TORONTO, Canada — Joanne Fabrics Inc., the 33-year-old Canadian fabrics wholesaler, is reaping the benefits of a bullish attitude from its founder Bernie Hovesen and his plans to construct a 25,000 square-foot-addition to the company’s automated ‘smart’ warehouse in Oakville.

“Business is up double digits for us,” said Hovesen. “There is plenty of growth left for us in the U.S. market alone. We want to get into new products like hardware which can drive the fabrics business.”

Currently, Joanne Fabrics ranks among the top Canadian-based wholesalers and attributes much of its success to customer service and affordable products, many of which retail at $50 to $75.

“We never had a year when we didn’t grow,” said Hovesen. “If we don’t have 10 yards of a specific product on our shelves, the designer will find somewhere else to buy it.”

Joanne Fabrics carries 20,000 sku’s on-site and more will be coming to fill an expanded 55,000 square-foot warehouse that boasts 30-foot ceilings. Hovesen has been at the helm of Joanne Fabrics since he founded the company in 1977 with his wife, Joanne, for whom the company is named. He is a graduate of the La France Velvet Woodstock plant in Ontario where he began working in 1965.

As part of the expansion process with growing the business through the recession, Hovesen is determined to pass the management baton to Shelley Hovesen-Camilleri, 38, and Kimberley Hovesen-Krasa, 35, his two dynamic daughters who have been a part of the business since a young age and are now being groomed to run it. Hovesen-Krasa handles internal operations including oversight of the warehouse expansion. She is aware of every detail of the construction, including the new Cardex vertical lifting systems that will be installed to expand the warehouse to 30-foot ceilings and expects to spend approximately $700,000 on automated warehouse equipment this year.

According to Hovesen-Krasa, the ability to bring finials, brackets, and endcaps to the shipping area in 15 minutes is crucial to becoming successful in hardware. She is a graduate of the University of Western Ontario and received her MBA from McMasters University in Ontario, and her father is quick to note that “she made the dean’s list.”

Hovesen-Camilleri focuses on design, merchandising, and marketing. She studied interior design at Fanshawe College in London, Ontario and received her business degree from Sheridan College in Ontario. Her ascension to the ranks of Joanne Fabrics came with an early penchant for sales as she was awarded Salesperson of the Year in her second year. She is an avid golfer as well, having recently sunk two birdies on a course she often plays with her father. Between the two sisters, they have five children and one has already been spotted walking around his grandfather’s offices.

The company is transitioning with a good balance of family and trusted colleagues, as Hovesen is stressing the importance of mutual respect among his children and the existing managers of the firm, including Don Cranstoun, vice president of contract sales, and Anthony ten Kortenaar, vice president of the U.S. marketing division.

With the girls on track to carry the torch, Hovesen is spending time living up to his nickname, “Birdie.” Recently, he has been golfing at the Mississauga Club, where he recently sank four consecutive birdies in a round of 76. When he’s not in Canada, he can be found on courses in Sarasota, Florida or offshore on his Sea Ray boat. But “Birdie” isn’t all about golf and boats. At 63-years-old, he is still very much involved in the business. His vendors, with whom he works diligently to keep clients happy, consider him a sharp businessman with quick wits and deep-rooted experience, and credit him with always being accessible through a Blackberry®.

“I don’t know what the industry will look like coming out of the recession,” said Hovesen. “I am more concerned about running a profitable business than with being the biggest and just selling volume. We don’t buy every new fabric that comes along. We’re more concerned about the quality of the vendor overall and with being a reputable buyer. When you live in a world that’s changing every hour, three-fourths of a million disappears on a typical sample program in no time. One has to know how to service the customer with an investment on the line with every new collection.”

Between its U.S. brand name of JF Fabrics and the Joanne Fabrics name more widely used outside of the American market, the company unveils a new collection every two months.

“Our sales people always have something new to show the designer,” Hovesen said.

The lines are sold by 35 road salesmen and through 35 independent showrooms. Showroom sales are increasing this year and are not showing signs of slowing. Joanne Fabrics is looking to increase its presence by increasing its number of showrooms to 70. Residential is the bulk of Joanne’s business but hospitality represents a growing area of the company, currently at 30-percent of sales; 90-percent of Joanne’s business is in North America, and 50-percent of its business comes specifically from the U.S. By contrast, the U.S. accounted for only 20-percent of its sales 10 years ago. Presently, the company also has 10-percent of its business overseas in Hong Kong, Australia, Dubai, and Shanghai.

“As part of its sales efforts, Joanne fields 800 calls per day in its 15,000 square-foot Oakville suburban offices and handles each call in eight seconds on average,” said Hovesen-Krasa. “It can deliver the cut from the shelf to the loading dock in 15 minutes. Everything ordered by 3P.M. is out of the house the same day.”

“We work through reliable partners throughout the world,” said Hovesen. “Quality is a problem with Chinese goods. We don’t want our own people on the ground in China so we work through a reliable partner who deals with Chinese goods as well as those from Pakistan, India, and Turkey. The biggest problem for us today is on the supply side of the fabrics business.”

Joanne wants reliable suppliers but is understandably cautious about vetting new ones. Typically, Joanne Fabrics has 150 sku collections in one book provided by one or two suppliers.

“Joanne’s suppliers are hard to come by,” said Hovesen. “There are a diminishing number of good suppliers in the business today. There is an oversupply of product and China tilted the balance further. We’re not interested in a supplier with only one product to offer. We need to maintain product lines for at least four years to our customers. We need reliable delivery dates no matter how far out they might be. We expect our vendors to deliver on the dates
promised. We prefer one piece minimums on orders and will pay the up-charge for this service because it means we will not have as many ‘clear outs’ when the line is cancelled. We’ll consider bigger orders from a vendor if we can have the exclusive on the item.”

According to Hovesen, Joanne Fabrics prides itself on longstanding business relationships with companies that understand his priority for clients and quality products.

“Our doors are always open but we must align ourselves with partners who understand our philosophy,” Hovesen said. “Customer service comes first and foremost. We drive our suppliers crazy to ensure quality control and expect quick resolution when there are problems; but that’s why we have these relationships.”

Hovesen is careful in choosing business partners because he understands the dangers in producing more than a vendor can afford.

“We can’t afford to put out 4,000 sample books and then find out that one vendor is pulling 20 products off the market or going broke,” said Hovesen. “It renders the book useless to us. We can’t tell the customer the products have been can- celled. They’ll throw the books out. That’s why we are so careful about choosing business partners. Of course, we want our vendors to make money too.”

The sisters will travel with their father to MoOD this year to meet existing suppliers and to keep an eye peeled for new opportunities.

“We are always shopping for new partners if we see a future in the products and service,” said Hovesen-Camilleri. “Dad always taught us that the future of this business is in building good relationships.”