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Future 49ers: Bailey’s Furniture & Sourdough Express

Oct 17, 2022Magazine, Retail, Transportation

Kerry Tasker

Among the companies that barely missed the Top 49ers ranks this year, two are long-established, family-owned dynasties. Bailey’s Furniture and Sourdough Express are currently waiting in the wings, but they could easily take the stage, sooner or later.

If the politics of 1958 had played out slightly differently and Alaska statehood was delayed by six months or so, Hawaii would have laid claim to the 49th star on the US flag. As the fiftieth state, Alaska would ascribe special significance to that number instead, and thus our annual list of top companies by revenue would have room for one more entry.

But history played out as it did, so the ranks are closed at forty-nine. Inevitably, some businesses don’t make the list—including those that have easily landed on it previously, as the bottom line continues to climb year after year.

Among the companies that just barely missed the mark this year, there are two that have yet to land on the list—but show incredible potential. Both are long-established, family-owned dynasties. One is a Best of Alaska Business winner for Best Furniture Store in Alaska. The other ranked #82 on this year’s Corporate 100, with more Alaska employees than such 49er stalwarts as Usibelli Coal Mine or Anchorage Chrysler Dodge Center.

Bailey’s Furniture and Sourdough Express are currently waiting in the wings. Here are the reasons why they could easily take the stage, sooner or later.

Family Business

Ron Bailey launched his used furniture store in January 1990. “I started the store by accident,” he says. “I went to an auction and bought a dining room set without asking my wife. When she didn’t like it, I put an ad in the paper and got thirty phone calls and ended up making twice what I had paid for it. I took that money and went and bought two more sets and did the same thing—and the business was born.”

Originally called A-1 Discount Furniture, Bailey eventually began dealing new furniture. “I finally figured out there wasn’t enough used furniture in Alaska to meet the demand,” Bailey says. “Alaska is separate from the rest of the United States, and there aren’t enough people hauling used furniture up here.”

So Bailey went to the Seattle furniture market and bought four shipping containers of new items. “I had used furniture on one side of the shop and new on the other,” he says. “I let people choose what they wanted, and they really enjoyed having that choice.” As time went on, Bailey realized it was easier to buy new furniture than it was to buy used pieces. He opened a store in Wasilla in his third year in business; five years later he opened a store in Soldotna, and five years later a store in Fairbanks.

Anchorage remains the headquarters, with the largest furniture showroom in the state. “In 2005, we took the biggest risk of our lives and built a 150,000-square-foot building with a huge warehouse,” Bailey says.

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That building is the pride of Bailey’s Furniture, with a two-story waterfall, a kids’ play area, a Subway sandwich shop, planes hanging from the ceiling, and almost 700 cookie jars lining the top of the walls that divide each section of the store. “I lost 125 cookie jars two years ago in an earthquake,” he says. “I knew where every one of those jars came from.”

Sourdough Express, the oldest transportation company in Alaska, was bought by the Schlotfeldt/Gregory family in 1923. Josh Norum is the fifth generation of his family to be involved in running the company. He runs it with his mother, Debbie, who is the majority shareholder. “We’re an Alaskan family-owned company, and we plan to stay that way,” says Norum.

Norum’s great-granduncle bought the company when it moved to Fairbanks, and he sold it to Norum’s great-grandfather and great-grandmother. Sourdough Express expanded throughout the ‘60s and ‘70s along with oil production at Prudhoe Bay. “That was a big milestone for us,” he says. “The company grew significantly in a short period of time.”

The semi-trailer had just been invented in 1898 when Sourdough Express was founded, so dog sleds and horse-drawn wagons hauled supplies for prospectors out of Dawson City, Yukon.

Sourdough Express

Norum’s great-grandfather sold the company to his grandparents in the ‘70s, and from there it eventually moved down through the family to the fourth generation and then to Josh and his mother. Over the years, the company has transitioned from servicing the oil fields to a full-service moving and storage company with about 160 employees and 120 vehicles.

“There have been a few recessions, so we looked at our business model and got into transporting groceries and supplies. Even when there’s a recession, people still need food and they still work on their houses,” says Norum. “Amazon has also been big business.”

