Michael J. Knell — Furniture Today,
Plans network of independently owned franchise stores

WINNIPEG, Manitoba — The Dufresne Group, one of Canada’s fastest-growing chains of full-line and specialty furniture stores, has launched a buying group as a precursor to establishing a network of independently owned franchise stores.

The group is called the Dufresne Retail Solutions Group. Mark Dufresne, CEO of family-owned TDG, believes its disciplined business model will meet the needs of non-competing independents.

Buying groups long have played a key role in Canada, with a strong following among family-owned, single-unit operations in secondary and tertiary markets. Cantrex Group, once the leader, has been on the wane in recent years, and is working to regain momentum after its acquisition last year by Sears Canada.

Meanwhile, Mega Group has been growing significantly, and its Countrywide and Multi-Meubles chains are seen as two of this country’s fastest-growing.

Neither Cantrex nor Mega has emphasized recruiting in recent years, but that is expected to change, particularly with Dufresne in the picture. The latter once was a member of VIP Stores, later Mega, before moving to Cantrex in the mid-1990s, becoming Cantrex’s biggest single customer and part of its Furniture Plus banner before leaving to launch DRSG.

Now, DRSG will rely on a newly created Mega unit to provide central billing, volume rebates, inventory financing and other services, but not marketing and merchandising. “We’re co-operating at the big-picture level, not at the medium and micro levels,” Dufresne said of the DRSG/Mega business relationship.

Since the beginning of the year, DRSG has signed 10 members with 22 outlets and will run its first promotion in March. The combined volume of TDG and DRSG is currently around C$200 million at retail, Dufresne said. He wouldn’t divulge other volume figures or say how many members he expects ultimately will join the group or the franchise network.

“TDG’s volume combined with DRSG members’ volume will create a substantial force in the home furnishings industry in Canada for years to come,” the company said in promotional literature sent to select retailers.

TDG operates 15 stores in western Canada, including 11 Dufresne Furniture & Appliances stores in Manitoba, Ontario and Alberta; two Ashley stores, in Winnipeg and Calgary, Alberta; a La-Z-Boy store here; and one Sleep Source bedding store. TDG also supplies furniture and bedding to The North West Company’s customers across the Arctic.

Dufresne said the furniture and appliance stores are the largest retailer in Manitoba and northwestern Ontario for Palliser, La-Z-Boy, Maytag, Serta and Sealy, with a 25% share in those markets.

Buying group veteran Steve Braniff has been named DRSG general manager. He is responsible for all operations and reports to Mark Dufresne. Braniff was national furniture merchandising manager at Cantrex, and before that worked for what’s now Mega. “We believe we can leverage his skill set and relationships,” Dufresne said.

TDG is known for operational excellence, with all aspects documented, defined and measured. It’s a model the company believes can be successful for others. “We have a formula, a disciplined approach,” Dufresne said.

The long-term goal is to create a network of franchises, with dealers who join DRSG converting once they’re convinced the model works. Dufresne stressed that becoming a franchisee is not a requirement of membership. “What we’re looking for are good-fit candidates,” he said.

The franchise program is expected to roll out in 2014.

DRSG has two levels of membership. Associate members get a core bedding program supported by a 12-flyer advertising program, and a six-issue furniture flyer program driven by “power buys” from suppliers.

Echelon membership is similar to the banner programs of Cantrex and Mega but without the common name. The core assortment is based on offerings in  Dufresne Furniture & Appliances stores, with advertising support.

Buying group services include store design, training, extended warranty programs, group health and business insurance, consumer credit and central billing.

DRSG already has signed supplier agreements with Sealy Canada, Serta, Simmons Canada, Palliser, Ashley, South Shore, Reflections, Hamilton & Spill, Therapedic Toronto/Crown Design Upholstery, Trendline and appliance producers Whirlpool and Electrolux.

Dufresne said he doesn’t  know how big DRSG can become. “Our business plan will become more and more articulated as time goes by,” he said.