Our special guest this week is Lee Bird, CEO of AtHome, the Home Decor Superstore that has experienced phenomenal growth in recent years growing to nearly 250 stores in 40 states. Lee brings a wealth of experience to his current role, having held leadership positions at a few brands you might have heard of, including Nike, Gap, Old Navy, and Ford.
Our special guest this week is Lee Bird, CEO of AtHome, the Home Decor Superstore that has experienced phenomenal growth in recent years growing to nearly 250 stores in 40 states. Lee brings a wealth of experience to his current role, having held leadership positions at a few brands you might have heard of, including Nike, Gap, Old Navy, and Ford.
We dig deep into AtHome's incredible transformation from Garden Ridge, a struggling regional chain, to a re-branded national powerhouse. Lee takes us through the testing and customer insight that drove the new vision and re-concepting, while detailing the foundational elements that have provided critical to their success. We also explore the lessons learned from the pandemic and how AtHome is navigating current challenges with the supply chain, inflation and labor shortages.
But first we kick-off our jam-packed episode with some personal news, celebrating Steve's book being selected as a Kindle Monthly Deal. For a limited time only you can buy the ebook version of Remarkable Retail: How to Win & Keep Customers in the Age of Disruption for just $1.99 in both the United States and Canada. We also congratulate Michael on his Voice of Retail podcast reaching the 300 episode mark.
Then we briefly recap Steve's whirlwind tour of new store concepts in the DC area, including Bloomie's (Bloomingdale's new small store format), Amazon Fresh and the first Whole Foods Store featuring Amazon's "Just Walk Out" technology.
We move on to dissect the hot retail news of the week, including Amazon's very disappointing earnings, "the death of irony"--also know as Meta's new physical store designed to sell the Metaverse--before pondering whether the merging of a slightly better than average retailer (Kohl's) with a struggling one (JC Penney) makes any sense whatsoever.
About Us
Steve Dennis is an advisor, keynote speaker and author on strategic growth and business innovation. You can learn more about Steve on his website. The expanded and revised edition of his bestselling book Remarkable Retail: How To Win & Keep Customers in the Age of Disruption is now available at Amazon or just about anywhere else books are sold. Steve regularly shares his insights in his role as a Forbes senior contributor and on Twitter and LinkedIn. You can also check out his speaker "sizzle" reel here.
Michael LeBlanc is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience, and has been on the front lines of retail industry change for his entire career. Michael is the producer and host of a network of leading podcasts including Canada’s top retail industry podcast, The Voice of Retail, plus Global E-Commerce Tech Talks , The Food Professor with Dr. Sylvain Charlebois and now in its second season, Conversations with CommerceNext! You can learn more about Michael here or on LinkedIn.
Be sure and check out Michael's latest venture for fun and influencer riches - Last Request Barbecue, his YouTube BBQ cooking channel!
Michael LeBlanc 00:06
Welcome to Remarkable Retail podcast, season four, Episode 16. I'm Michael LeBlanc.
Steve Dennis 00:11
And I'm Steve Dennis.
Michael LeBlanc 00:13
Well, Steve together, not necessarily together, but that will happen to we're back on the road traveling. I was in Montreal last week at a big food innovation show and you were traveling as well, I believe doing store checks in the DC area, yeah?
Steve Dennis 00:26
Yeah, I took advantage of going out to visit my younger daughter who lives in the greater Boston area. And I decided to swing back through DC both to visit with a client of mine and to go running around the DC area to check out a few stores whether, whether DC is the harbinger, I think that's the word of the future of retail. Maybe we can chat about that a little bit.
Michael LeBlanc 00:52
Yeah, I'd love to hear all about it. And, and we have a very special guest, Lee Bird, Chairman CEO of At Home, which is right in your hometown of Dallas, great state of Texas, though they have stores across the country, I didn't know the brand. But I was so impressed as I researched stores. And of course, talking to Lee, who's a really impressive leader.
Steve Dennis 01:10
Lee reached out to me kind of out of the blue, I didn't know him, I was aware of the brand. He reached out to me and said, hey, would you mind going on a store check or store visit with me? And I was like, well, CEO of a retailer wants to wants to walk around the store with me, I'm going to say yes. And he's a great guy. It was really interesting to hear more about their strategy, kind of get a behind the scenes look. And since then, I think that was three, three and a half years ago at this point, as since then they have continued to grow. And yeah, it's a really interesting story. And he's got phenomenal background too. So, I think there's some good leadership lessons there.
