Phoenix Outdoor Furniture Company neighbor sees a bright future

PHOENIX, AZ – A trio of Phoenix-based entrepreneurs decided to launch their dream business during the height of the COVID-19 pandemic.

The company in question evolved over time into an outdoor furniture retailer, Neighbor, which was launched by Nick Arambula, Chris Lee and Mike Fretto in 2020.

The company’s creators worked together at mattress company Phoenix, Tuft & Needle, and decided to put their knowledge of the furniture industry to good use by forming Neighbor.

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The neighbor has already enlarged his product selectionwith a new line of outdoor dining tables and chairs, joining the company’s product line, which includes outdoor chairs, loveseats, sofas, sectionals, ottomans and coffee tables .

Patch recently chatted with Arambula about the company’s first year in business and why the trio chose Phoenix as the company’s headquarters.

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Below is a transcript of that conversation, edited for clarity and length:


Q: Could you just walk me through the first question, just the background of the neighbor and how you got started in the first place?

A: So Mike, Chris and I all met, working at another consumer furniture company. And over time, through our entrepreneurial interests, our product interests, and just our working relationships, we grew closer and wanted to explore the possibility of doing something entrepreneurial together.

And I think outdoor furniture was something that spoke to us. In the midst of the pandemic, people were spending time outdoors to escape their homes, which had become something of a gym, a restaurant, a daycare, a job, all the things you used to get away from your house.

And so, we found ourselves coalescing around this idea, of ‘how can we make our outdoor spaces a little more livable.’ To build a great product with very high quality materials and offer it to customers at a price that is a bit more affordable than something comparable would typically be sold for.

Outdoor furniture is something that hadn’t had many new entrants in quite some time. We sought to bring a bit of a different perspective on a category that is typically dominated by national retailers who have treated as a kind of afterthought.

And what I mean by that are brands like Pottery Barn, West Elm, Williams & Sonoma, who usually sell outdoor furniture, but that’s not the main component of their business. They focus on the inside, then the outside is just something they have.

And we really liked the idea of ​​saying we’re going to be an outdoor furniture company and an outdoor furniture company only, and really focus on making great products.

And so that was, I think, where the inspiration came from. And obviously, the pandemic could be a difficult time for many people to start a business. But I think about the fact that most people were at home and investing in their homes. So it was the perfect time for us to start a business like this because there was a high demand for our product in the market.

Q: You have a few new options available [July 1]. Tell me about the new options and how you decided to add them to your collection?

A: The first thing we brought to market was the lounge collection for obvious reasons. We just wanted something that could be ubiquitous in the sense that a lot of people are looking for outdoor sofas and creating what we call their living room outside.

But a natural extension to that was the table, right? People get together, eat out, sit around the table, talk to each other, and create memories with those you love.

And I think it was a natural extension of that first collection. Saying we also want to help someone outfit their outdoor dining area. So when you look at the products, obviously the lines in the material are both correlated and inspired by what we did with the initial collection. It is meant to be an extension of the collection and also create a beautiful visual aesthetic.

And then a chair is, I think, a cool take on the wishbone chair that a lot of people are familiar with. But that’s our take on it and it’s a great piece that will last a very, very long time for customers. Again, this is an excellent FSC certified teak wood.

Q: I know you recently opened a showroom in Phoenix. Explain to me this kind of process and how you decided to open the showroom where you did?

A: I think what’s interesting is that we rented a small office space in Phoenix and, coincidentally, right next to our office, there was a patio of about 600-700 square feet. And so naturally we saw that we were like ‘well, we’re going to build this and put our furniture here and tell people to come and check if they want to.’

And that was inspired in large part by our experience at Tuft & Needle. For me specifically, I started at Tuft & Needle as a retail manager and then helped them grow from one to 10 physical stores, and I think, especially for our price range, it there is a lot to offer the customer to give them a physical space to come and try the product.

[The Neighbor showroom at 515 E Grant Street, #109 opened to the public in mid-March. Appointments are available here.]

Q: Going forward, what is your vision, in terms of the number of showrooms you plan to open, in addition to the one on Grant Street in Phoenix?

A: I think our current view is that we’ll probably stick with this one at least for the foreseeable future. And I think in terms of how fast things are moving, a foreseeable future for us is 12 months.

For now, we want to be cautious and aware of the capital investment it can take to build retail stores.

And so we’ll continue to see how things go in the Phoenix market with this one. And then from there to make a decision whether it behooves us to open more in other key locations in the United States where we see our products resonate.

Q: Why did you choose to keep the operation in Phoenix and what do you think of the small business community in that area?

A: So the three of us live here. Mike and Chris are transplants from other states, Mike has lived here Chris has been a little longer than Mike. I was born and raised here.

So Arizona specifically has a lot of personal meaning to me and it’s the community that helped raise me and it’s a community that I hope to reinvest in as I get older.

But the three of us agreed that Phoenix is ​​in a really unique market, and there’s a pretty employable workforce here that can usually be overlooked by some of the more what I would call the general players communities of startups in the United States – therefore that of San Francisco; or that of New York; the the ; Austin’s.

Phoenix has a lot of really great components for starting a business, the cost of living is a bit lower than the other cities I mentioned. There are three very good institutions in Arizona, one of which is just down the street from our offices.

And I think we’ve had a good experience being members of Tuft & Needle, and watching the company become a local hero here.

We hope to do similar things with Neighbor, strategically. We believe that Phoenix and Arizona as a whole represent somewhat the opposite of the typical weather cycle for the majority of the United States.

However, six months out of the year when most people don’t want to go out in the United States, they like to be out in Phoenix. And so, you know, our research has always told us that outdoor markets can be quite cyclical. And so our thinking was, ‘Well, let’s invest in a market we care about.’

But we think we are a counterbalance to this typical cyclicality. And that will help us grow our presence here in Phoenix and hopefully create a little less of the bumpy sales curve that runs throughout the 12 months of the calendar year.

Q: What would you define as a successful next calendar year now that you have now that we are all hopefully past the pandemic and you have exhibit space and are unveiling new products?

A: We decided this year to be profitable, it was sort of our first objective. And I say that because if you look at the traditional direct-to-consumer startup companies that have been created over the past 10 years, many of them have sought venture capital funding.

And in doing so, they chose or were probably guided, through their investors, to operate unprofitably for a period of time to try to find profitability.

And our view is that this may not be the best model for a direct-to-consumer business. It’s a little harder to say, “Well, we don’t make anything on every sale, but we’ll find it someday.”

You can do that, obviously, on repeat purchase products, like a boxer, or an item of clothing or food, it’s a lot easier there. Because you create lifetime value, we recognize that customers who purchase from us may take another five to six years to purchase a product from us simply due to the longevity of our products and the cost they are.

So for us, being profitable was sort of the number one goal. And I’m happy to say that we’ve been profitable every month so far this year, and we’re really proud of that.

We’re trying to do 15 to 20 times what we did in calendar year 2020. Obviously we didn’t operate for a full year, it was probably about six months. But we want to try to do 15 or 20 times this year.

And then the last thing that I think you know on a real strategic level that we’re passionate about is building what we call our initial team. We have hired two people here, we probably have one or two more who will start with us in the next two to three months.

And so as we approach 2022, we’re really confident in the team that we’ve built here in Phoenix, and we’re ready to become what could be two to three times what we’re doing this year next year.

Q: Is there anything else you would like to talk about?

A: We hope to bring more [items] on the market in August, then a few more between September and October.

So I think the cool thing that we want to try to do is not necessarily rest on our laurels. We want to bring other things to market that will be unique, different and complementary to what we have released and so keep an eye out for that.

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