President David Mocton discusses growth strategies and a recent acquisition
by Tina Manzer,
photos by Hertz Furniture
At the conclusion of their 2021 back-to-school season, the team at Hertz Furniture in New Jersey barely had enough time to catch their breath before the 2022 back-to-school season began, reports David Mocton, company president. “One of my VPs said to me, ‘David, I don’t think last year’s ever ended.’”
Hertz Furniture has been on an upward sales trend since 2012, but in both 2019 and 2021 the school furniture distributor experienced double-digit growth. This year, the heavy ordering cycle that traditionally begins in May got started in January and was fully underway by March. To accommodate all the orders, the company’s installation schedule now stretches into December.
Fortunately, Hertz Furniture was prepared for the onslaught. “By late February, I could see the writing on the wall,” David explained. “There was already a lot of activity in our sales department; I could see that there was tremendous interest. I had to make sure that we were ready for what was coming
To that end, Hertz opened a new warehouse in California, the company’s fourth. The others are strategically placed in New Jersey (two) and Texas. Hertz Furniture also hired a summer crew in April that will remain with the company through October.
“In addition, we’re getting orders to our manufacturers early to ensure they have the components they need down the supply chain to assemble product in time,” David says. “We need timely deliveries to our warehouses so that we can consolidate orders and install them on the date we promised our customers.”
Recently, in a move that speaks more to growth than preparedness, Hertz Furniture acquired School Furnishings, a company whose business model is similar to Hertz’s. School Furnishings served all of New England from its base in Hudson, New Hampshire.
David said, “It’s the first time in our nearly 60-year history that we have looked outside our house for a complementary entity in a region that, for us, was mostly untapped.”
The first school-furniture catalog
Founded in 1966, Hertz Furniture supplies furniture for education, business, government and religious institutions across the U.S. It was the first company to distribute a school furniture catalog, notes David. “The hard-plastic chairs featured in it are still being sold today. You should see some of the pricing. It’s incredible.”
Selling products out of a printed catalog was Hertz Furniture’s go-to business model for many years, “but in 2000, we realized that in order to thrive, we had to become more than a mail-order company. We had to understand what schools were looking for so that we could become experts at meeting those needs.”
Theoretically, to match each school’s need with an effective solution, Hertz Furniture’s sales reps had to understand all the products available from the 300 or so manufacturers the company works with. It’s a lot, David admits, and probably not realistic. “So instead, we have specialists in specific school furniture categories, like outdoor furniture, science lab furniture, and environmentally friendly furniture. We turn to them when we have specific questions and they, in turn, recommend products that fit the need.
“Knowledge like that gives us credibility in the marketplace and helps the school librarian, principal or business manager we are working with feel comfortable with our recommendations.”
A big part of gaining expertise in the school market was understanding the future of education; really all aspects of school life, David adds. “That led us to some of the specialty spaces we furnish today, including outdoor cafeterias, maker spaces, sensory classrooms, and other classrooms in which specialized learning takes place.”
What has not changed is the company’s commitment to its customers. “We pride ourselves on productivity, accountability, and integrity,” says David. “Who we are as a company can be explained in those three words.”
Those words compelled David to make sure this year’s busy season would be different from last year’s. “Twelve months ago, I was absolutely petrified about how we were going to deal with the summer season. At that time, the distribution channel issues were just coming into play. We weren’t aware of the enormity of the problem. We had no idea so we couldn’t prepare for it. We are in much better shape now than we were this time last year; better, even, than six months ago.”
In addition to superior customer service, the company is known for personal attention, lifetime warranties, complimentary interior design and project management, and quick-ship products.
Being acquisitive is a new growth strategy for Hertz Furniture. “We’ve always grown by expanding our ‘focus markets’ as we call them. They include the Northeast, Florida, the Midwest, Texas, and the West Coast, specifically California and Arizona. As they expanded, we brought in more sales reps,” David explains. “Our other option for growth was to look for a company in an area in which we did not focus. In the case of School Furnishings, it was New England. There is a lot of opportunity for us there.
“For the past 56 years, we’ve grown steadily and naturally on our own, servicing the K-12 market, but we felt the time had come for a shift in strategy: to initiate growth in terms of reach and offering,” he added.
School Furnishings was a competitor, “but I always respected them. When we finally got to speak, I realized why: their go-to-market strategy was so similar to ours. It was a perfect fit. Six months down the road, I’ll look at the decision again and see if it was the right one. If so, we can look for opportunities in other areas we’re interested in.”
David bases his market outlook for the company on what he sees happening two years down the road, then five years, and then 10. “All the signs are there for a strong market through to the end of 2023,” he reports. “I can say that with some confidence because the projects we’re currently working on will take us anywhere from 18 months to four years to complete.
“Between 2023 and 2026 or ’27, I think the market will flatten out. There will still be growth, but not like the kind we’ve seen in the last 18 months.”
He attributes that growth to confidence in the economy and the return to school from COVID. “There was a need for schools to create the classrooms they always dreamed about. And those dreams could be fulfilled because there was a lot of federal money.”
In addition to the school market, Hertz Furniture also services the church and office markets, but they are not the company’s main focus. “Schools are,” concludes David. “All our efforts and time are spent on the educational side of our business. Our expertise is in educational furniture.”