Leon's Furniture Profile
Leon's Furniture Limited operates as a retailer of home furnishings, mattresses, appliances and electronics across Canada.
The company operates through two segments, Leon’s and The Brick. Leon’s franchisees operate principally as independent owners. The company issues insurance contracts through its subsidiaries, such as Trans Global Insurance Company and Trans Global Life Insurance Company.
The company also operates as a commercial retailer of appliances to builders, developers, hotels and property management companies through its Midnorthern Appliance banner alongside with the Appliance Canada banner. The company’s retail banners also include Leon’s, The Brick, Brick Outlet and The Brick Mattress Store.
The company owns a chain of retail furniture stores operating as Leon’s Furniture and stores operating as The Brick. These stores offer a full complement of value-priced, quality brand name and private label household furniture, home electronics, home office products, appliances and mattresses manufactured and supplied by well-known manufacturers. In addition, the company operates stores branded as The Brick Outlet. The Brick Outlet features the full Brick lineup plus special buys, last chance discontinued, one-of-a-kind and clearance products.
The Brick Mattress Store offers specialty mattress locations, which carry extended product lines over and above those typically carried at The Brick locations. It is designed to compete with independent national bedding chains and features mid to high end product lines, including national brands and exclusive specialty products.
The company operates showrooms in the province of Ontario, under the banner Appliance Canada, which sell higher end appliances, electronics, and mattresses to the public.
The company has franchise groups operating franchised Leon’s Furniture stores, which tend to be in smaller centres. Under the terms of each store’s respective franchise agreement, the franchisee is required to pay a franchise fee and royalties for each franchise for the use of the Leon’s name and marketing support services.
The company has entered into franchise arrangements with independent stores and entrepreneurs seeking to utilize the warehousing, systems, brand recognition, purchasing power, and advertising that Brick stores enjoy, enabling the Corporation to reach smaller markets. Revenue is earned in the form of an initial franchise fee, margin on product sold through the franchisee, and on-going royalty payments.
The company operates ecommerce sites, such as leons.ca, thebrick.com, and furniture.ca. The company’s repair service division, Trans Global Services (TGS), provides household furniture, electronics and appliance repair services to its customers. TGS has contracts to support several manufacturers’ warranty service work in addition to servicing a number of individual programs offered by other dealers. This division also performs work for products sold with extended warranties and is an integral part of the retail offering.
The company has foreign assets or operations in China, Malaysia, Taiwan and Vietnam, through its wholly owned subsidiaries, First Oceans Trading Corporation, First Oceans Hong Kong Limited and First Oceans Shanghai Limited (collectively called First Oceans). These operations relate to the company’s import program for sourcing products from Asia for resale in Canada through its retail operations.
The company also has foreign operations in the Caribbean, through its wholly owned subsidiary, King & State Limited. These operations relate to the company’s retail banners that sell their extended warranties on appliances and electronics to their customers.
Credit Services
The company uses third party finance companies to provide its customers with a broad range of financing options for their purchases. Financing is a popular vehicle by which customers purchase furniture, electronics and appliances. The company continues to work with these companies in order to provide available credit, better finance options and preferred rates.
Intangible Properties
The company is the owner of numerous registered Canadian trademarks, including BRICK, THE BRICK, URBAN BRICK, THE BRICK WAREHOUSE, MIDNORTHERN APPLIANCES and UNITED FURNITURE WAREHOUSE, LEON’S, APPLIANCE CANADA, DON’T PAY A CENT EVENT, and NO MONEY MIRACLE, some of which are licensed to franchisees and the company’s third party credit providers.
Real Estate
The company’s real estate portfolio dedicated to The Brick relating to its distribution facilities. The company’s real estate portfolio dedicated to Leon’s relating to retail operations. The company’s real estate portfolio dedicated to the LFL Group consisted of the Shared Services distribution centre in Delta, B.C. This facility services both Leon’s and The Brick stores.
Seasonality
The company’s profitability is lower in the first half of the year (year ended December 2020), since retail sales are higher in the third and fourth quarters.
Competitors
The most notable brick and mortar competitors in the Canadian retail household furniture, mattress, appliance and home electronics industry include Home Depot, Ashley, Rona, The Bay, Lowes and Brault et Martineau. Additionally, specialty retailers, such as Ikea, Sleep Country and Best Buy also compete with the company in their respective markets. Online competition is also becoming a larger sector of the industry. In addition to their bricks and mortar retail locations, many of the above-noted competitors also offer customers the opportunity to purchase online. Some other competitors, such as Wayfair sell exclusively online.
History
Leon’s Furniture Limited was founded in 1909. The company was incorporated by the Articles of Incorporation under the Business Corporations Act in 1969.
