Perfect Closet & Cabinets offers a diverse product line from kitchen cabinets to closet systems.

As most closet companies know and as research has shown, home organization opportunities include more than designing and installing bedroom closets. There are many other areas in the home and beyond that impact organization and those areas are providing companies with avenues to diversify product lines, as well as increase revenue.

That is especially important now considering that the recession is ending and positioning for future growth is critical.

As indicated in the 2010 Closet and Home Organization consumer research study featured in the May/June issue, things are looking up and consumers are planning purchases over the next two years not only of bedroom closets but in those other areas of the home as well.

Although the percentage of people planning laundry room projects dropped from 13% to 11% from the previous year, planned home office projects saw an increase of almost 25% and planned pantry projects increased over 20%. The number of consumers planning to add Murphy Beds also jumped 40%. This seems to be a continuation of consumer purchasing patterns over the last few years.

The 2010 consumer study also indicated that completed pantry projects increased from 14% to 15% over the previous year and the percentage of completed laundry room projects increased from 18% to 20%. Completed home office projects dropped from 22% to 20% — a possible reflection of an increase of the unemployment rate.

All of which suggests that companies positioning themselves for growth beyond the bedroom closet will find consumers ready with specific projects in mind.

Ed Rueben of Closets and More, Cincinnati, OH, agrees that there are growth areas beyond the bedroom closet. For instance, he notes that his company works with many kitchen and bath designers in the area to build kitchen pantries. They seek out his more than 25 years of experience, he says. Rueben also designs and manufactures craft rooms, sewing
rooms, pool houses and stables. Another unique product that he produces is a storage unit for bank vaults.

Rueben says being flexible with the consumer is key and that developing a specialty is important. “Today you have to have a niche,” he adds.

In the office
Home offices continue to be a highly requested item from consumers. Oscar Ruiz, president, The Closets Co., Pompano, FL, says that in February and March of this year he received many orders for home offices.

“Offices have been the latest biggest project we’re selling,” he says. “Maybe because some people were changing jobs and working from home, so they set up new work spaces.”

Rueben agrees that home offices are still big sellers, but he also is seeing an increase in demand for commercial offices.

“We do a lot of doctor’s offices, ER rooms and orthodontic ER labs,” Rueben says. “We also have a repair service in our company and we will repair dental offices, doctor’s offices and ERs because they would rather fix than buy new.”

Closets and More was able to move into the commercial end of designing offices mainly because of its residential client base, which consists of physicians and hospital administrators. Currently, commercial offices are only 6% to 8% of the business, but Rueben says he hopes that it will continue to grow.

Gary Pavitt, CFO, Classy Closets, Escondido, CA, also sees opportunities in commercial, having worked with small dental offices on occasion. “Commercial is not a big part of what we do but we are looking at ways we can win more business,” he says.

Overall, Pavitt says consumers has become more savvy and their expectations for home organization projects are higher. Also, the economy has changed what type of projects consumers need. Take, for example, the wall bed. Pavitt says that market has been a good one for them over the years and they sell on average 30 to 40 beds a year. With more and
more people working from home, spare bedrooms are being turned into office spaces with wall bed units, he notes.

Even in the face of a teetering economy, wall beds have been a consistent seller for Classy Closets, proportionately speaking, because all areas have experienced a decline, Pavitt says.

Despite the popularity of wall beds, Pavitt says that the real growth area for his company is selling up-market media centers. “We are constantly trying to introduce construction methods to our entertainment centers that make them a little more high end.”

But not only are media and entertainment centers becoming a more prevalent part of a closet company’s offerings, designs are now including European-style wardrobes.

“We are selling a lot of wall units/entertainment units with combined space where they can put clothes or some hanging and have a T.V. there,” notes Ruiz.

Len Morreale of Perfect Closet & Cabinets, Winter Park, FL, also has built entertainment centers for customers that include wardrobe space. His company has a diverse product line, which includes everything from custom closets, entertainment centers, kitchen cabinets, home offices, Murphy Beds and more. Morreale credits that diverse product line with allowing him to expand into a larger building and to reinvest in the company with new equipment even in tough times.

“We set goals for what we wanted to do this year financially and we did it in the first quarter of the year,” he says. “I attribute
a lot of that to the fact that we acted and reacted when we needed. Instead of downsizing we upsized, reinvested and geared up for what will come.”

When the market initially began to soften a couple of years ago, Morreale recognized that his capacity to build cabinets
would allow him to add more product lines and sell directly to the customer instead of through distribution. Perfect Closet & Cabinets manufactures everything onsite including doors, drawers, base and crown moulding.

Setting priorities
Pavitt says that the economy has forced some homeowners to prioritize what rooms of the house they want to remodel. For instance, Pavitt says that when a customer walks into her closet and sees a mess, she says to herself ‘I’ve got to get this done.’ Yet, when it comes to something like walking into a potential craft room, the homeowner might already be making due with what she has, so its not necessarily as important as getting the closet organized.

“What they seem to be doing is taking it in a pecking order,” he adds. “We try to encourage people with discounts to bundle it but unfortunately it’s not as easy as it was to do that. The craft room is not quite important as the feeling they get when they walk into the closet and their clothes are all over the place.”

Although Classy Closets San Diego is part of a franchise, Pavitt says that they are also able to do some custom work. It has given them the flexibility to work with more than fixed sizes. The ability to manufacture in two-inch increments has been a benefit to the company because it gives them an edge when meeting with a potential client.

“When we go into these houses with four or five areas there might be an area where they want something a little more custom and we’re able to provide that area for them and it will win us the rest of the house,” Pavitt explains.

Evaluating and designing for the entire home at one time is an approach preferred by Janet Valenza, president and design director, Closet Revolution, New York, NY. Rather than looking at specific areas to develop growth and niches, she believes that a holistic approach to the entire process allows the client to really think about what their daily activities are. “There is so much of a focus on…‘Let me do my garage, let me do my closets’ and not, ‘What is the stuff I have and what is the best way to organize it’ in the home.

“Until you plan for all activities you can’t make an effective design,” she says. “Yes, you can fill a job and keep your factory busy and make a profit, but you can’t really make a design that suits her needs without those preliminary steps.”