Bad Boy Makes Good Lastmans BLAYNE LASTMAN

Nooobody sells
furniture quite
like Bad Boy.


Blayne Lastman may always be remembered as the man who brought Bill and Hillary Clinton to Scarborough to sell furniture. Not the .Clintons, of course, but a look-alike couple who appeared in newspaper and TV ads promoting his Bad Boy Furniture & Appliances Warehouse Ltd. Little did Lastman know that his stunt would ruffle feathers at the White House, generate a goldmine of publicity and confirm his self-imposed title as the bad boy of Canadian retail.

A month after Lastman hired a presidential double to sell sofas and dining room sets in his late-night TV ads, a letter arrived from the White House asking him to cease and desist unauthorized use of the president's image. Lastman's response? A cheeky new series of ads that also featured a bogus First Lady. "Last time I checked," says Lastman, "this was Canada, not the 51st state."

White House Letter
Click Above To See a Legible Version of the White House Letter

It's that kind of spunk, along with a penchant for outrageous promotions, that has driven the success of Bad Boy. Whether it's his in-your-face ads or in-store extravaganzas with superstar wrestlers, Lastman's aim is to stand out from the crowd. Although best known for his bizarre TV appearances as a nerdy character dressed in prison stripes, underneath that public persona lies a savvy and innovative marketer who's selling millions of dollars in furniture to a carefully-targeted niche.

Of course it doesn't hurt that the Lastman name itself turns heads in Toronto. Blayne's father is the flamboyant Mel Lastman, mayor of suburban North York. After 23 years in office, the Guinness Book of Records. considers Mel the longest-running mayor ever. Moreover, Bad Boy was the name of the Ontario-wide furniture and appliance chain Mel launched as a hungry entrepreneur himself 40 years ago.

The Lastmans have a bent for colorful promotions, but in private the 34-year-old Blayne bears little resemblance to the manic jailbird he plays in commercials. Pleasant, quiet, even a little modest, he's an experienced businessman given to making decisions based on intuition and business smarts. He was so confident in his ability to succeed that he gave up a lucrative job and defied the advice of experts - including Dad - to launch Bad Boy in 1991, in the midst of the worst recession in most people's memory. "I can't explain it," says Lastman. "I just knew the time was right." Four years later, his confidence has been rewarded. Bad Boy's two Toronto-area stores ring up annual sales of $25 million.

Lastman's strategy was simple: he would offer customers both "the sizzle and the steak." He would attract customers with eye-opening promotions and then sell them old-fashioned price and service. "It's the 'field of dreams' theory," he explains, as if it were easy. "Give the right prices and the right merchandise, and the people will come."

That anyone is coming in to Bad Boy at all is all the more remarkable given the overall state of the furniture and appliance industry. Retail consultant Len Kubas of Toronto's Kubas Consultants says the declining housing market has dampened activity in big-ticket items. "It's meant anyone selling furniture has to be far more aggressive and creative." But the secret lies in knowing who your customers are and how to reach them. And Kubas says Lastman is a master at reaching his target market - blue collar workers. Lastman's aim was to capture a mass audience that looks for comfortable, affordable furniture and easy terms to boot.

It's the same market his father went after with the original store. Under Mel's guiding hand, Bad Boy became a fixture on the Toronto landscape for more than twenty years. The senior Lastman was also famous for offering customers $2 bills for $1 or walking down Yonge St. in a mini-skirt. The chain eventually grew to include 45 stores throughout southern Ontario. But in 1975, choosing to concentrate on politics, Lastman sold the chain to a consortium of companies, including retailer Factory Carpet - which would run the chain - and the Toronto Dominion Bank. Some 11 months later, Bad Boy was bankrupt. Mel Lastman insists Bad Boy was sound when he sold out, and blames its demise on mismanagement: "You can't sell furniture and appliances the same way you sell broadloom."

Although Blayne was just 14 when his father sold Bad Boy, he was already bitten by the retail bug. "I hung out at the store, walked around with Dad, attended sales," he says. "It was a very, very exciting company." Long after it sold, Blayne knew he wanted to bring it back.

Indeed, furniture seems to run in the family. After graduating from Toronto's York University with a degree in economics, Blayne intended to pursue his MBA. He was sidetracked when Toronto furniture manufacturer King Koil Ltd. offered him a job selling its products on the road in southern Ontario. A year later, he left to become an independent manufacturer's rep, selling furniture for seven companies. Although he was earning in excess of $350,000 a year, Lastman says he never enjoyed the road, and retail remained his first love.

