Furniture rental companies have been bucking the trend and seeing an increase in business. Their secret? Expanding their offering and adding value. Anna Lambert finds out more.
Where once furniture rental might not immediately have been considered an option for companies relocating their employees and wanting to add value to the accommodation on offer, these days the picture has changed. Today`s furniture rental companies are supplying stylish, affordable and flexible options. Accordingly, increasing numbers of blue-chip organisations are recognising the cost benefits that furniture rental can provide and the ways in which it can make life easier, both for themselves and for relocating employees. Not surprisingly, this is having a positive effect on their all-important bottom lines.
The Fully Furnished Group, for instance, recently announced a profit increase for 2009, at the halfway mark, of 20 per cent year on year. Rather than one single factor influencing this, however, managing director Alec Watt attributes it to a combination of an increase in all areas of the business. `At the beginning of the year, the big freeze saw a surge in demand for emergency furnishings when there was widespread flooding. We were making deliveries on a daily basis, and our staff went beyond the call of duty to ensure that everyone who needed our assistance was aided when they most needed it.
With individuals keen to sell their homes in today`s buyers` market, however, it`s perhaps not surprising that it`s the property-staging arm of the group that has seen the largest increase. `We`ve seen an 87 per cent success rate of selling or letting on properties that we`ve dressed for agents,` says Alec Watt.
Whereas, historically, it may have been the middle market agents and developers that turned to staging as a marketing tool, it is now commonplace for professionals dealing in the luxury homes market to use this method too, and it`s for this reason that a new brand was established within the Fully Furnished Group. Explains Alec Watt, `We wanted to cater for all budgets and tastes, and so we launched Callister Russell, an interior design consultancy and furnishings supplier for luxury interiors. It`s able to offer a more bespoke service for those individual high-end properties that require the wow factor.
Melanie Whetstone-Magee, of MWM Home, is someone else who believes offering a design service can make all the difference to the furniture-rental experience. `Our background in interior design means that not only are we able to put great looks together for a client, we`re also able to get hold of specific pieces at extremely competitive prices. We believe our unique selling point is that companies don`t have to tie up finances by putting down a deposit on any furniture that they rent from us. Instead, they pay a small insurance premium. This means working with us is a very cost-effective option for them.
With progression high on the agenda for any forwardthinking furniture rental company, facilities such as online ordering via virtual stores` are fast becoming de rigeur.
The Fully Furnished Group, for instance, has an ordering service that offers clients the flexibility either to rent complete furniture packs or to mix from the various ranges available. `It`s a particularly useful option for relocation agents who may have to move employees quickly and have varying budgets to accommodate,` says Alec Watt.
He also puts the group`s success down to the calibre of the staff it employs. `This has helped us achieve a significant increase in business and market share as we continue with our ambitious plans for growth.
Roger Hollis, managing director of Roomservice by CORT, is someone else who`s seeing his company grab the opportunities that the current economic crisis has thrown up. `This is definitely a growth period for us. We`re seeing lower volume, but a higher level of executive is using our services this year, so the furniture agreements are larger and longer. This revenue makes up for the lower number of deliveries. Although the numbers relocating have dropped, business has held up well.
`What we`ve worked particularly hard on doing,` he continues, `is the process of educating companies and, in particular, HR departments about the benefits of renting furniture. We`ve recently produced White Paper research that shows that, by renting from us, companies could make a 10 to 20 per cent saving on what it would cost were they to ship the employee`s furniture over from their home country.
Companies are also cottoning on to the tax benefits of renting rather than buying furniture. Explains Roger Hollis, `Companies want non-performing assets that don`t appear on their balance sheets. While they sometimes give out lump sums to their employees to cover moving expenses, if that money is used to buy furniture, it must be declared. If it`s used to rent it, however, it`s taxdeductible.
Moreover, Roomservice by CORT has recognised the need for price flexibility, to give the customer what they want, but at the best possible price. `It`s at the middle to lower end of the market that we`re seeing real pressure on budgets,` says Roger Hollis. `That`s why, for anyone renting furniture for a six-month period or longer, we now offer a 35 per cent discount on our standard range. We`re able to do this because, although the range is in excellent condition, it`s due to be discontinued.
Mr Hollis says that the Roomservice guarantee, which ensures that delivery staff are uniformed and turn up in clean-liveried vans at the property within the pre-arranged two-hour slot,
has made a big difference, both to its clients and to the morale of its own staff. `It`s the ultimate way to show that we take real pride in our work.