Michael LeBlanc 01:45
That's an interesting way to interact with you doing a store check. I'm actually doing a store check with one of our prior guests in a week and a half from Bunnings, all the way from Australia. Michael Schneider is going to be my guest. And we're doing another store tour. So, it is a really fun, interactive way to talk to people, right, it brings strategy and thoughts to life. Yeah, I, I, I do really enjoy those.
Steve Dennis 02:03
So before we jump into the news, I just want to mention really briefly that my book Remarkable Retail has been chosen as a Kindle monthly deal. So, I believe this is only available in the United States. But the book will be available, the Kindle eBook version will be available for only $1.99, for the month of May. So, go check that out It's a-, if you haven't checked it out yet. This is your best opportunity to do so for a very little bit of money.
Michael LeBlanc 02:31
Very good. Very good. All that thought leadership for $1.99. Come on. That's fantastic.
Steve Dennis 02:36
But wait, there's more.
Michael LeBlanc 02:38
But wait, there's more. And I've got a little bit of a milestone. Actually today, we were recording this on Friday with one of my other podcasts The Voice of Retail?
Steve Dennis 02:45
Yeah, I was going to ask you about that. I saw that you posted that what's your 300th episode? Is that right?
Michael LeBlanc 02:50
It is my 300th episode, which is you know, wow, you know what a it's a great milestone. So, for anyone who happens to listen or not listen, thanks to everyone. And, you know, we appreciate so much whether it's on Remarkable Retail or The Voice of Retail, all the other podcasts that guests that come on and share their insights like Lee. So, yeah, great milestone for me. So, -
Steve Dennis 03:09
Oh congratulations.
Michael LeBlanc 03:10
Very happy. Thank you. Thank you. All right, well, let's get into the store tour I'm kind of keen to hear I see you're tweeting a few pictures, yu-, which, which made me LOL as the kids would say. So, talk about your store tour, what did you see and, and where do you go?
Steve Dennis 03:26
Well, my, my main intent was to see the Bloomie's concept from Macy's. So, this is the small store version of, of a Bloomingdale's store as well as a couple of concepts from Amazon Whole Foods and the Amazon Fresh store. I also popped into the Tysons Corner mall, which maybe we'll talk about briefly just t-, it made me think about a future episode we need to do but anyway, start with the with the good. I really thought the Bloomie's concept is very well executed. So, it's in Fairfax, Virginia. So, some folks will know it as a suburb of DC. It's in a I guess you'd call it a Lifestyle Center. So, it's got residential, lots of dining, o-, all exterior a number of well-known brands, Lululemon Warby Parker, those, those sort of places as well as West Allen, Williams Sonoma. So, quite an interesting mix of tenants really well done.
Steve Dennis 04:23
The Bloomie's store I'm not I think it's about 20,000 square feet, perhaps quite a bit smaller than the full line Bloomingdale's store. And it's got a very boutique feel. The visual merchandising was excellent presentation was excellent. And they've got a very prominent, I guess you'd call it like omni-channel fulfillment center upfront. So, where you can do returns do pickup that, that I thought was also very well done. There's a little cafe that's adjacent to it. So, overall, in terms of its, its presentation, I thought it was quite good. It you know, it's a little bit hard for me to understand without getting into their data. exactly who this is for, you know, because it's a little bit of everything, or I mean, it doesn't have a home section, but it's got some men's, it's got some kids, it's got some women's, it's a little bit of everything. So, it's very tightly edited, I would say it's definitely edited towards a younger customer, for sure. But a lot of the stuff they had in there was quite expensive. Like they had a what I thought was a crazy amount of Balenciaga sneakers, which are between $800 and $1200 and I'm kind of like, is there that many people they also had, one of the things I, I think I posted on social media was a patch’s stand. So, a little counter where you can get patches, like on your jean jacket, I guess, I don't know. It's like a, -
Steve Dennis 05:48
Patching moni-, I, I maybe this is what the kids are into, I don't know. But that, that was, it felt like a little bit of an assemblage of, you know, kind of cool ideas that maybe we're in search of, of revenue. But, but anyway, I thought, overall, great location, well done, whether the concepts really going to hit the market or, or not, I don't know.
Michael LeBlanc 05:48
Huh, is that a thing now.
