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LI furniture firm diversified to survive

On the left, Mark Damico, president, and vice

On the left, Mark Damico, president, and vice president Frank Pita in the showroom of The Workplace Group with a Sharp multi format printer and office furniture, Hauppauge. (Mar. 29, 2012) Credit: Heather Walsh

The nation's financial crisis threatened to turn the business of The Workplace Group, a Hauppauge retailer of office furniture, into kindling.

The company's customers, many of whom were struggling, were neither expanding nor moving -- key drivers for companies to buy furniture.

Revenues at Workplace, which has a single sales location, took a 25 percent hit from 2008 to 2010, falling to about $6 million, said president Mark Damico. He said he knew he had to do something fast.

"The stock market was dropping daily, and many Long Island businesses were shutting their doors, including other office furniture dealers," said Damico, 51. "Our traditional business model, which had brought us success for the previous decade, had to be radically altered."

Fight for survival

The financial crisis upended the business models of many other Long Island businesses, too, such as home builders and mortgage brokers. In the office furniture business, sales on Long Island fell from about $80 million in 2007 to about $51 million in 2010, according to the latest data from the Business and Institutional Furniture Manufacturer's Association in Grand Rapids, Mich.

One survival method: finding additional business lines to bring in revenue.

"Small businesses in this economy have to look to diversify their product line," says Jack Signorelli, a certified business coach and owner of Soundview Business Solutions, a consultancy in Northport. "They have to add products that fit with their overall corporate strategy."

When adding secondary products, companies should look for ones that they can sell to their existing customers, he said. Selling to them costs an eighth to a tenth of the expense of finding and selling to new clients.

Damico had to get his costs under control before he could make a shift in strategy. In mid-2009, as sales fell, he considered but decided against layoffs among his staff of about 20 and persuaded employees to cut their workweek to four days, temporarily.

He then started to think of what else he could sell.

Adding moving services

For Workplace, one natural fit was moving and relocation services -- which often meant assisting companies that had to downsize, said Frank Pita, vice president of sales and part of a management team that includes chief operating officer Shukry Mishrick and Art Desin, director of government sales. Space planning, reconfiguring and relocating offices, often for existing furniture clients, now represents about 10 percent of the company's sales.

Another approach: adding sales of less expensive, functional office furniture. The company began selling several lines that ranged from $150 for a chair to $500 for a desk, 25 percent to 35 percent less expensive than its original offerings. The new lines helped cushion the decline in sales.

And Workplace created a separate subsidiary, Workplace Document Solutions, to sell copiers and wide-format printers, which now represent about 10 percent of its business. It was another natural fit with the company's existing customers.

"We'd like to grow it to 25 percent [of revenues] in the next two years," Damico said.

After two years of sales declines, last year the company snagged some large multimillion-dollar projects, including headquarters moves by Teachers Federal Credit Union, from Farmingville to Hauppauge, and by ARC Excess and Surplus, from Garden City to Jericho.

The new business lines -- and slowly recovering economy -- have been key. Damico said the company's steps have started to pay off: Annual sales in 2011 were up 20 percent from 2010, to $7-million-plus.

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