Case Studies

Interior Specialists Inc.

Record growth through design center services

From the inside out, Interior Specialists Inc. Family of Companies (ISI) is paving the way for unprecedented growth in the building industry with a renewed business plan and aggressive growth strategy. For 32 years, ISI has served the western U.S. as a leading provider of interior design and installation of floor and window coverings, countertops and cabinets, coupling design expertise and in-house service in a comprehensive package.

ISI was established in 1982 in Carlsbad, Calif., as a small floor-covering specialist serving the homebuilder community in southern California. “It wasn’t until 1989 that the real growth of ISI started to happen,” reveals Alan Davenport, president and CEO of ISI.

Over the years, ISI expanded its geographical footprint via organic growth and multiple acquisitions. Such activities expanded the company’s market presence through acquisitions in Arizona, northern California, Washington and Oregon. Additionally, organic growth expanded ISI’s presence in Nevada, Colorado and Idaho. The company has a No. 1 market share position in the western US.

Now operating 39 locations in seven western states, ISI has diversified its offerings to cover everything from the multifamily and senior assisted-living market, production and custom builders, as well as government and student housing projects. “We have steadily diversified our business platform and now service not only single-family residential builders but multifamily and commercial customers, as well,” explains Davenport. “In the last few years ISI has dramatically evolved into a full service design center company for its national single-family residential builders. We have taken the steps to become more of a one-stop shop and service provider for builders to improve their profitability and enhance the treatment of their customers.” The diversification of ISI has made it the strongest company in the industry.

Reorganized and re-energized

Davenport joined ISI in December 2013 and immediately started restructuring the organization for growth. “While I’m relatively new to ISI, I have worked in the industry for over 20 years, including spending time with Builders First Source [BFS], a company with essentially the same model, but in building products such as lumber, doors, windows and interior trim,” he reveals.

Armed with the experience of growing a company from $400 million to a $2.5 billion organization, Davenport has started implementing the same formula for success at ISI. “We have focused on restructuring the cost side and we’ve hit that sweet spot,” Davenport says. “By implementing senior-level management infrastructure for high-level support on the residential and commercial business, we’re working on expanding and capitalizing new markets. I have a plan in place to double the revenue of the company within the next 18 to 24 months.”

A turnkey model for growth

ISI has already started to demonstrate some impressive returns, with 37 percent growth in 2013. “We’re showing our customers that they can save more on a house-by-house basis by bundling materials and services and providing the labor in a turnkey package,” details Davenport. “ISI adapts to the culture of the builder, aligning our service offering to maximize the value to the builder, and optimize homebuyer satisfaction.”

The company has a diversified service offering with approximately 85 percent of sales coming from residential builders and 15 percent coming from commercial sales. “Our goal is to drive up the commercial side a bit, up to 25 to 30 percent,” says Davenport. “We’ve changed the game and the way we do business. We’re not just a design center where a customer comes in and picks up flooring, cabinets, countertops and windows; we have made ourselves a service provider, as well, and that’s what sets ISI apart.”

Davenport says the company has come a long way due to its market-to-market approach. “We go into individual markets and say look, if we take over, we’re eliminating the cost and infrastructure you need to support a design center,” he explains. “We show builders the numbers house-by-house as to how much they’re going to make and save and we’re hitting the ball out of the park. That’s why builders are strategically aligning themselves with us, which enables us to expand into new markets.”

A single-source solution

ISI’s goal is to help builders minimize the number of people they need on a jobsite and that means bringing more functions in-house than ever before. “ISI has always been focused on flooring, but is now expanding its focus to the cabinet side of the business, as well as additional product offerings, because our customers have requested it,” adds Davenport.

While cabinets have been the biggest driver lately Davenport notes that ISI is always looking for something else to add to the lineup. “We’re also looking into supplementary products such as tub and shower enclosures – anything that makes it easier for the builder,” he ensures. “Our goal is to bundle as many products and provide a high level of service to support them.”

ISI also has its sights set on geographic expansion. “We have always been based in the western U.S., but we’re looking to expand in Texas and the East Coast as requested by several key customers,” notes Davenport.

After more than 32 years in business, ISI has differentiated itself with a unique product and service offering. Interior Specialists Inc. is in a mode of high growth and on the precipice of re-defining the design center service model for all homebuilders in the United States.

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