Del Sol Furniture & Mattress received the 2020 Furniture Industry Leadership Award. Alejandro “Alex” Macias and Rosa Macias of Del Sol accept the award on behalf of Del Sol, which has four stores in the Phoenix metropolitan area.
By Gary James | Special to Furniture Today
Since its launch in 1997, Phoenix-based Del Sol Furniture has had one mission: furnishing dreams.
For the founders of this four-store furniture company, named for the Valley of the Sun, those two words have always had special meaning. The reason? Just three decades ago, the husband-and-wife team made the difficult decision to leave their lives and home in Mexico City to follow their own dreams of providing their children with a better education and more opportunities than their generation.
So, in 1990, Rosa Macias, a trained accountant, and her husband Venancio, a civil engineer, obtained visas and transplanted their young family to El Paso, Texas, where they began making a living by selling bunk beds made in Mexico at weekend swap meets. By the early 1990s, the family had moved to Phoenix, where they partnered with Venancio’s brother to open a 2,700-square-foot shop called Let’s Make a Deal Furniture on the east side of town.
Catering mostly to the Hispanic market, the store distinguished itself by offering strong values backed by in-store credit, a luxury that most of its customers had never had before. The affordable credit enabled the retailer’s customers to acquire furniture that they otherwise would not be in a position to buy. In addition, it created a base of loyal repeat business that continues in the form of second- and third-generation shoppers.
By 1997, Rosa and Venancio opened their own small store, Mueblería Del Sol, and created their own financing company. A year later, when they were having trouble finding a new location, the couple obtained a construction loan and built a new shopping center catering to Hispanic entrepreneurs.
“My parents took a risk, but it turned out to be a good move because it put them in control of their own destiny,” said Alejandro “Alex” Macias, Rosa and Venancio’s son and the company’s vice president. “My father was tired of the constant rent increases, and with this investment, he went from being a tenant to a landlord.”
Early involvement
Alex Macias and his sister Minerva grew up with the business. “Even after they opened their store, our parents continued to do the swap meets,” Macias said. “We usually had a few bunk beds and a sofa or two on display, and we’d pass out fliers. We were six to 10 years old or so, and we thought it was normal for kids to work every weekend. My parents even had a rule that we couldn’t spend any of the money we had earned at the swap meet until we sold something.”
For many years, Rosa and Venancio worked long hours at their business, keeping their staffing lean and expenses low. While Alex and Minerva always helped out, when it came time for college, both children were encouraged to consider other careers, Alex said. “There was no pressure for us to join the business. They wanted us to do something that was more of a white-collar career.”
In 2005, Minerva Macias received a business degree at Arizona State University, and in 2007, Alex Macias graduated from the university’s W.P. Carey School of Business. He was preparing to head to law school when the great recession hit and the whole picture changed.
“From 1997 until 2007, my parents’ business had been experiencing double-digit growth each year,” adding several additional stores, Alex Macias said. Then, almost overnight in late 2007, sales fell dramatically.
Macias’ mother responded by making immediate cost cuts, Macias remembered. “If business was down 40% one month, she chopped expenses 40%.”
The fact that the company rented space at its mall location to other tenants helped cushion the blow by providing another source of revenue. But its recent acquisition of a local 44,000-square-foot warehouse was an added expense. “My parents bought that distribution center a few months before the downturn, so that was a problem. They didn’t back away, but we did close the two smallest stores to cut costs.”
From 2007 to 2009, Mueblería Del Sol’s sales dropped about 60%. At the same time, new competition also came to town in the form of Mexican retail powerhouses Famsa and La Curacao. “They came in strong, with ad spots all over TV,” Macias said.
Since Mueblería Del Sol’s stores were smaller, and it didn’t have the budget for lots of advertising, the retailer decided to compete with the new stores on service, Macias said. “We made a lot of changes to how we handled things like returns, warranties and deliveries. We became a more customer-friendly business.”
The retailer also saw its customer base shift. A changing political environment had made immigration a hot-button issue, and with it came new business and social pressures. The decision by the governor in 2010 to sign Arizona Senate Bill 1070 — an immigration law that calls on police officers to check for citizenship documentation — caused many Hispanic customers to pull back on spending or leave the state altogether, and that put a big dent in Del Sol’s traditional customer base.