Steve Dennis 06:09
Then I headed over to the Whole Foods store in it's called the Glover Park area of Washington, DC, if people know that, and this store has maybe 12 walk-out? What would you call the lanes, I guess, so, you can use your palm, you can use your phone to just, you know, walk out without having to do any checkout. There is one self checkout lane, which seemed to be used the most by people. It was not a particularly busy time. But it's a really nice store, -
Michael LeBlanc 06:44
I guess you need a bit of that, do you need a bit of that for alcohol, because I know you have to interact with an associate if, if, -
Steve Dennis 06:49
Well, it's interesting, you mentioned that so what I, what I saw both with the Whole Foods store as well as the Amazon Fresh store, which we'll get to in a second is they have a separate area where that you have to walk into and be show your ID to get into to get alcohol. So, I assume at that point, they disable you know, they, they basically ring you up so that you can go through the main the main checkout area, but I thought was well signed they've got like, signage everywhere, kind of reminding you to grab, you can grab paper bags, you can grab, you know, your own bag, to bag basically as you go, so you're ready to just, just walk out. So, I thought that was very well done.
Steve Dennis 07:28
Then I went to a couple miles away to the Amazon Fresh store in DC. There are I think are three Amazon Fresh stores in the DC area. This is by far the smallest. So, I may cut it a little bit of slack because of that, but I was very, very disappointed. I have to say a few things. One is very uninteresting merchandising. The presentation I thought was very flat. So, it just wasn't an interesting place to shop. It was a lot more like an ALDI if people are familiar with that, or, or maybe a little bit more like a Trader Joe's, -
Michael LeBlanc 08:02
which is thought of like as a hard discounter, which isn't what I thought they were going for, (crossover talk), -
Steve Dennis 08:06
Yeah, way more basic looking and kind of boring, I thought. They have where they had a very high rate of out of stock. I mean, it was quite shocking. I have several (crossover talk), -
Michael LeBlanc 08:17
What day of the week were you there?
Steve Dennis 08:18
It was a Monday afternoon. So, you know, that may mean depending on when they get deliveries, you know, and obviously their supply chain, (crossover talk), supply chain issues. But there I didn't see any of that at Whole Foods, I went into another supermarket. I didn't experience anything like that. So, that was strange. You can only there's no self checkout, you can only do the walk out and the signing there was not very good. So, you know, I know how it works. But if you didn't know how it works, it was kind of confusing. And there was no store associate nearby to help you. They seem to be really understaffed. Just even from a loss prevention standpoint. They had nobody in the front of the store, I was in there for 15 minutes. And I didn't saw one person kind of running around, went into the back and I didn't see them again. So, the staffing was really odd. Bunch of dead space, -
Michael LeBlanc 09:03
I guess from a loss prevention perspective, you'd have you'd have to, like in a subway, jump over the turnstiles, right? Because obviously if you grab something and you know, the whole concept is shot but like you stole it, right, you just (crossover talk), once you're in it, you're in it, (crossover talk). If you jump over the turnstiles, you-, you're, you're (crossover talk), -
Steve Dennis 09:17
Absolutely yeah, they're not, they're not set up to be particularly protective. So, so yeah, it was just very, it was very odd. I, I'd like to think that, you know, I caught them on a bad day. Or there's something about that store in terms of its size or layout, because it is a little bit peculiar. And it's kind of, of a funky location. So, overall, though, that was very, very disappointing.
Steve Dennis 09:40
So, yeah, the, the last thing I'll mention, is actually I did this before I went to Bloomie's. The first thing I did, I went up to the Tyson's Corner mall in Virginia, which is about three miles away from the Bloomie's store and some people will know that's a huge mall. Five anchor tenants. I think it's one of the top 20 or 25 malls in the US. I hadn't been there for 15 years, I opened a store there about 15 years ago, and it was the last time I was there. What was interesting to me, and I don't know that I even want to tee this up without being able to get into it. But it just really struck me. Just like how comically large and kind of ridiculous, some of these massive regional malls are, like, I just, the layout is so confusing. It's so hard to know where you are, you have to walk an incredible distance to go, you know, if you want to go between the Nordstroms and one of the other anchors, or go over to the food court, whatever, you know, it's 10 minutes. They happen to not, I'm not sure who I forgetting now, who owns and operates that mall, but they don't seem to have put a ton of money into the mall to kind of really update it. So, it's not particularly interesting visually, and probably 10%, I would say of the space was vacant, and probably another 10 to 15% were brands or, or concepts or whatever that I would be like, I don't know who that is. Or that just seems like a really tired old concept. So, it's, it's just, uh, you know, I, like I said, like to kind of come back on the future, the malls, because I think even some of them better malls are so over spaced, and so uninteresting, that I think, you know, there's a good reason that for the most part, malls overall, continue to lose, lose market share, even if there are seeing a bit of a resurgence now.