Lastman had toyed with the idea of reviving Bad Boy since university. But the timing wasn't right and, ironically, Canada's largest furniture warehouse, The Brick, had acquired the rights to the Bad Boy name. But The Brick never used it, and after waiting the required seven years Lastman picked it up once again. He and two long-time friends put up $500,000 to launch Bad Boy in November, 1991. They figured their passion could beat the recession. "We believed the name was strong, we believed that our drive and hunger was greater than anyone else's, and that we'd succeed," says Lastman. "We believed that our marketing was going to work."

Not everyone was so optimistic. Although he was distraught when Bad Boy originally went under - to the point where he even tried to buy it back - Mel Lastman was on of the first to question his son's desire to revive the chain. "I thought he was totally out of his mind," says Mel. "He was making good money and the economy was horrible. I said, 'Blayne, not now'."

Despite his initial reluctance, Mel Lastman remains one of Blayne's biggest supporters. Indeed, political foes have been quick to criticize His Worship's appearances in Bad Boy ads. For his part, Mel says his cameos are nothing more than a father helping a son. And to the critics? "I say, 'screw you'," declares Lastman. "I help people all the time. I'd never helped my son before. I don't want to look back someday and wish I'd helped him."

Blayne Lastman
Blayne Lastman, President of Bad Boy Furniture & Appliances Ltd.

Once his store opened, along a crowded furniture strip in suburban Scarborough, Blayne set out to tell the world. To go head-to-head with furniture retailing giants such as The Brick and Leon's, he says, "It's was very important not to look small-time." His strategy was to take his "one store and make it look like 100."

To do that, he launched a series of advertisements on radio and TV, and took out double-page spreads inThe Toronto Sun. - the archetypal blue-collar medium. Unable to afford prime-time space, he set out to monopolize fringe airtime - day time and late night. He secured reduced rates for 52-week contracts, and his quirky ads now run continuously during the day and through the night. His year-long contract also entitles him to bonus airtime, which he claims during prime time. "We owned fringe time," Lastman declares. "We knew we couldn't compete with the giants, so we had to be innovative. We had to be different."

The bad boy has never looked back. In 1992 he and partner Marvin Kirsh bought out their third partner. The two also opened a second store across town, which Kirsh oversees, and a central distribution warehouse. And the store's breathless slogan, "Who's better than Bad Boy? Nooobody!" has taken on a life of its own. Indeed, you'd be hard-pressed to find any Torontonian who couldn't repeat the Bad Boy mantra. Lastman credits his dad for the concept. Blayne had been searching for a memorable slogan. Six months before opening Bad Boy, he got a late-night call from Mel, who was vacationing in Florida. "I've got it," said his father. "Nooobody. With three Os. Not with one, not with two, but three Os. It's going to work. It's fantastic." It was crazy, Blayne admits, but his gut told him it could work. "I believed we could make the "Nooobody" into the biggest thing," says Lastman. "And it got bigger than I could have ever imagined."

In rapid succession came a string of ads and celebrity promotions. Along with the Clintons, Lastman has co-opted Toronto Maple Leafs coach Pat Burns and Dick Assman, the Saskatchewan gas station owner who found instant - albeit - brief - celebrity last summer when late-night TV host David Letterman fell in love with his name. Each has been recruited for ads and in-store appearances. "Assman was amazing," says Lastman. "You'd have thought the Queen was arriving at Bad Boy." And when 3,000 people lined up around the block for an autograph session with World Wrestling Federation superstar Razor Ramone, Lastman says his employees spent more time acting as security guards than selling furniture. Still, Ramone's two-hour appearance at Bad Boy boosted sales that day by 30%.

Tim Waters
Tim Waters plays the Sax for the crowds.

But it was the Bill Clinton promotion - and the ensuing brouhaha - that got people talking. Lastman had caught presidential look-alike Tim Waters on TV. "Something just clicked," he says. "I saw him on Geraldo on Friday, spoke to his agent on Monday. On Thursday we flew him up here from Tampa to shoot the commercials, and he went home on Friday." The bogus Clinton uttered only one word in the spot - "Nooobody!", naturally - but a month later Lastman received the warning from the White House. Lastman's reaction? "I saw heaven for the first time." The Toronto Sun. published the story on the front page the next day, and Lastman, knowing an opportunity when he saw it, responded with a series of ads featuring both Bill and Hillary look-alikes. "The media attention that followed was almost overwhelming," Lastman says. He found himself fielding calls from newspapers and TV stations around the world, including the CBC, The Wall Street Journal, Dateline NBC, and Entertainment Tonight. "All of a sudden we became a national company," says Lastman. The next month, sales rose 40%. And Bad Boy is still reaping the rewards. "People still mention the Clintons," says Lastman. "The Clintons brought this company millions and millions of dollars worth of business."