At this point, the retailer changed its name to Del Sol Furniture. It also started doing more bilingual advertising — mostly English, with some Spanish — and it expanded the range of options in its credit program to serve a broader base of non-Hispanic customers.
The onset of the recession encouraged Macias and his sister to join the family business fulltime and put additional schooling on hold. Since Macias’ college majors were accounting and computer information systems, he focused his energies on getting the tech side of the company up to date.
“The recession was a blessing because our business was either going to move forward or backward,” Macias said. “Coming back to the business gave me a new appreciation for what my parents had built and the many opportunities that existed.”
Leveraging technology
The recession provided a good opportunity for Del Sol to upgrade all its technology, from point-of-sale and the website to inventory management and other operations. “Technology made us much more efficient. We got a better handle on our ordering and deliveries and found new ways to increase customer satisfaction.”
Early on, Macias thought that Del Sol’s future would be in e-commerce rather than its brick-and-mortar stores. “I imagined that we could make this business an e-commerce machine and sell furniture to shoppers all over the country,” he recalled. “I quickly realized that shipping bulky dressers from Arizona to the East Coast wasn’t going to be profitable. Since then, we’ve focused our website efforts on educating consumers, and it’s turned into a very successful marketing tool.”
Today, Del Sol operates four stores in greater Phoenix, including one outlet location. Its largest store is 23,000 square feet, and the others range from 12,000 to 17,000.
Its newest store, opened in late 2019 in Mesa, is located at the edge of a furniture row in a shopping building Del Sol purchased that also includes a Mattress Firm.
“At some point, to stay competitive, we’ll need some bigger stores in the 30,000- to 50,000-square-foot range. We would like to expand our displays in a number of categories, like dining, where our offering online far exceeds what you can see in the stores, and we need more space to do that.”
Since the last recession, Del Sol has been conservative about adding stores, Macias said. “But when the right location comes along, we’ll be ready.”
He added that the current wave of closures throughout the retail community is creating attractive opportunities. “There are prime spots that are beginning to open up.”
Del Sol’s current product assortment focuses on the middle segment of the market. The retailer began to move away from promotional goods in 2014, when American Furniture Warehouse and other new competition came to town.
Categories on the grow
One area that has been doing particularly well for Del Sol Furniture is custom upholstery. “We started a custom program about two years ago, and it has been very successful,” Macias said. He sources the program locally from a small producer, which enables the store to offer both exclusive products and fast turnaround on orders.
Another bright spot for Del Sol is bedding. The company markets its own house-branded line called Viva Sleep, which features memory foam, premium latex, pocketed coil and innerspring models. The assortment starts at $199 retail for an 8-inch queen innerspring model and tops out at $1,499 for a queen-sized Eurotop mattress with graphene memory foam and a cooling fabric. Del Sol sources the line from Diamond Mattress.
“Bedding used to be an afterthought,” Macias said. But starting in 2009, as the economy started to emerge from the recession, Del Sol took a fresh look at the category as a result of insights gained from attending Profitability Consulting Group sessions.
“Ron Wolinski (a vice president at PCG) helped us see bedding in a new light,” he said. “We realized that nobody was speaking to the bilingual customer in our market about the importance of sleep and the role it plays in good health.”
Wolinski also helped the retailer see the importance of getting this category right “because a satisfied mattress customer is someone that will come back to the store for other furniture again and again.”
With Wolinski’s help, the Del Sol team remerchandised its bedding department. The retailer added more products at the upper end of its range to create additional step-up opportunities, and it created small bedding galleries in its store to bring more focus to the category.
“Every mattress on our floor fills a specific purpose, price point and niche,” Macias said, adding that the lineup is designed to appeal to families. “A lot of our customers have big families, and the youth category is big business for us.”
In other categories, such as case goods and upholstery, Del Sol’s lineup is a strong assortment of leading, high-value brands. Key vendors include Ashley, Coaster, Crown Mark, Furniture of America and Parker House. In rugs, Surya is a best-selling line, and for accessories, Del Sol does well with Uttermost. In addition, the retailer carries a number of house-branded furniture under the Del Sol Exclusive label.
While at one time Del Sol’s assortment leaned toward rustic and traditional designs with carvings and decorative finishes, in recent years, it has emphasized transitional styling, with cleaner lines and lighter finishes.
