not following what I told them to do. I don’t mean to make it personal, but they’re not filling the bill. They’re not selling nice enough stuff. They don’t have big enough selections. They don’t go deep enough into a collection. More and more people want nice furniture; there’s only one place to go, and that’s the specialty store. “For example, Costco does significant amount of outdoor business. It’s nothing when you figure that you can’t buy an accessory. You can’t add on. You couldn’t buy a dining set to match your deepseating set. They can’t get enough velocity out of the little occasional tables to go with the chaise lounge, so they don’t carry it. That’s not being a legitimate patio furniture store. “There are factors playing that will make it even better for the specialty retailers. The indoor guys, basically as a whole, said to me, Our competition is Lowe’s and Walmart. I said, No. That’s not the business you want. You don’t want that customer. But they’re convinced that’s the customer they have to have. It’s just stupid. It’s not where the opportunity is. The Walmarts, the Kmarts, Lowe’s, and those guys, 90% of what they sell is under $999.”
Gaylord: (laughs) “Absolutely. Your
Aren’t the dot-coms increasingly going to hurt the specialty shops?
magazine is just one big seminar on how to do it right, and the people either do it, invest in it, or they don’t. When you don’t, you’re going to get left behind for sure. We’ve been out of the hearth industry for 40 years, but we were certainly there at the beginning of the hearth industry. There wasn’t a big hearth industry before the oil crisis, and that’s what got me into it. In the same respect, the outdoor furniture industry was miserably small until we started selling mass guys in the ’80s. “The important thing is the size of this industry today, and to me, it couldn’t be healthier because deep seating and chat makes so much more sense than just pure dining. We don’t do it, but costco.com has these conglomerations of sets that they sell with all-weather Doug Peppler. wicker. How about a 22-piece patio set, or a 24-piece patio set? You get your deepseating set. You get your dining set. You get your chaises. You get your fire pit and they do super. They’re $6,000, $8,000, $10,000 and they sell a trillion of them.”
Gaylord: “Oh, sure, the dot-coms can
That’s marketing.
hurt the specialty guys. The dot-coms will hurt every brick-and-mortar store. On the other hand, I say the bigger the pie the better. I play a lot of golf, and when I ride on a golf course, I always see the backyards. You don’t see the front yards. “When I look at backyards, the trip for me is how many nickel-dime, $399 sets are being replaced by $2,000 sets, $3,000 sets, and so forth. If they come from a dot-com, okay. But to me, the higher price points we’re talking, the better chance that person is going to go to a really nice patio specialty shop.” And there are people such as Doug Sanicola with one store doing over 10 million bucks. That’s terrific. (Doug Sanicola, Outdoor Elegance, La Verne, CA)
Gaylord: “That is sure marketing.
Absolutely. There’s your entire backyard, people. It’s cool. It really is.” Did you ever sell into Canada or Mexico? Gaylord: “Yes, and it goes up and down
depending on the strength or weakness of the dollar. If the Canadian dollar gets really weak against the U.S. dollar, they suffer. Of course, we have Costco Canada, and we have Costco Mexico, and stuff like that. But we have other customers up in Canada. Again, the success or failure usually has something to do with the dollar.” How many employees do you have here in the states?
Gaylord: “We have maybe 80 people,
something like that.”
So that would be the designers, things like that? Gaylord: “Yes, designers, salespeople,
product development people, marketing people, customer service, and our warehouse. The only thing we use our warehouse for, it’s all warranty replacement, stuff like that, because we do give warranties for up to 10 years. We’re pretty lenient. So everything goes out of my warehouses free of charge and prepaid freight.” Is there anything that you would like to get out while we’re having this chat? Gaylord: “Well, I
must say that I’m really happy to pass on the presidency of the company to Doug Peppler. He’s the right guy at the right time. Everybody thought I was going to make my son president, but he’s not ready. He’s not seasoned enough. It’s funny. He said, Dad, you started this company when you were 40. I said, yes, but starting a company and taking over a large company are two different things. “I told him, Mike, Doug is 54 years old, or so. I wouldn’t be surprised if Doug puts another eight or 10 years in, and then maybe it will be your turn. But we have a lot of other qualified people, too. Anyway, they created a position for me. It’s Executive Committee Chairman. “The only message that I will leave you with is that I look at this problem that we have right now as a serious opportunity to really build our business, to really promote the business, and try to energize people that this is not doom and gloom. “On the contrary, we have another opportunity of cocooning and staycations like we have not seen in 10 or 12 years. To have it happen twice in our lifetime, or career-wise, is really significant. I really believe that.”
www.hearthandhome.com | JUNE 2020 | 13