Michael LeBlanc 11:29
You know, I was going ask you the question. It's interesting, because, you know, if you closed your eyes and imagine 15 years ago to today and opened your eyes, was there a big difference, like our (inaudible) been 15 years ago when you mi-, plus or minus a few retailers? So, what, what I'm hearing is you didn't see anything remarkable, or remarkably different about a format that is really need of change?
Steve Dennis 11:52
No, and like I said, I'd like to take this on and get into more depth. But I would say overall, not very much. I mean, there's you know, there's like a Peloton store there, you know, there's some newer retailers that are there, the handful of those is the Shake Shack, you know, there wasn't a Shake Shack, or whatever, you know, like, but, but aside from a few newer retailers, it looks to me very much like malls have looked like for, you know, 15, 20, 20 years. I'm sure they painted the thing since then, or whatever.
Steve Dennis 12:15
But no, so it was really, as I say, in my book, I generally believe, but I'm kind of revisiting it, which is why I bring it up and why I think might be worth talking about in a future episode, I generally believed that the really good malls, were not necessarily in need of that significant of a change. It was really the the B, C and D malls that are really in trouble. But I'm starting to believe that that's not as, as true as I wanted to believe as I spend more time at some of these malls and really take a hard a hard look at them. But anyway, topic for another day. But, -
Michael LeBlanc 12:48
(Crossover talk), a whole episode to want to talk about that. Let's just pop into some of the news of the week. Amazon, speaking of Amazon, you are in a couple of Amazon stores there with Whole Foods and Amazon, they put out their earnings and the general, you know, the general vibe was, you know, a deceleration in sales growth. Anything else you, you observed from the earnings?
Steve Dennis 13:09
Well, so we're recording this on Friday morning, they reported I guess, after the market closed last night, and it was this big, big disappointment that fell well short of sales and earnings expectation. Now part of it, which is a little bit while there's always a little bit of confusion with Amazon earnings anyway, but they did take a big write-down of their investment in Rivian. So, that explains some of the headline numbers, you may see about how big the loss was. But if you actually it well, apparently people don't love it, or Amazon doesn't love it quite as much. But in any event, but if you look just in general at what's going on, the sales growth at the very top line was much lower than the rate and you know, they found the trajectory they had been on. They reported what appeared to be, well, I shouldn't say what appeared to be. But AWS did well, but basically, the rest of the business lost a lot of money. It says people probably know by now, Amazon doesn't do a very good job of breaking things out by segment. So, you can't really tell what the impact of the advertising business was compared to Prime compared to retail, etc. But given that we know and they quoted some top line numbers about advertising, but given that we know the advertising business is massively profitable, the fact that everything else but AWS lost a ton of money, suggests that retail lost a ton of money, Prime lost a ton of money, etc. So, you know, there’s a bunch of and that's all led to negative free cash flow. And Amazon has been kind of a cash printing machine. So, it's not a very good and you know, the Rivian write-down is not a cash item. So, from an operating basis. They've had negative cash flow pretty significantly. So, this is a pretty big disappointment, the stocks are down a lot. I think it speaks to two things.
Steve Dennis 14:57
One is, which is very much what we tackled in the last episode that eCommerce is really decelerating. And Amazon is 40% of eCommerce, you know, you kind of expect that we would see that sort of numbers. The other part is and they and they talk about just the costs, you know, not only the supply chain issues, you know, labor issues, you know, you name it, it is really impacting their margin. There's some speculation that they kind of have over invested in infrastructure, given the trajectory of sales. You know, I think, you know, that may explain it, but, you know, I think we'll need a little bit more time to figure that out. But anyway, overall, very, very disappointing performance.
Michael LeBlanc 15:39
Well, as big as and great as Amazon is, they're not impervious to all these cost drivers, right? I mean, whether they do it themselves or something else, these things affect are affecting everyone. Let's say, last couple of things. I'm laughing because I'm just reading your post on Meta opening a store to sell the Metaverse, which you called the death of hierdie, which just cracked me up, -
Steve Dennis 16:01
Yeah, th-, th-, the best way to explain the potential of Metaverse is to (crossover talk), to open a physical store. So yeah, I found it very ironic, don't you think?
