kelly said. "Small local competitors can hold the big boxes off."
Warners' Stellian traces its roots back to 1954, when Jim Warner started as a salesman at the Snelling Avenue store, then owned by Steve and Lillian Farkas. Ironically, the store is very close to the original Sound of Music store founded by Richard Schulze, who grew it into Best Buy.
Eventually, Jim Warner bought the Snelling Avenue store and handed off the thriving business to children Jeff, Carla, Bill and Bob.
"I wanted to work with my dad," Jeff Warner said. "I didn't know that I was going to do anything more but sell appliances from this store. He was winning. It was exciting and I just wanted to be a part of that. We were building something special."
Jim Warner still serves on the board but does not meddle.
"If he's disappointed, he would tell us," Jeff Warner said. "He's a quiet man."
The company is currently grooming a third generation of Warners dubbed "3G" to take over the chain. But beyond that, no one knows how long the family will continue to own and operate the company.
"3G is going to have to worry about that," Jeff Warner said with a laugh.
Thomas Lee • 612-673-4113
