In 1975, Jake Jabs stood inside a 90,000-square-foot former American Furniture Company warehouse in Denver, Colorado, contemplating the journey that had brought him there. Raised on a ranch in Montana, Jabs grew up working with his family’s cattle, never imagining that he would someday build a furniture empire. After a stint in the military and a career in musical instrument sales, he found himself looking for his next entrepreneurial venture. The opportunity to purchase the struggling American Furniture Company came knocking, and despite the furniture industry being unfamiliar territory, Jabs took a leap of faith. With just a few hundred dollars in his pocket, a no-nonsense business approach, and a commitment to delivering value to customers, he transformed that once-failing business into American Furniture Warehouse (AFW), one of the largest and most successful furniture retailers in the United States today.
The Rise of American Furniture Warehouse
From that single location in 1975, Jake Jabs grew American Furniture Warehouse into a significant player in the U.S. furniture market. Today, AFW operates 14 massive stores in Colorado, Arizona, and Texas, with more than 4 million square feet of retail space. AFW’s success can be attributed to Jabs’ business philosophy:
- Offering high-quality furniture at competitive prices
- Running a lean operation
- Maintaining a hands-on leadership style
As of 2023, AFW generates over $700 million in annual revenue, and its stores draw millions of customers each year, making it one of the largest privately-owned furniture retailers in the United States.
From Struggling Store to a Regional Powerhouse
The company was on the verge of bankruptcy when Jake Jabs purchased American Furniture Warehouse in 1975. The original American Furniture Company, founded in 1931, had fallen into disrepair, and its customer base had dwindled. Jabs’ first move was to slash prices, streamline the inventory, and adopt a high-volume, low-margin business model. This strategy aimed at moving products quickly, allowing AFW to offer affordable pricing while maintaining profitability.
Jabs’ deep connection to his ranching roots was reflected in his approach to managing AFW. He treated his business like he would a ranch—carefully, methodically, and with hard work and dedication. His thrifty, straightforward approach resonated with customers who appreciated the value and honesty of AFW’s business model. By the late 1980s, AFW had not only stabilized but had also begun to thrive, expanding from a single store in Denver to multiple locations across Colorado.
The AFW Business Model: A Commitment to Low Prices
AFW’s competitive advantage lies in its ability to keep costs low, and Jake Jabs’ unique business philosophy has been a critical factor in this success. Jabs’ hands-on approach means he oversees every business detail, from selecting products to negotiating with suppliers. Unlike many furniture retailers who outsource distribution, AFW operates its fleet of delivery trucks and employs in-house crews to handle warehousing and logistics. This vertical integration allows the company to cut out intermediaries and pass the savings on to customers.
In addition to keeping logistics in-house, AFW’s no-frills marketing approach has also contributed to its ability to maintain low prices. Instead of hiring high-profile celebrities for commercials, Jabs stars in AFW’s advertisements, often featuring exotic animals like lions and tigers as attention-grabbing gimmicks. While unconventional, these low-budget, quirky ads have become iconic in AFW’s marketing and helped establish Jabs as a recognizable figure, particularly in Colorado.
Furthermore, AFW’s purchasing strategy significantly influences its ability to offer competitive pricing. Jake Jabs is known for buying in bulk and securing massive quantities of inventory directly from manufacturers at discounted rates. As a result, AFW can offer its customers products that are often 10-20% cheaper than competitors. During critical sales events like Black Friday, AFW has been known to offer discounts as steep as 40-60% on select items, drawing tens of thousands of customers through its doors.
AFW’s Stores: Size Matters
One of the most distinguishing characteristics of AFW is the sheer size of its stores. The company’s flagship store in Thornton, Colorado, is a sprawling 635,000 square feet, making it one of the largest furniture showrooms in the United States. The massive size of AFW’s stores allows the company to showcase an extensive range of products, from living room sets and bedroom furniture to home office supplies, mattresses, and outdoor furnishings. AFW’s vast selection is one of its most significant selling points, appealing to various tastes and budgets.
In addition to large showrooms, AFW’s stores function as warehouses, stocking thousands of items on-site. This allows customers to take home their purchases immediately rather than waiting for items to be shipped. As consumer expectations shift toward instant gratification, AFW’s ability to provide immediate delivery has been a significant competitive advantage, especially compared to online retailers, who often have longer shipping times for large items like furniture.
E-Commerce and Competing with Online Retailers
As the retail landscape has shifted toward e-commerce, AFW has adapted by building a robust online presence. The company’s website allows customers to browse the entire inventory and make purchases online, with the option for home delivery or in-store pickup. Despite the increasing popularity of online shopping, AFW’s website notes that around 85% of customers still prefer to visit the store before making a major furniture purchase. This highlights the importance of physical locations in the furniture industry, where customers often want to see and feel the product before committing to a purchase.
That said, e-commerce now makes up approximately 10-15% of AFW’s total revenue, and the company has continued to invest in its digital capabilities. AFW’s website features detailed product descriptions, high-quality images, and customer reviews, making making informed decisions easier for online shoppers. Additionally, the company has developed a user-friendly mobile app, allowing customers to browse, place orders, and track deliveries from their smartphones.
American Furniture Warehouse by the Numbers
AFW’s growth over the past several decades has been staggering. The company has expanded to 14 locations across three states from a single store in Denver. In 2022, AFW generated approximately $700 million in revenue, making it one of the top 50 furniture retailers in the U.S., according to Furniture Today. The company’s stores draw over 6 million visitors annually, and AFW employs more than 2,500 people across its locations.
A key driver of AFW’s success is its ability to move high volumes of products. AFW sells over 2,000 sofas, 1,500 mattresses, and 500 dining sets each week. Its warehouses are stocked with over 20,000 products at any given time, ensuring customers have a wide variety of choices and minimal wait times for delivery. This operational efficiency allows AFW to continue offering competitive prices without sacrificing profitability.
The Role of Jake Jabs in AFW’s Success
Jake Jabs remains deeply involved in the day-to-day operations of AFW, even well into his 80s. His hands-on management style has been crucial to the company’s success. Jabs personally oversees purchasing, marketing, and store operations, and his presence in AFW’s commercials has made him a familiar face to generations of customers. His work ethic and dedication to customer satisfaction have helped shape AFW’s corporate culture, and his belief in keeping overhead low has allowed the company to offer value to customers consistently.
Beyond his business accomplishments, Jabs is a noted philanthropist, donating millions to educational and charitable causes, particularly in Colorado. His $10 million gift to Montana State University, his alma mater, is one of the most significant donations in the school’s history. Jabs’ commitment to giving back has only enhanced his legacy as a successful entrepreneur and community leader.
Conclusion: A Colorado Icon with National Reach
American Furniture Warehouse’s rise from a struggling furniture store in 1975 to one of the largest furniture retailers in the United States is a story of entrepreneurial determination, innovative business practices, and a relentless focus on customer value. Jake Jabs’ leadership has transformed AFW into a Colorado institution and a regional powerhouse with a growing presence in the Southwest. With over $700 million in annual sales, a reputation for unbeatable prices, and a commitment to operational efficiency, AFW is well-positioned to continue its growth in the future.