Power of metrics
To guide its buying decisions, the company pays close attention to activity on its website and other shopping behavior.
“We’re always studying our data,” Macias said. “We analyze our website metrics to see which products get the most hits and where shoppers are spending the most time. And we keep a close eye on the daily sales activity and bounce rate on our website.”
Based on this data, “we constantly adjust our mix to make sure we focus our attention on the best-selling brands, categories and collections.”
To keep its website up to date, Del Sol Furniture teamed up with FurnitureDealer.Net. The network has proven to be a valuable source of tools and strategies for the digital side of Del Sol’s business, Macias said. “They help us stay current so that we make the most out of every visitor to our site.”
In 2015, FurnitureDealer.Net recognized Del Sol Furniture for its excellence in communicating merchandise availability online. The retailer increased the sales of its in-stock merchandise and also raised e-commerce revenue by providing more transparency to customers.
“Del Sol wanted to improve the user experience of its omnichannel shoppers by making it easier to see the availability status of merchandise displayed on its website,” FurnitureDealer.Net said about the initiative. “So Del Sol piloted a program to integrate warehouse availability status feeds from several of its suppliers into its website.”
The availability status of these brands is automatically updated daily. Shoppers also can narrow their search to browse all products within a category or just those that are on display in stores, special orders and express special orders (available within a week).
A community advocate
Since rejoining the company in 2007, Macias has become a passionate student — and advocate — of the industry. Early on, he got involved with the Western Home Furnishings Assn. and then, after it merged with the National Home Furnishings Assn., the Home Furnishings Assn. That involvement led to him joining the HFA’s Next Gen group, where he met “a phenomenal group of young industry professionals with similar interests.”
“I like to network and help people,” said Macias, who has served on the HFA board. “Furniture is a crazy business with constant changes and challenges, so I am always on the lookout for new ideas and insights.”
In addition to his industry involvements, Macias — like his parents and sister — also is an active contributor to his local community. Currently, he serves on the board of directors of Local First Arizona, a nonprofit that promotes locally owned businesses.
“We believe in our community and want to do all we can to support it,” Macias said, adding that his mother has set a particularly strong example in this area. “She is very involved and for many years has hosted a talk show about social issues on a local Spanish radio station.”
Rosa Macias continues to serve as CEO of the company, and Alex’s father and sister also are involved as officers. “My mother is our leader, and everyone loves working for her,” said her son.
Del Sol Furniture also contributes to the local community of Hispanic-owned businesses by hosting mixers, offering expert advice and leading by example in humanitarian efforts. When Hurricane Maria struck Puerto Rico and an earthquake shook Mexico City, for example, the company’s staff voted to forego the annual holiday party and donate those funds to relief efforts.
The retailer also recently teamed up with Grand Canyon University to donate mattresses and beds to a family in need; it refurbished a local 21-unit apartment complex for seniors and those living with autism; and it is an active supporter of the Phoenix Children’s Hospital and St. Jude’s.
Going forward, Del Sol Furniture expects to continue growing by focusing on its core values of value and service.
“Over the long term, we have to make sure we take care of our customers,” Macias said. “These days, customers start their shopping journey online, and they look at reviews to form an opinion of where they want to shop. Reviews are critical, so we go out of our way to ‘wow’ the customer each and every time.”
In those instances where Del Sol is perceived as coming up short and a customer posts a poor review, the retailer goes the extra mile to reverse the situation.
“When we make a mistake, we don’t hide it — we fix it,” Macias said. “We flip that customers’ experience, so what was a negative review becomes a positive one. That adds to the authenticity of our reviews, since visitors see how we handle things when there’s a problem.”
While this year’s business environment has been especially challenging, sales have gotten “a nice bump” from the increased time that consumers are spending at home and the reduced spending they’re making in other categories, such as travel and dining out. “Everyone at our stores is working long hours, but we’ve done a good job of managing the situation and keeping everyone — including our shoppers — safe.”
The bedrock of Del Sol’s success has always been its “amazing team,” Macias noted. “Every single team member really cares about our mission and how we do it. It’s because of them that we are able to stay open and growing.”
Thanks to its strong vendor relationships, Del Sol also has managed to keep up with demand while many other retailers have had trouble finding product. “We see our vendor relationships as a two-way street, and they appreciate that.”
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