Furniture retailer Room & Board has best August, September in history despite pandemic

Room & Board started 40 years ago offering budget-friendly flat-pack, ready-to-assemble furniture after its founder, John Gabbert, traveled to Sweden and visited Ikea.

That was five years before Ikea opened its first U.S. store, and Room & Board featured the same kind of budget-friendly, flat-pack, ready-to-assemble furniture. The company name echoed Ikea's "everyday basics of life."

The current president was among those who bought a $199 foam sofa sleeper, a hit among the 1980 debut offers.

"I purchased one of those before I started working for Room & Board," said Bruce Champeau, president of the furniture retailer, who has been with the company for 29 years. "Back then, Room & Board was in the spirit of Ikea until the late '80s, when things began to change."

While its classic modern furnishings have remained true to the name in style, the quality and pricing have ascended to loftier middle tiers since the '90s. The offerings — and the retailer — also have shifted with the market, including this year.

The coronavirus pandemic made the store expand its marketing and sales model. So far, so good. The retailer had its best August and September in its history and will post a yearly sales gain as people focus on fixing up their homes since they are spending so much time in them.

That was the case with longtime customers Joe and Phyllis Begg of Minneapolis, who have a 20-year-old dining-room table from the store. Last Saturday, they bought a Harper leather recliner at the Room & Board weekend outlet in Golden Valley, saving $600.

"We like the clean, unfussy design that works well with other brands," Phyllis Begg said. "After we bought our new condo, we're spending more time in a smaller space due to COVID, so we're making a lot of trips to Room & Board to make it look nicer."

John Gabbert is the son of Don Gabbert, who opened Gabberts furniture on Nicollet Mall in 1953. Gabbert, who declined to be interviewed for this article, is still chairman and majority shareholder of the retailer, whose ideas and shifts were influenced by his travels and observations. His family and 12 Room & Board staff members are also shareholders.

The first store was in Denver, not the Twin Cities.

"John Gabbert would vacation and ski in Colorado," said Champeau. "He felt it was a market to support the concept."

Soon, a store followed in Edina, and the retailer now has 20 stores in 11 states, including a pop-up in the Hamptons and the Golden Valley outlet.

Nearly all of Room & Board's products are made in the U.S., many in the Midwest. It works with more than 100 vendors, but 27 furniture vendors make up the majority. Almost all of the brands are exclusive to Room & Board.

Greg Benson, founder and CEO of Loll Designs in Duluth, started partnering with Room & Board in 2008 on outdoor furniture. They reinterpreted the wooden Adirondack chair into one made from recycled milk jugs called the Emmet.

"Room & Board made us a better company," Benson said. "We saw their commitment to customer service and had to rise to their level."

Benson appreciated Room & Board's three-legged stool philosophy — people, planet and profit. "You can't have one without the others," Benson said.

Last year, Room & Board received a top score from the National Wildlife Federation and Sustainable Furnishings Council for responsible wood sourcing policies. Its Wood from the Hood project reclaims urban trees around the Twin Cities.

Other awards include being a great place to work, including for women. It's also a longtime supporter of LGBTQ rights, including health benefits for partners before marriage equality and support for people living with HIV/AIDS.

Recent sales at the home-furnishings retailer, ranked 25th among Furniture Today's top 100 furniture stores in the U.S., have been more than $400 million.

Champeau expects that to top $500 million in 2021 with sales up strongly this year despite the pandemic. "The sales drop was significant when the stores closed in April, but sales in August and September were record setting," he said.

Part of that increase was due to promotions, including 0% financing and free delivery. While that may not impress a Wayfair shopper, Room & Board had not offered it before, even in the 2008 recession.

It held fast to one of its core beliefs — annual pricing. The company sets prices early each year and does not raise them or lower them all year. Markdowns occur only when items are being discontinued or sent to the outlet as a floor model, canceled special order or a scratch and dent.

Staffing has been cut 18%, with positions added to process and fulfill online orders, which now makes up 60% of sales. Twenty-five sales associates work virtually from home, an idea that began with one associate in 2012 and took off due to internet sales and then the pandemic.

The company has experienced missteps over the years. For example, it closed two locations in the Twin Cities, Roseville in 2005 and Gaviidae Common in downtown Minneapolis in 1995.

But its formula has held steady, with some of its designs introduced decades ago. "The York sofa looks mainstream today, but in 1997 it was considered modern because it doesn't have a rolled arm," Champeau said.

After many customer requests, Room & Board introduced a bath collection in 2018 with vanities, mirrors, lighting and bath decor. The Linear vanities are an extension of the highly popular Linear storage furniture inspired by the Arts and Crafts movement.

For Champeau, 40 years in business is more about relationships than the company.

"Our staff, vendor partners and our customers have made us what we are today," he said.

John Ewoldt • 612-673-7633