Retail Management of Leons Furniture

Learn about the retail management of Leons Furniture, including performance objectives, pricing strategies, and customer loyalty. Discover how social media marketing can help expand the business.

Running head: RETAIL MANAGEMENT
Retail management of Leons Furniture
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Executive summary
Management is a crucial component in every aspect including business. Tracking the
performance of the employees is effective in terms of estimating the progress. This is in terms
of reaching to the benchmark level of performance. All these aspects prove true for Leons
Furniture, which is one of the biggest retailers in the threshold of Canada. Alliance with the
subsidiary, The Brick has enabled the company to expand the scope and arena of the
business. Adopting social media marketing would be beneficial in terms of widening the
scope and arena of the business operations as well as strengthening the customer base.

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Table of contents
Business mission........................................................................................................................3
Performance objectives..............................................................................................................3
Current performance of Leon.................................................................................................3
Gross margin return on inventory..........................................................................................3
Performance measures for:.........................................................................................................4
Input.......................................................................................................................................4
Output.....................................................................................................................................4
Productivity............................................................................................................................5
Merchandise flow.......................................................................................................................5
Category management................................................................................................................5
Assortment plan.....................................................................................................................6
Branding strategies.....................................................................................................................6
Pricing strategies........................................................................................................................7
Cost........................................................................................................................................7
Legal requirements for regulating demand and competition.................................................7
Recommendations for altering current pricing method.........................................................7
Customer loyalty........................................................................................................................8
Summary....................................................................................................................................8
References..................................................................................................................................9
Bibliography.............................................................................................................................10

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Business mission
Leons Furniture is one of the retailers in the threshold of Canada. The first store was
opened in Welland, Ontario. It is a public company, operating under the industry of home
furnishing stores. According to the annual report of 2015, the annual revenue of the company
was recorded as CAD 1.97 billion. The presence of 2864 employees helps the personnel in
achieving efficiency within the execution of the business activities (Leons.ca, 2018). Leons is
the subsidiary of The Brick. Leons deals in mid range furniture, appliances and electronics.
The items in the store rooms are high priced. In the era of 2007, Leons introduced Urban
Living Collection, which comprised of small sofas, bedrooms and dining sets.
The research and development team is efficient and possesses flexibility in the
creating innovative designs for the furniture. Conducting market research assists Leon to gain
an insight into the designs, which the contemporary brands have adopted. As a result of this,
it can be said that adopting social media would be beneficial for the Leons in terms of
expanding the scope and arena of the business operations (Leons.ca, 2018).
Performance objectives
Current performance of Leon
As per the performance of 2017, the annual revenue of Leon was recorded as
$2,212,216. The net income was $96593 and shareholder’s equity value was $10.60. This
represents 3.2%, 15.6% and 15.2% growths respectively. Mention can be made of the sales
growth, which was $2.64 billion (Leons.ca, 2018).
Gross margin return on inventory
Sales ($) Gross margin Average
inventory cost
GMROI
Department A 315,000 50% 104,000 3.02%
Department B 200,000 40% 50,000 4%

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Department C 210,400 48% 86,000 2.44%
Department D 180,000 44% 33,000 5.45%
Table 1: GMROI for Leons Furniture Company
(Source: Created by the author)
Performance measures for:
Input
Leons Furniture Company uses fair value hierarchy for categorizing the performance
assets and liabilities. This segmentation is as follows:
This is done in three levels:
Level 1: Prices are quoted for the assets and liabilities, which are active within the markets.
Level 2: Inputs other than the quoted prices, which are included in Level 1 are directly or
indirectly observed
Level 3: Inputs for the assets and liabilities, which are not based on observable data (Leons,
s2018)
Output
As per the terms and conditions of IFRS 11, Leons Furniture indulged in joint
ventures. This is through the means of recognizing the share value of the assets and liabilities.
Within this, focus is laid on revenue share from the outputs. As a matter of specification, the

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output from the joint operations including the shares are collaboratively incurred (Leons.ca,
2018).
Productivity
Leons profitability is well placed within the core retailing business, which is carried
out as per the industry norms. Initiatives like acquisitions, digital commerce and third party
distribution enhances the sales revenue and the profit margin. Excess cash flows compels
Leon to be selective in terms of choosing the alliances. Investment criterias includes research
about the leading furniture brands within the Canadian market. The personnel are aware of
the joint share holdings of 20% with The Brick. Adopting omni channels has enhanced the
scope and arena of the retail marketing as well as supply chain network. State of art
distribution modernizes the distribution channels (Leons.ca, 2018).
Merchandise flow
Mention can be made of the extended warranties, which Leons produces on certain
merchandise. The management exposes judgmental decision making for specifying the time
period for recognizing the warranty revenue. Merchandise imported from US and Southeast
Asia receive payment in dollars. This value is equal to Canadian dollar, which is translated at
the year-end through the exchange rates. The return policy is beneficial in terms of respecting
the purchasing power of the clients and the customers. If the customers are not satisfied with
the product, they can return within 7 days. When the customer picks the order, the
merchandise value is recognized (Leons.ca, 2018). While selling the gift cards, the personnel
can track the use of the cards. This would be beneficial in terms of averting the illegal
instances of thefts, robberies among others.
Category management
One of the category, which Leons Furniture sells can be small sized sofas.
Merchandise for these sofas come from the spare parts, which are assembled from the