Success Factors

Bailey’s Furniture has changed with the times. Bailey has a sort of sixth sense about what would be good for his company. He hears what buyers want, and he listens.

“I think my wife and I are good buyers,” he says. “I’ve always been good at picking out what people like. I’d go down to the Lower 48 on vacations and walk through every furniture store I could find, and all the time I saw the same things I was putting in my store. I’ve been able to do that for thirty years.”

Bailey also credits his company’s success to his honest work ethic. “There was a need for someone like us. I never gouged anyone,” says Bailey. “We have really good quality furniture and really good prices. Customers always got a good deal.” He says that other stores carried all name brands with high prices, and when they marked their prices down, they still came in 40 percent above his prices. “And we’re still the lowest prices in Alaska.”

Finally, Bailey says consistency in advertising has been a big part of the company’s success. When his son, Buddy, was seven years old, a television company offered two weeks of free advertising in a bid to get the store’s business. Bailey had his son sit in a desk chair and smile into the camera. “The commercial ran for two weeks, and we were covered in people,” Ron Bailey recalls, “so we bought time and Buddy did the next commercial with a few lines, and he’s still doing them today. He’s almost as famous as Sarah Palin in Alaska.” For thirty years, Buddy Bailey has been the face of his family’s company.

Sourdough Express shares a similar ethos. “We’ve always been a family-oriented company. We focus heavily on our employees and what they have going on in their lives,” Norum says. “By doing that, we feel that our drivers have a lot of loyalty to the company.”

Norum also believes the decisions Sourdough Express has made have made it a successful business. “We’ve made good, safe decisions over time when the economy has gone up and down,” he says. “We’ve grown smartly and continued to stay financially viable. We haven’t overextended or taken on too much at one time.”

Challenges

Sourdough Express hauled the bulk of supplies for building the Trans Alaska Pipeline System, and in 1994 its freight division expanded from the Interior to Southcentral.

Sourdough Express

Sales flourished for Bailey’s Furniture during the COVID-19 pandemic. Part of that was due to demand, but Bailey also credits good relationships with his suppliers. “A lot of our vendors gave me lonely or orphan containers, so I was able to buy a lot and had lots to sell when my competitors didn’t.” In fact, the company set a sales record in 2020, bested by 2021.

In recent years, the largest challenge for Bailey’s has been staffing. That’s no different than any other shop, Bailey notes. “Our tourism is crazy, and we had three lodges that couldn’t open because they couldn’t get people to open the doors and clean the rooms,” he says. “School just started, and there aren’t enough bus drivers to pick up the kids. It’s crazy.”

While COVID-19 was a challenge for Sourdough Express in terms of shuffling drivers if someone got sick, Norum says contingency plans allowed the company to service its customers without interruption. “Through Covid our company got stronger,” says Norum. “Driving a truck is an individual task, so we wouldn’t put people together if we could help it. We accomplished a lot, and we’re very proud we were able to stay in business during that time with very little impact to customers.”

Strategic Growth

New for Bailey’s Furniture is a revamped website, which went live in February 2022. Ron Bailey figures this will help the company continue to grow, especially in areas far from physical showrooms.

“We’re in all the major cities in Alaska, and we serve all the Bush communities. Everything they need gets flown out in an airplane.” That means the company advertises to those communities, takes their purchases online, wraps the purchases, and takes them to the airport to be flown for delivery.

“The future is being consistent, being a good place to work where people enjoy their work,” says Bailey. “That’s what we try to do every day, treat everyone like they want to be treated.” It’s these values that helped Bailey’s Furniture grow its earnings from $28 million in 2018 to $44 million in 2021, or 19 percent average annual growth—despite the worldwide pandemic.

Sourdough Express is satisfied with more modest, consistent growth. “Every year we probably grow the company between 2 and 5 percent,” says Norum. “We’re strategic about the equipment we buy and the customers we choose to work with. We don’t want to overpromise.”

The company’s growth rate has been steady since the ‘90s, he says. “At the end of the day, it’s taking on more customers and building our equipment fleet and driver pool in a way that gives everyone the same level of service,” Norum says. “We don’t want to be the biggest transportation company in Alaska. We want to be the best one.”