Tim Waters and Elaine Kouba
Tim Waters, Blayne Lastman, and Elaine Kouba

And the promotions keep coming. Last Thanksgiving, Lastman gave away free turkeys to the first 100 people into the store. Month-long extravaganzas in conjunction with the likes of Pizza Pizza and grocery giant Loblaws feature in-store giveaways such as $50 gift certificates or free pizzas for a year to customers. The cost to Bad Boy is minimal, says Lastman, because he uses his booked airtime to cross-promote these products. "People think we're nuts. But the cash registers are ringing."

All told, Bad Boy spends close to $1 million a year on marketing. Lastman works with a home-based advertising consultant on all of Bad Boy's print and TV spots. Using freelance camera operators, he says, helps keep production costs to a minimum. Bad Boy spends just $2,000 to $3,500 to create each spot.

Blayne himself is behind all of the hype and hoopla at Bad Boy. He's an ideas man who also relates well to people. Mel calls his son a "natural communicator." Blayne believes his knack for knowing what touches his customers comes from spending seven days a week at Bad Boy, overseeing everything from marketing to buying to selling. "If you've got a pulse, if you're on that floor, if you're involved, your gut will tell you everything you need to know."

Promotions aside, Lastman says his edge is twofold: his hands-on management style and the strength of the Bad Boy name. "We can be so flexible. We can react in seconds. I can make decisions quickly because I'm hands-on." he says. "The advertising, the marketing, the buying will always be hands-on." In addition, he says, people know and respect the Bad Boy name. "We're that old family friend. They know us, they like us and they trust us."

Once he gets customers in the store, Lastman hits them with the "steak": low prices and bend-over-backward service. Mel Lastman says his son won't let anyone out of the store without buying something. And Bad Boy's inventory turnover, at nine times a year, or about three time the industry average, seems to confirm that.

Bad Boy advertises the lowest prices in Canada and the U.S. To defend that claim, Lastman has employees checking competitors' prices daily. He says his lower prices reflect his negotiating abilities with his suppliers. That plus the fact that "we are giving manufacturers $2-million orders." Issie Rose, sales manager for Mississauga, Ont.'s Edgewood Furniture Ltd., has sold its couches and sofa beds to both generations of Bad Boys. Rose says he's always had a positive and productive relationship with Lastman. "His word is his bond," he says. "When he places an order, it belongs to him."

If customers find Bad Boy's prices too high, Lastman will always negotiate. "If a customer comes in and makes a reasonable offer, we'll take it." A salesman starts every sale but a closer - usually a manager - sees it through to its final stage. "Whether it's price, delivery, or hauling away a customer's old furniture," says Lastman, "whatever it is we'll do it to make the sale." He says it's a system unique to Bad Boy, although it's adopted from his father's days. Lastman says he's found that a new face is usually able to close the deal, probably because a closer has the authority to reduce price or haggle over other conditions.

Still, "price is the easy part," Lastman says. He believes the store's hallmark is its knowledgeable staff, so service is something he hammers into his employees seven days a week. Staff train for three months at Bad Boys's central warehouse learning about products, pricing and customer service. They also attend product knowledge meetings each morning, and visit manufacturers' premises at least twice a month. Still, Lastman admits that Bad Boy's first year was dominated by a revolving door for employees. "But now we've got a great team, he says. "People who care about the company almost as much as I do."

In a never-ending quest to stay ahead of the pack, a new series of Bad Boy ads featuring a computer-animated Bad Boy debuted last December. It looks a little like the Pillsbury Doughboy, but Lastman says, "It's unique. Its in tune with the times." The ad coincided with Disney's release ofToy Story., the first full-length computer-animated film. "That's what makes us different from the others."

Despite the industry's lackluster performance, Lastman says his store hasn't felt the pinch. In fact, he claims November and December of 1995 were Bad Boy's best months ever. And he says 1995 profits rose 20% over 1994. With that kind of base, Lastman is charging ahead. He expects to open two new Bad Boy stores in 1996, in Whitby and North York. And within five years he plans to have 10 stores in greater Toronto, five of them franchised. He sees it as a win-win strategy. "Our plan would be to take medium-sized operators, good stable companies, and turn them into Bad Boy superstores."

Despite numerous invitations to take his concept south of the border, Lastman says he has no intention of growing Bad Boy across Canada - or even Ontario. He's content to keep operations in his own back yard - where he knows and understands the market.

But then, he has help. On Saturday afternoons you'll often find Mel Lastman on the floor at Bad Boy, spending time with his son, or walking around chatting up customers. "It was his first love," says Blayne. "He loves the store." Starting the business seems to have paid an unexpected dividend: Blayne believes it's brought him closer to his father. In fact, he won't rule out following his father's footsteps into politics one day. Showbiz is in his blood.




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