Michael LeBlanc 16:15
Thank you Atlantis, -
Steve Dennis 16:16
But at the same time, -
Michael LeBlanc 16:17
Great Canadian, right?
Steve Dennis 16:18
At the same time, I do think it makes a lot of sense, I, I think for people to understand the technology and how it works, having an in-store experience to be able to, you know, try them, try the headsets on and, and talk to somebody and all that kind of stuff. I think it makes a lot of sense just much in the way that there are plenty of showrooms for all sorts of things, right, that, that you may eventually end up buying online, once you get into it. So, this particular store is actually going to be on their Burlingame Campus. So, I wouldn't like we talked about with Amazon and, and you know, Google opened a store, I wouldn't necessarily, this necessarily would conclude this is suggesting some big massive store rollout, -
Michael LeBlanc 16:57
You might see one is SoHo or some box store, -
Steve Dennis 16:59
Right, and my, my, my guess is yeah, they're going to sort of shake it down. And then they may open, you know, a handful of them. I don't think they're necessarily going to have hundreds of these, but you never know. You never know.
Michael LeBlanc 17:08
It's not like they lack the resources to do it, right? They could do whatever they want. They've already sunk 10 billion into this. So, what's another few dollars of, you know, (crossover talk). And again, in a, in a kind of a funny, I don't know what to call it, but JCPenney, we talked about JCPenney a couple episodes ago, throwing their hat in to take over Kohl's. So, is this one plus one equals point five, like how is this going to work?
Steve Dennis 17:34
Well, (inaudible) I think of this as kind of, well, you know, it remains to be seen, perhaps by the time this episode comes out a deal will be done. But yeah, the owners of JCPenney, which is Brookfield and Simon properties, and Authentic Brands Group is kind of involved some way so two big mall operators have thrown in a bid, apparently, to buy Kohl's. I think you know, in the good news category, my guess is that they would be better owners, than a financial firm, you know, they actually have strategic value. I'm sure there's, you know, synergies (inaudible), synergies, etc., that could be realized across a portfolio. On the other hand, as I think I said, on social media, you know, putting a slightly better than mediocre retailer together with a terrible retailer. It's not obviously, a winning strategy, (crossover talk), -
Michael LeBlanc 18:26
It doesn't jump out, (inaudible) that's a win-, that's a winner right there, yeah.
Steve Dennis 18:31
Well, you know, the, the risk of being kind of glib about it, the reason that Kohl's has been stagnating. And the reason that JCPenney has been tanking for, you know, 10 plus years is not because of their cost structure, or getting, you know, synergies or being owned by mall operators. It's because they are not sufficiently customer relevant. So, it's not clear to me what Brookfield and Simon bring to that party. So, it's hard for me to get excited about this from the standpoint of oh, this is really going to put these two brands on a much greater trajectory because they, they both have Penney's, way more than, than Kohl's have a lot of challenges. But you know, I think, you know, when, when Simon and Brookfield bought JCPenney, you know, there was a real sense that Penny's was probably going to be liquidated if that didn't happen. And so, for these mall operators to have control of that, you know, had some sort of option value, I guess you could say, owning Kohl's, you know, is kind of interesting, because Kohl's is clearly better positioned from a real estate standpoint. So, you know, I don't think we've heard much about what they plan to do, other than I think they said they would plan to keep them, you know, essentially separate brands. But anyway, we'll see, we'll see if it happens. And it does seem like something is about to happen with Kohl's one way or another. But like I said, perhaps by the time this comes out, we'll know.
Michael LeBlanc 19:57
(inaudible), great, great roundup, but we went a bit long longer than our usual episode but so much going on. Great to hear about your tour. It's so great to get out and to go to different places and experiences. But now let's, let's talk about, let's talk about At Home and let's get to our interview with Lee, Lee Bird from At Home.
Steve Dennis 20:16
Well, Michael and I are delighted to welcome Lee Bird from At Home to the Remarkable Retail podcast. Lee, thanks for joining us. How are you today?
Lee Bird 20:24
I'm doing great. Thanks for having me today.