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neighboring countries like United States. In case the customers find any defect within the
purchased sofa, they can exchange it within 7 days. However, this needs to be done according
to the terms and conditions of the exchange policy. In terms of this policy, this category can
be placed in the maturation stage of the product life cycle (Leons.ca, 2018). This is because
the managers are in contact with the higher authorities in terms of revising the terms and
conditions of the policy.
Assortment plan
Branding strategy: To sustain profitability
Business model: Value chain analysis
Current market trends: Low costs for the furniture
Sales and margin history: $2,212, 216 in 2017 (3.2% growth)
Channels or distribution requirements: Social media
Financial plans: review of the current trends and statistics for enhancing the understanding
about long-term effects
Review of the current position would be effective in terms of upgrading the standards
and quality of the business operations. Social media would be beneficial in enhancing the
scope and arena of the distribution channels.
Branding strategies
The national brand, under which Leon sells the furniture is Leon. Some of the
furniture are sold under the subsidiary brand, The Brick. The private label brands are
Crystoceans, Transglobal, The Brick Outlet, TGW and TGI. Expansion through contracts
with the private label brands would be effective for Leon in terms of enhancing the scope and

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arena of the business (Leons.ca, 2018). Along with this, the contracts would widen the
distribution channels, indicating the enhancement of productivity.
The private label brand strategy undertaken by Leon is sustainability in the upcoming
financial years. Strategic planning for indulging in alliance would be crucial in terms of
securing the market position. Consistency in the strategic planning would reflect conscious
approach towards preserving traditionalism. On the other hand, focusing on one particular
strategy for long time would compel the employees to feel bored in the process of executing
the business activities. For this, revisions need to be done at frequent intervals for luring the
clients and the customers towards the brand image (Leons.ca, 2018).
Pricing strategies
Cost
When dealing with the costs of the furniture, Leon personnel consider the expenses
regarding the labour charges, salary, and commission among others. Along with this,
assistance of the Commerce department is needed in terms of assessing the effectiveness,
appropriateness and feasibility of the adopted pricing methods.
Legal requirements for regulating demand and competition
Mention can be made of the current condition of the supply of raw materials, which
are reviewed for calculating the demands for the furnitures. Within this, graphs are prepared
for gaining an insight into the relationship between the demand and supply. This is assistance
in terms of measuring the position within the competitive ambience of the market (Leons.ca,
2018). Alliance with the statutory bodies of law is beneficial in terms of averting the illegal
marketing activities.
Recommendations for altering current pricing method
Currently, the company is following competitive pricing strategy for measuring the
position in the competitive ambience of the market. On the contrary, Leon can adopt

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penetration pricing method, which would be beneficial in terms of penetrating into the
foreign markets. Within this, adjustments needs to be done according to the needs, demands
and requirements of the clients and the customers. For this, the means of survey and feedback
can be considered. Modification of the business operations, according to the opinions of the
clients and the customers would help Leon to stimulate the sales revenue and productivity as
a whole (Leons.ca, 2018).
Customer loyalty
Leon believes in catering to the special needs, demands and requirements of the
customers. For achieving loyalty, trust and dependence from the customers, various loyalty
programs are conducted. These programs are consistently monitored for tracking the response
of the customers towards the business methods. Within the marketing strategies, focus is
placed on the ways through which the purchasing power and affordability of the customers is
protected. Social media marketing can be adopted for increasing the trafficking of the
audience towards the brand image. Installation of privacy cookies and policies would be
effective in terms of gaining trust, loyalty and dependence from the clients and the customers
(Leons.ca, 2018). Special discounts, schemes and offers can be introduced within the
urchased furniture. This would act as a caring approach towards the passion of the middle
class customers to buy branded furniture.
Summary
Leons Furniture has attained a greater share in the competitive market of Canada.
Alliance with the subsidiary brand, The Brick has been assistance in terms of enhancing the
sales revenue and profit margin. Adopting penetrating pricing method would seem fruitful in
terms of assessing the possible sources from where the company can enhance the sales
revenue and profit margin.

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References
Leons.ca (2018). About us. Retrieved 30th Nov 2018 from https://www.leons.ca/

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Bibliography
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419-439). Springer Gabler, Wiesbaden.