Lee Zeglin and Duncan Kramer at their new Moline store.
Buys a building and moves its legacy store amidst the pandemic
By Andy Kriege, YSN
Zeglin’s Home TV & Appliance operates two stores, in Davenport, Iowa, and across the river in Moline, Ill.
The family-run business began nearly half a century ago in Moline, where the BrandSource dealer had long rented the building. More recently, however, the company had begun kicking around the possibility of purchasing its own property and relocating the Illinois store.
The passing of Zeglin’s longtime landlord in the spring of 2020 provided the necessary impetus to kick their search for a new site into high gear.
The timing was great in terms of interest rates and available options. However, the timing also coincided with the breakout of a worldwide pandemic, making any huge business decision at that time a risky proposition to say the least.
YSN spoke with Duncan Kramer, one of Zeglin’s principals, about the thought process that went into making such a huge gambit at a time of so much uncertainty.
“The entire leadership team discussed it,” Kramer recounted, “and unanimously decided we had the confidence to take this business to the next level in spite of the pandemic or any other short-term speed bumps we may encounter.”
“We factored in what we were paying in rent and the numbers all made sense,” he continued. “We concluded that on a monthly basis our net output would be about the same owning as renting. More importantly, if we purchased a building we would own and control more of the terms.”
Gaining control over one more aspect of the business was key in their decision process, Kramer noted. “We looked at it as an opportunity to be more stable during an unstable time by being able to control all the facilities we do business in. We were concerned that had we not done so, the cost to purchase real estate might go up as well as the cost of the money,” he said. “We were also concerned that our rent may go up when new owners stepped in. There were so many things we could not control, so we focused on what we could. We decided to be proactive rather than reactive and made the decision to buy.”
After considering several stand-alone buildings and a few shared-space arrangements, the leadership team eventually agreed on a retail space that was just two blocks away from their existing store. The property was originally built as a Goodwill shop, had most recently housed a Sears Hometown store, and, as an added bonus, contained two additional rental spaces that could help defray the cost of the purchase.
Zeglin’s eventually moved into the new facility last spring. “We must have looked like ants at a picnic making the entire move over a single weekend,” Kramer quipped.
The new showroom is about a third larger than the previous store, with a larger storage area, and also laid out nicely for extended outdoor products. “We are now able to offer some destination lifestyle offerings that we simply could not do in the previous space,” Kramer said. “We felt it important to offer people an experience that the Internet simply can’t provide.”
The real estate gambit apparently paid off, as the new store has enjoyed a significant sales bump since the move.
“We bring in unique products that people really love to see, even if they don’t buy one,” Kramer explained. “Ford dealerships will park a Shelby in the showroom and sell four-cylinder Mustang’s all day long to those who stop to look at the Shelby. We do the same with induction cooktops and Hamforge grills. These are things people will not find at the lumberyard.”
The leadership team frequently travels between the Illinois and Iowa locations, as well as the company’s warehouse facility. “I think it is important for leadership to have a presence in all locations to maintain a consistent culture for the entire operation,” Kramer said.
While the new Moline store has yet to host a formal grand-opening event, Zeglin’s hopes to hold some sort of celebration soon. “With availability issues and COVID issues, we kind of had a 10-month soft opening,” Kramer said. “We hope to do something more formal this summer.”
BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, mattress, furniture and CE dealers.