Steve Dennis 20:27
Well, you bet. Well, you and I have known each other for a little while. And we're really excited to have you come on the podcast. But maybe we could just start off by having you tell everybody a little bit about yourself and your professional journey, and then we'll get into learning more about what's going on at, At Home. Sure,
Lee Bird 20:44
Sure, well, I've been at, At Home for almost 10 years. Before At Home, I held a variety of leadership positions. Most recently, I was serving as a partner at a global private equity firm. Before that, I was a Group President at Nike, Chief Operating Officer at Gap, Chief Financial Officer at Old Navy. And before my consumer retail career, I had various strategic and financial leadership roles at Gateway, Honeywell, and Ford Motor Company. And I began my career as a Commercial Loan Officer in a bank in Boston.
Steve Dennis 21:12
So, any brands we would have heard of though it doesn't sound like you worked for any large companies.
Lee Bird 21:14
No, (crossover talk) probably nothing you've heard of, -
Steve Dennis 21:18
That's too bad, but well, well, we'll make do.
Michael LeBlanc 21:22
So Lee, nice to meet you. Tell us about for the listeners who may not know we have an international audience a little bit about At Home, can you describe the business model the scale and scope where you operate and, and what makes you different in a pretty busy space?
Lee Bird 21:38
Sure. Well At Home is a growing national home décor retailer in a warehouse format. Here in the US, we've got 247 stores in 40 states, doing a little over 2 billion in sales, we've got long term potential to expand that footprint to at least 700 stores growing about 10 to 15% a year. And our mission is to enable everyone to affordably make their house a home. And we offer about 45,000 on trend home décor products to fit any budget or any style, you know, think about furniture, mirrors, rugs, art, housewares, tabletop, and anything to decorate both the home inside and outside the home.
Steve Dennis 22:16
I guess when we met, which was probably close to four years ago. Now you were nice enough to give me a tour around one of your newer stores or at the time was one of the newer stores in the Dallas area. And I learned quite a bit about the transformation that, that the business has undergone back from the day some, some of our listeners might remember a concept called Garden Ridge. So, a lot has happened in I guess, nine or 10 years. Can you just tell us a little bit about that history and how the transformation came about and all the different things that have been going on over the past few years.
Lee Bird 22:50
I had actually tried to buy the company a couple years before that with another private equity firm, raised the money and the company decided not to sell at that point took it off the market. But I, I was enamored with the idea of this business, I felt like it could become a national retailer. But knowing that when I joined eventually as CEO, once they had new ownership.
I joined I knew that the Garden Ridge name and history were going to be a (inaudible), growth financially, it had a bankruptcy in its history, the customer Yelp reviews were tough. I would tell you that the Glassdoor reviews weren't much better from the employees. So, we focused on improving the employee experience first, then improving the overall store experience. Then we adjusted the product assortment to align with the strategy that we would become the home décor superstore.
And the last thing that we did was deciding on a name change. And we, we hired a branding firm that I'd worked with before from New York City. And we wanted to I, I certainly wanted to have a name that would be easy to say, that was common that was in the common vernacular of our society. And it was clear that we were in the home business. And so, I gave them that spec and we landed on the name At Home.
We then invested about $20 million in the rebranding, including changing our, our name color palette to gray, blue and white. Then we tested the name, I always felt like you should test before you roll. So, we tested the name in St. Louis, we rebranded the all the stores in the St. Louis market. We did custom research with those customers and 96% of them said they'd come to an At Home store as much or more as they would have when it was Garden Ridge and 97% said they'd spend as much or more at an At Home versus Garden Ridge. So, I'd call that a success.
So, once we knew the customers liked it, we went market by market rebranded the whole company within about five months and comps improved 8%, (inaudible) store sales were 8% increase that year, five points of that, of that eight points was from the rebranding so the new identity really reflected better the company's mission to enable everyone to make their house a home and to address every room, every style and every budget. So, we were really pleased with the outcome for that and it's been real-, you know, really a rocket ride since then.
Steve Dennis 25:02
So, you know, as I'm thinking about in this comes up a lot on, on our podcast, you know what it takes for retailers to innovate? And it seems like a lot of times, and you can tell me if you agree with this or not that plenty of retailers are able to do fairly incremental changes, but, but you did pretty radical transformation is, is there anything? I mean, is that just very particular to the place you found garden Ridge at the time? Or are there some underlying lessons that other retailers might take to heart to, to actually, you know, kind of aim higher, go bolder, be, you know, more committed to a faster transformation.
