Colorado Business Hall of Fame: Jake Jabs
While some of his competitors have gone out of business during the tough economic climate of the past few years, Jake Jabs has expanded his American Furniture Warehouse empire to 13, with new stores open or under way in Grand Junction and Colorado Springs.
The company - long known for its founder's homespun TV ads - had estimated sales of furniture, bedding and accessories in 2010 of $300 million, up from $297 million in 2009, according to the trade publication, Furniture Today.
Sitting in his office at his corporate headquarters in Centennial, located inside one of his furniture warehouse stores, Jabs talked about some of the moves he had to make to keep his company lean, including getting rid of a 50-person online division in 2008.
"We were shipping a lamp to New Jersey. We were shipping a bedroom set to Houston. And it just wasn't working very well," said Jabs, citing the high cost of doing business. "The trouble with shipping a lamp to New Jersey is if there is something wrong with the lamp (the customer) just stops making payment on their Visa, and you got a lamp in New Jersey. What do you do with a lamp in New Jersey? You throw it in the garbage."
Jabs retooled American Furniture Warehouse's online sales practices to align with where the company's trucks make deliveries. It's the kind of adjustment you make when declining sales force you to rethink everything you do.
But recessionary times also have been kind to Jabs: Colorado's largest furniture retailer got its start during the 1975 recession. Jabs says he's made some of the best deals of his life during economic downturns.
"I negotiated with the old American (Furniture Co.), which had gone out of business. They were just trying to get something out of their assets, their forklifts and their trucks and warehouse racks," Jabs said. "It was on their books for a million and half dollars, and I gave them $80,000 cash. They were worth something to me because I was going to use them ... I figured I made a million bucks that day."
Jabs, whose wife, Ann, died in May, has no plans to retire. Running his privately held company keeps him interested and occupied. His work regimen includes selecting furniture from catalogs and making twice-annual treks to Asia to examine the latest offerings.
"I think most people are happier working," Jabs said. "You're productive. You're contributing something to society."
In late 2010, Montana State University announced that Jabs would give more than $3 million to the school's College of Business, and late last year announced he would give $25 million for a new business building. Jabs, who grew up in a small town in Montana, will be the namesake of the Jake Jabs Center for Entrepreneurship for the New West.
Such philanthropy is not unusual for Jabs. American Furniture Warehouse and its employees give more than $2 million to local charities annually. Project C.U.R.E.'s warehouse in Centennial was paid for with $2 million raised through Jabs, who agreed to donate $1 million if the nonprofit - which collects medical equipment and transports it to developing nations - could match $1 million through other donors.
"The thing that is so magic about Jake Jabs is that he decided he was going to give back to his community, and his footprint is international," said Doug Jackson, president and CEO of Project C.U.R.E. "He's truly global in his approach. He is viscerally, gut-wise, one of the smartest guys I've ever met in business."