Author: PCRestate

Fast on the heels of building its first full-sized dairy/grocery store on Long Island in East Farmingdale, Stew Leonard’s is planning another superstore in East Meadow.

The Norwalk, Conn.-based chain has plans to build its second full-sized Long Island location at the East Meadow Mall on Front Street, in the 70,000-square-foot space last occupied by a Pathmark supermarket that closed in May 2013, according to industry sources. Stew Leonard’s already had two of its wine stores here, in Carle Place and Airport Plaza in East Farmingdale, where it began construction of its 60,000-square-foot dairy store this spring. The newest Stew Leonard’s would join co-anchor Marshalls at the East Meadow center.

The family-owned regional chain – once called “the Disneyland of dairy stores” by The New York Times – currently operates four dairy stores. It has three in Connecticut – Norwalk, Danbury and Newington – and one in Yonkers. Stew Leonard’s began with a 17,000-square-foot Norwalk store in 1969, soon after patriarch Charles Leonard’s nearby Clover Farms Dairy was paved over by a highway project. The original store was expanded several times before a second store, 130,000 square feet in Danbury, opened in 1991. A year later, the company earned recognition from the Guinness Book of World Records for having “the greatest sales per unit area of any single food store in the United States.”

Today, the Stew Leonard’s chain, now headed by Charles Leonard’s grandson, Stew Leonard Jr., boasts annual revenues that eclipse $300 million. The East Meadow lease is being negotiated by Jeff Nable of Jericho-based Ripco Real Estate and the shopping center’s Valley Stream-based landlord Serota Properties. Neither would confirm nor comment on the Stew Leonard’s deal.

At Airport Plaza, the Stew Leonard’s is replacing Dave & Buster’s which vacated the space—the East Farmingdale center’s second largest next to Home Depot—after its lease expired with landlord Kimco Realty in February. The Stew Leonard’s at Airport Plaza is slated to open early in 2016. Stew Leonard’s previous attempt to build one of its full-sized stores in East Farmingdale in 2003 was unsuccessful. The chain wanted to build a 150,000-square-foot store at the intersection of Route 110 and Conklin Street, next to Airport Plaza. But the management of adjacent Republic Airport and some aviation groups complained that the store would lie in the flight path of Republic’s runway.

A proposal to move the store to a site 1,000 feet to the south didn’t fly with Stew Leonard’s or the Town of Babylon, and the project fizzled.

When you have a good idea, it’s generally good advice to sleep on it. But Gregg Richard, CEO of P.C. Richard & Son, slept on one big idea for three years before rolling it out. Now other people are sleeping on it.

While the more-than-a-century-old independent chain based in Farmingdale routinely adds products, it a year ago almost to the day began selling mattresses at a few stores.

The firm will have mattresses in 56 of its 66 stores (including a dozen of 19 Long Island locations) within a week and anticipates mattress “galleries” in all its stores within two months.

“We felt we were sending our customers to our competitors, because we weren’t giving them the choice,” Gregg Richard said. “Now that they have a choice, they’ve proven to us that we were right. They’d rather buy from us.”

The firm is rolling out the mattresses more rapidly than planned, because Richard said the category has been “successful beyond my wildest dreams.”

“Because of the success last year, it was an all-out team effort to get these open as quick as humanly possible,” he said.

It might be an irony that mattresses are proving a way to wake up sales, which weakened in some categories. Customers still flock to P.C. Richard & Son for refrigerators, stoves, ovens and appliances, but some buy electronics, well, electronically.

“The electronics business isn’t what it used to be,” Richard said. “The computer, home-office category hasn’t been terrific, but we’re still doing fairly well. If our customers want something, we’ll be there to sell it to them.”

While to an outsider, selling mattresses may seem a departure, some bed frames and mattresses involve technology. And when people buy houses, they often need refrigerators, TVs and a place to sleep.

The firm, which says it’s “changing the way you buy a mattress,” sells Sealy Posturepedic, Stearns & Foster, Optimum and Tempur-Pedic as well as other brands.

“The most difficult part of the mattress business is operational,” Richard continued. “You need showrooms. We have them. You need great salespeople. We have them. You need advertising. We have it. You need a warehouse. You need trucking, home delivery, drivers and helpers. We have it. And we have the loyal customers.”

Other appliance and electronics retailers already went into the bedding business, such as Conn’s HomePlus, RC Willey, ABT, ABC Warehouse and BrandsMart USA.

“I talked to these guys. They said it’s a good business,” Richard continued. “I’m friendly with most of them. I kept pushing it off.”

The firm got requests for mattresses on customer cards filled out in stores. Then it tested the concept, tucking mattress “galleries” in the back of seven Connecticut stores a year ago. Mattress galleries sprouted in spaces used for stockrooms, rather than displacing items.