Lee Bird 25:39
Part of it was the Garden Ridge situation, not very many companies do walk into that had a bankruptcy in its past with bad Yelp reviews, and Glassdoor reviews. So, we had to do a lot to make some changes. And by changing the name, you could leave all that history behind you. We did find that the I did find that the elements of the business were great. It had home décor at its very core. And we just wanted to bring that to life. So, I would say, some of that's unique to, to, to Garden Ridge, but some of its consistent with everyone, you need to make sure you've got a great business model, which it did, a, a strong customer value proposition, a great employee and customer experience. And, and if you don't have those things, you obviously need to put things in place to make that make it come to life that way.
Steve Dennis 26:26
So, so the rollout was maybe you said this, and I missed it the, the rollout of the new branding, what year was that?
Lee Bird 26:33
2014.
Steve Dennis 26:34
Okay, so then within I guess, just two or three years, you went public, only to then go private again, last year for I think close to about $3 billion. Can you just talk about a little bit what, what transpired in your journey into the public markets and then back into the private side?
Lee Bird 26:54
For me, it's always about having the right owner for the right time in the business. And we have a strong growth company. And but I also knew and our team knew, our executive team knew that we needed to make some nonlinear investments going forward to keep our momentum and realize our full potential of the company, as I mentioned, could be 700 stores across the US. And so, taking the company private allows us to make those investments, invest in store expansion, invest in brand awareness, investments around the customer experience, and our online presence, to, to realize our full potential. So, going private, it'll allows you to do that more easily than a public company. And we're thrilled with the ability to do that.
Steve Dennis 27:35
Did you, did you feel like I, I remember when we first met that I somewhat and even though you know you guys are based in the Dallas area, I live in the Dallas area, I still felt like At Home was kind of this, almost like this best kept secret in retail, you know, had a significant number of stores, great performances. I'm not sure quite how many states and markets you were in at that point. But I think you're in like 40 states now. So, it's not like you're a tiny little retailer, but, but somehow didn't get maybe as much love from the public markets as they, as they should have that part of the motivation or, or not?
Lee Bird 28:10
It was really about the business, let's just make sure that we've got the right owner for the business and we needed to make some investments. It's hard to do as a public company. They don't always reward you for that. And the feeling was, let's make sure we've got the right situation for us to continue to grow and build on this great company and this great brand. And so, we wanted to do that we were able to do that make our, our investors or existing investors a nice return for their investment, at the same time put the company in the best position for growth going forward.
Michael LeBlanc 28:39
Lee, let's spend a bit of time talking about your business in the category in the COVID era. And I guess kind of in the post-COVID era, probably, you know, really strong demand supply was maybe a bit problematic long lead times we, we hear about the supply chain challenges. Has this changed your view or your team's perspective on global sourcing and where you find your product and how you find your product? And, and share your perspectives on that? And in what now is an even more turbulent supply chain challenge globally?
Lee Bird 29:14
Yeah, it certainly has been for everyone and I would tell you for us just as much as anybody. We do, we do, think about our footprint a lot. We've been growing like crazy, as I mentioned. I mean we had same store sales growth, high, high double digit, same store sales growth two years in a row. So, you're talking about high growth at the same time we're opening up stores, that's made us a top 30 importer.
And so, we do import a lot of our product. We have 100,000 square feet that we fill our stores (inaudible), right now. I'll tell you our stores are stocked right now with inventory, which not every retailer has that same blessing. So, we've got the inventory that we need to run our business that's taken a lot of work, it's taken some investment to get there.
We always continue to refine our view about our sourcing footprint. We want to focus on making sure that we've got the right product partners to help us, we design, develop our product with them. We're a vertical retailer. It's all essentially private branding, over 70% of our product is private label, private branded. And, and so for us, it's about the design development work and working with great product partners. And we've found that we can do that across the globe, we've been diversifying across the globe, and finding even better product partners that can address new categories, in, in improving our quality. But it hasn't been easy the past few years, boy getting the product here, the stops and starts with COVID, that we're dealing with the in-, incrementally costs to, to bring the product in, all that's been a challenge. But thankfully, because of our size and scale, we've got partners that can help get our product here when we need it.
Michael LeBlanc 30:48
Yeah, it, it really is a case where scale really matters, right? In the import business, right? It's a huge, you know, you get on that boat or you, you reserve that, that plane, let's, let's talk about the economic conditions. And, and you've been operating in multiple different economic situations. What's the playbook now here, as we enter these inflationary times and some questions about, about growth, as even as consumers shift from buying goods to services in the post-COVID era? Wha-, what's, what's your playbook trying to understand retailing in the inflationary days?
