Why Phelan’s Interiors in Cedar Rapids is pivoting out of retail, after 84 years

CEDAR RAPIDS — The decision to pull Cedar Rapids-based Phelan’s Interiors out of the retail sector was nearly a decade in the making, said Paul Phelan Jr., the company’s CEO and president. And it did not come lightly.

Phelan’s, a downtown fixture for the past 84 years, announced it would close the retail furniture division this past month.

Phelan said the business would fully focus on working with corporate design clients, a fast-growing niche for the business.

Corporate design work first became a part of the Phelan’s business model in 1985. Since, then Phelan said the sector has seen incredible growth, most recently working with a number of health care organizations and senior care facilities.

“This is a very positive change from our standpoint,” he said. “We just see more consistency with the corporate sector.

“Some of that is due to the fact that if you remodel your home and shop with us, we aren’t likely to see you again for the next 10 years. It’s not a high turnaround part of the business.”

Phelan noted supply-chain challenges have exacerbated the problem.

“We went from a typical six- to eight-week delivery window for products to having to wait 52 weeks, a full year from order to delivery,” Phelan said. “On the corporate side, we just don’t have that challenge.

“Plus, corporate environments are always changing,” Phelan added. “There’s always something going on with our corporate clients and we’ve enjoyed building these relationships. Today we are seeing that culture plays a very critical role in running your business.

“As we work with clients, we ask them to tell us what is important to them in running their business because we want to make sure their space looks the same way they are doing business, showcasing their culture. Especially as people come back to work, businesses want to make sure it’s a positive environment.”

Phelan’s new tagline, he said, “is ‘Love where you work’ because we want to help businesses take care of their spaces and it’s fun to see people have a renewed enthusiasm for that.”

The family-owned business has been around long enough to serve generations of residential customers as well, a fact that makes this decision poignant, Phelan admitted.

Over the years, Phelan said he’s often called residential customers on weekends to make sure their deliveries arrived as expected during the week and that they were pleased with their purchase.

“They share so many memories,” he said. “I always say I would not operate a business in any other city but Cedar Rapids. This community has been super to us, so this is bittersweet.

“I imagine that over the next three months we’re going to take a lot of trips down memory lane because we’ve been here for more than 80 years.”

A corporate starting point

This will not be the first time in all its years of business Phelan’s Interiors has had to realign. Paul Phelan said he remembers conversations on his very first day on the job about a new paint company opening in town that would be brining worrisome competition to Phelan’s.

“Payless Cashway was opening on the west side of town, and they were selling the same paint as us for less money per gallon. So back then we saw a real need to take a look elsewhere and we began working with residential clients,” he recalled.

“The funny thing is Payless Cashway is no longer in business and we are still here.”

Phelan said the company’s corporate design services were born organically out of residential customers and friends of the family asking their team to work on their offices after being impressed with the work they had done in their homes.

“We saw a lot more opportunities popping up after that and it was our corporate starting point and it’s been very effective for us,” he said.

Phelan’s first opened its doors, then called Cedar Rapids Paint, in 1938, to sell paint and supplies to retail clients and lumberyards.

In 1957, the store was renamed Cedar Rapids Paint and Design Studio as furniture and design services were added to the mix. In the early 1960s, Paul Phelan Sr. purchased Cedar Rapids Paint from his father-in-law and added wall coverings and decor to the store’s offerings.

The business officially was renamed Phelan’s Interiors in 1982 when it moved to its current location on the corner of Third Avenue and Seventh Street SE in downtown Cedar Rapids.

The store was closed for several days to allow staff time to prepare for a liquidation sale. But the showroom reopened this past week with prices lowered to help sell off the nearly $1 million worth of inventory from the sales floor and in the warehouse.

Shoppers can find brands such as Spring Air, Flex Steel, Lexington, Norwalk and Bradington Young, Phelan said, for furniture for living rooms, dining rooms and bedroom as well as accessories and mattresses. Special orders also still will be taken and delivered as they arrive.

Phelan envisions the sale going through early summer.

With the closing of the residential retail portion of the business, Phelan’s headquarters will remain in its current location but will be consolidated to a portion of the first floor. The remainder of the space could be leased out in the near future.

While the change is a big one, Phelan and his team are excited.

“This has become a positive pivot for us,” said Phelan, noting that feedback from corporate clients has validated the decision.

“And, of course, I just want to thank everyone who has walked through our doors over the years and given us the opportunity to serve them, furnishing their homes. We’ve loved every second of it.”