“We were able to break through the walls and make the stores a little bigger,” he said. “It required a lot of capital to get in the business. It forced us to look at every store. And when we went in to do the mattress galleries, we gave many stores a facelift.”

The company, which paid for renovations out of funds from operations, sells 20 different mattresses in its 10,000-square-foot Rego Park, Queens store and 35 in the 50,000-square-foot Riverhead store.

“Each store is different,” he said. “We have enough of a section, so our customers can make an educated decision.”

The retailer offers mattresses and bedframes ranging from under $200 to $10,000. Some frames offer massages, go up and down and include USB ports, phone plugs and chargers.

Although the firm says it will match others’ prices, it provides information about the product, including how it’s built, hand stitching, foam and oils. But comfort is king.

“It’s what you’re comfortable on, what you’re used to sleeping on,” Richard said.

He assumed customers would want to test mattresses, but he’s finding many choose convenience, buying online.

“I thought people would educate themselves, come into the store,” he said. “The business we do online without people ever lying on a mattress is amazing.”

Although some customers are surprised to see P.C. Richard’s softer side, Richard says his firm evolved, initially selling hardware, adding appliances in 1909 and by the 1930s and 1940s selling TVs.

“We started as a hardware store. We don’t sell hardware anymore,” Richard said. “We’ve changed our business model many times. Microwaves used to be a gigantic part of our business. VCRs. That turned into DVD players. CD players were big. It changed to the iPod and Wi-Fi.”

Executives have moved back and forth between appliance and electronics and mattress retail, bridging the two businesses. The former CEO of Bosch Appliances is president of Serta and a former Whirlpool executive is a top executive at Sealy Posturepedic.

“Lots of customers come in to buy a mattress and wind up buying something else too,” he said. “Maybe they buy a TV. It’s the advantage we have. We have lots of categories.”

P.C. Richard delivers on its promises, charging $49 for delivery, set-up and disposal of old mattresses, although it periodically offers free delivery.

And it’s expanding into the fitness business, selling Fitbits and trackers that measure steps, heart rate and calories, as well as home security and automation equipment, including smart thermostats and devices that use phones to unlock doors.

It sells home-office desks and some furniture used with TVs, but don’t expect the chain to turn into a furniture store.

“We’re not at this point selling dining room sets or couches,” Richard said. “We’re not looking to expand deep into home furnishings.”

The store expanded its slogan from the “appliance, TV, electronics giant” to “the appliance, TV, electronics, mattress giant.”

“The mattress business is very similar to our business,” Richard said. “The peak times are really the same holidays.”

The store competes with specialty retailers such as Bethpage-based Sleepy’s and department stores, but Richard believes his firm is simply expanding its niche.

“I’ve been competing with people for 105 years,” Richard said. “Most of them aren’t here. Competition isn’t new to us.”

There is a risk that a customer unhappy with a mattress could be turned off to the store and that online orders could be cancelled. But Richard isn’t losing sleep over possible problems, as the firm finds money hidden under mattresses.

“We’re in business to make customers,” Richard said. “We’re not in business to try to make an extra-quick buck for the short term.”

U.S. companies stepped up hiring in May, a private survey found, evidence that employers remain confident in the economy even after it contracted at the start of the year.

Payroll processor ADP said Wednesday businesses added 201,000 jobs last month, up from just 165,000 in the previous month. April’s increase was the smallest in a year and a half.

The figures suggest that the economy is recovering after it shrank at a 0.7 percent annual rate in the first quarter. On Friday, the government will issue its official jobs report for May. Economists forecast it will show that employers added 227,000 jobs, and the unemployment rate remained 5.4 percent.

The ADP survey covers only private businesses, however, and frequently diverges from the official figures.

Construction companies added 27,000 jobs, ADP said, while manufacturers cut 5,000 jobs. The drop in factory jobs likely reflects the impact of the stronger dollar, which makes U.S. goods more expensive overseas and cuts into export sales.

Other recent reports have painted a mixed picture of the economy. Consumers remain cautious and are reluctant to spend their savings from lower gas prices, which are about $1 a gallon cheaper than a year ago. On Monday, the government said consumer spending was unchanged in April. Instead, the savings rate rose to 5.6 percent from 5.2 percent.

Yet Americans were willing to spend more on cars last month. Auto sales rose 2 percent in May to 1.64 million cars and trucks, according to Autodata Corp. That was the fastest sales pace since July 2005.

And a survey of manufacturing firms showed that factory activity grew at a faster pace in May than the previous month, driven higher by more new orders and greater hiring.

Overall, analysts expect the economy will expand at about a 2 percent annual pace in the second quarter. That would leave growth in the first half of the year barely above 0.5 percent, down from a 3.6 percent in the second half of last year.