Refining Responsibility
Better presentation makes sense now, said buyers, because domestic and foreign manufacturers have overcome earlier quality problems, have improved product styling and packaging and are able to support continuity and promotional programs. Also at play is the widespread attempt by chains to improve in-store taste levels.Nichols' buyer Bill Levine, for instance, noted strong consumer response, noted strong consumer response to a recent ad testing a $120 sale price for a better-featured unit, which he plans to repeat.Such monetary management has been Howell's style for 32 years, from the day he bought two trucks with his savings and started his own trucking line hauling fuel around the bayous of Louisiana. Howell had no particular yearning to drive trucks, or own them, but in 1953 he had just finished eight years of active duty in the U.S. Navy and was looking about for his own business.That performance, linked with fast volume growth, makes the time ripe for increasingly aggressive discounter merchandising, buyers said. There's another positive trend for kd, said Dubin: the sticker shock felt by furniture rose substantially felt by furniture shoppers the past two years. "The price of real furniture rose substantially during the heavy inflation period of the late 1970's and early 1980's. But consumers didn't see or feel it because they were out of the market. Now, when they need wall units and chairs, they'll consider kd because of the big price difference," Dubin said."Oh, I got a lot of response, but not much in terms of people saying, "Hey, I think we should start getting our ship in shape.' And I'm not surprised at that.'A student of history, Howell sees debt as a "demanding master.' His own company pays for drilling from its cash flow, not from bank loans or funds solicited from limited partners.Nor were business leaders surprised that Howell wrote the book. A registered Republican who has raised funds for national political candidates, including Texan John B. Connally, Jr., Howell not only talks and writes fiscal conservatism but practices it from the time he gets out of bed. The suit he puts on is usually bought off the rack, although he could afford tailor-mades; he fights the traffic each morning, driving himself to work; and on long distance trips he will catch a commercial flight when possible, instead of using the company's private plane, because the cost is less.The secretary pulls closed the yards of transparent draperies in Paul N. Howell's 18th floor executive suite, reducing the morning glare from the glass facade of Houston's skyline. The millionaire oilman sets aside a sheaf of papers on his desk and, closing the middle button of his suit coat, strides across the room to greet his visitor.Convinced interest rates will increase as the government funds the deficit, he believes tomorrow's markets will belong to strong companies whose internal cash-generating capacity insulates them from the rising cost of borrowed capital. Howell Corporation is such a company."We have interests today in wells in about 12 states and Canada,' Howell says, "or a total of about 3,000 wells.'Bradlees has begun using carpeted mock-room settings in some stores to increase impulse sales. Gold Circle may experiment this year with open furniture samples by the race track and boxed stock on a back wall, relying on signing to direct customers. In its prototype stores, S. E. Nichols uses multitiered carpeted platforms to increase visibility and appeal of many products, fronting the race track with a miniroom setup.K mart's current best seller is a medium oak or walnut entertainment center at $129 daily and $97 on sale, he said.The top end, from suppliers such as Sauder Foremost, Affordable and Royal Creations, generates $150 to $175 retails that discounters are eying for more movement later this year.Howell believes "the future of the oil and gas business is great, no matter how it may currently be viewed.' Although he expects the price of crude oil will drop further in the future, he says, "I can't think of any better time to be in the exploration business than right now.' Costs of land and drilling are down, he says, and "philosophically, I think there's more money to be made in bad times than in good if someone is willing to take the risks.'To capitalize on that, Caldor, K mart and Gold Circle are among chains expanding or considering added footage for lifestyle furniture.Furniture that serves consumers' home-based electronics and business needs will be category focal points at many chains. Action will include the introduction of many trade-ups to better-laid veneers, and more finely detailed and stylized merchandise, buyers from Caldor, K mart, T.G. & Y., Gold Circle, Clover and S. E. Nichols told DSN.That year Howell Petroleum paid $3.5 million to the federal government for drilling rights at Main Pass Block 64, an offshore quadrant 20 miles east of the Mississippi delta. "Fortunately, the first hole was a discovery well,' Howell says. The site now produces more than 2,700 barrels daily.How was the book received?Caldor expects to outpace second half 1984 furniture sales by 100% once it doubles footage to 1,500 sq. ft. in each store Aug. 1, and deepens its assortments of wall units (at $100-plus), dining tables, seating and home office groupings, said Carl Weinberger, group merchandise manager, home lines.Howell Petroleum remains the most exciting, and risky, of the four wholly owned subsidiaries. (Besides the petroleum exploration unit and the hydrocarbon company, the parent firm owns the Howell Crude Oil Company and Lake Coal Company, a cluster of southeastern Kentucky mines.) Howell admits it takes luck to find oil. In 1981 he got especially lucky.In 1960 Howell bought a second refinery in Corpus Christi, but he had learned that "refining was more personally satisfying than it was profitable.' So he began converting the refining operations to production of specialty hydrocarbons. Today Howell Hydrocarbons, Inc., the most specialized refinery operation in the United States, is one of four wholly owned subsidiaries of the parent Howell Corporation.Howell worries about American banks going broke if the Third World cancels its debts to them, about Saudi Arabia cashing in its $60 billion in U.S. Treasury notes and bringing down the American economic system, about the ever-increasing magnitude of the U.S. national debt.For Howell, 1969 became a memorable year. He retired from the Navy Reserve as a rear admiral, and he took Howell Corporation public. Eager to begin oil and gas exploration, he formed a second subsidiary, the publicly owned Howell Petroleum Corporation.Howell and his family own 57 percent of the corporation. He has four children, all sons. Two have chosen not to come into the company, opting instead to run their own real estate businesses. A third is working his way up in the corporation, and the oldest, Steven, 36, was elected president in April after 10 years of corporate service.The 263 employes do not view their boss as a Scrooge, however. Refinery workers and their families, for example, look forward to Howell's Christmas party, an annual company highlight at which the management generously distributes service and safety awards as well as substantial bonuses."We're concentrating on small items because of space constraints, and $20 to $30 price points to generate high turns on imports that provide 40%-plus margins," Cashman said. Ladder-back and Breuer chairs at $39 to $49 will also be part of K mart's limited furniture assortment. "We're attacking specific sales opportunities, not going after a fashion concept because we have too little space"The better features on entertainment centers--which are generally 4 ft. wide, 16 in. to 18 in. deep and from 3 ft. to 5 ft. high--include rear holes or channels to conceal wires, rounded edges, wood or brass handles and pull-out shelves for videocassette recorders."We don't know that we can sell home office groupings or a total fashion concept, but we'll try," he said.Because few chains have space to devote expansive layouts to the furniture category or deviate from the traditional display of merchandise on platforms with boxed stock below, discounters are aiming to inject lifestyle appeal in their flyers and store signage. T.G. & Y. is developing 7-in. x 11-in. signs that show "furniture in action, such as a desk with a computer on it to address an immediate consumer need, or wall units with books on shelves to romance it a little," said home furnishings buyer Tony Rivezzo. The chain has started portraying furniture that way in its flyers, he added, noting that "when we advertise a microwave oven, we almost always show it on a sale-priced cart in the ad."Such entertainment centers are the single hottest kd item today, said buyers, who are widely trying to trade customers up from the $100 promotional unit.
Howell and his family own 57 percent of the corporation. He has four children, all sons. Two have chosen not to come into the company, opting instead to run their own real estate businesses. A third is working his way up in the corporation, and the oldest, Steven, 36, was elected president in April after 10 years of corporate service.
Author: Del Marth
