The decision to open multiple locations isn't necessarily
right for every retailer. For Mike Johnson, owner of
Re·finery, a 1,200-square-foot home furnishings store in
Laguna Beach, California, opening a second store may be an option
down the road. For now, however, growth comes from a different
source: a spinoff.
When Johnson opened Re·finery in 1994 out of a passion for
furniture, he was certain he'd want to grow the business one
day—he just wasn't sure exactly how. "I knew one
location or one business wasn't going to be the end of
it," says the former engineer. "The logical progression
would have been a second store, but I decided that wasn't the
best use of my resources."
With its eclectic array of merchandise—furniture and
knickknacks that are mostly either refurbished or made from old
wooden items like windows and doors—Re·finery requires a
very specific type of location to be successful, according to
Johnson. So instead of going the traditional route, he decided to
launch a wholesale line of accessories, which he designs and sells
in his own store and others like it in Arizona, California, and
Nevada.
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Overall sales have increased so much since Johnson debuted the
wholesale line that he believes it may one day eclipse the retail
store in terms of revenue. "Right now, I'm looking for all
my growth to come from the wholesale line," says Johnson.
"By next year, I expect wholesaling to be the bigger part of
my business."
Before going the spinoff route, Johnson considered opening a
second store similar to Re·finery or opening a
tourist-oriented store in Laguna Beach to appeal to visitors to the
seaside community. He even thought about launching a completely
different business—a rubber stamp store. But he decided it
wasn't in the best interests of the company. "Opening
something completely different didn't make sense," he
says, "especially when I started running through the
numbers."
Johnson may one day open as many as three additional stores, but
for now growth is occurring naturally through wholesaling. In the
meantime, he's realistic about growth-and how long it will take
to do it right.
"I want to focus on the wholesale line, and I expect
it's going to take a few years of energy to make it pan
out," he says. Above all, Johnson is determined to grow his
business slowly and carefully. "I eventually want to expand
[the wholesaling business] nationwide," says Johnson,
"but not until we're ready."
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