Lee Bird 31:23
Well, Michael, anytime you've got input costs that go up, you have to look at your cost structure and you’re pricing unfortunately, and as a low-price leader, we're very, very cautious about increasing prices. And we also have the best and lowest cost structure in the industry for us. So, I would tell you that we need to, I would tell you to take a fresh look. And we always have at our, our price increases. And so, we were slow to take price increases. But we've had to recently, we've noticed a competition had already raised their prices, because of the freight and labor cost challenges that many of us are experiencing. So, we've had to look at price, we've also had to look at costs. And we think from the freight standpoint, eventually freight costs will get back in line. But we do know the labor costs are here to stay because of the labor shortage. So, companies are going to continue to have to focus on being efficient. And companies like us with low-cost structure will be winners.
Steve Dennis 32:20
So, maybe this is maybe you could tell me whether this is a fundamental trade off. But I understand you recently published your first corporate sustainability report. Sustainability is obviously a very hot topic in the industry. And, and maybe you just kind of tell us more about what you were aiming to do there or what your are, you are aiming to do there. But, but, you know, a lot of times there seems to be this trade off between ethical sourcing and fair trade and these, these kinds of things while trying to maintain that low price position. That's obviously a core part of your business model. Tel-, can you tell us a little bit more about what you're up to there and, and how you address those trade offs. If you in fact see them as trade offs?
Lee Bird 33:00
Sure, I'd say ethical sourcing is always the right thing to do. You've got to make sure that your product is made in such a way that you're comfortable with it, and that your customer will be comfortable with it. And we've, we've always taken that lens in our, our product strategies and our sourcing strategies. And now as we move more towards direct sourcing, instead of agents about over 20% of our product now is direct sourced we directly source from India, Vietnam, Pakistan, Cambodia, and China. And our goal is to be a third direct source.
And as you go more towards direct sourcing, you can expand the number of factories, you can really drive your own agenda in terms of what you want from a factory conditions standpoint. So, we are focused on that, making it not only our company a great place to work and grow, but also our product partners to be a great place to work and grow. And so, we're focused on quality and leveraging those partnerships to help us achieve those outcomes, while keeping costs low.
And we've expanded across Europe and Mexico now too, we're getting savings from that cost and improving our speed to market. So, as we look at our footprint, we make sure that it's not only ethical, but also achieves our objectives. And we don't look at just product itself from a sustainability standpoint, we look at our whole value equation and our whole cost structure. For example, we recycled more than 7 million square feet of retail space because we typically take it second generation real estate. And that allows us to repurpose old boxes, not have to build an, all new building, not have that environmental impact. And so, we think about all of that our entire footprint on the on the globe, when we think about sustainability.
Steve Dennis 34:43
I love that and maybe I don't know if this was what you were getting at. But I remember when we first met you were telling me a little bit about your real estate strategy and the, the sort of buildings you were going into is that strata-, well maybe you could just kind of give you the background on out in the house, that strategy largely stays stayed the same or are you shifting it?
Lee Bird 35:03
It has stayed the same. We like second generation real estate. So, other retailers may have closed a large box across the country. And we've already scored analytically scored all 20,000 operating big boxes in the US (inaudible) which ones and then scored them as if it was an At Home, how much sales would it do and then build a market plan instead, it's out, out of those stores to fit into our the market plan. So, when a box comes available, we'll know does it hit the market plan, what would be the projected sales in that location and we can take over a big box and get in there within about 120 days from, from the idea to the time that we move in so we can move fast too so we would become a great solution for landlords. And that allows you to do it a much, much cheaper cost from a CapEx standpoint than having to build it all yourself.
Steve Dennis 35:48
I didn't realize you were doing things so quickly. But the JCPenney store that you occupied not too far from where I live, I felt like that got done in about two weeks. I'm sure it was longer than that. But one day I drove by, and I was like, wow, it's an At Home. So yeah, it seems like it came, came out of nowhere. But you know, the other thing I wanted to ask you about quickly was wh-, when we met, one of the things we were talking about was the role of digital. And I think at the time, you did not have much of an eCommerce presence. But it seemed like you moved quite quickly. I don't know if it was motivated by COVID, or was really pre-COVID. To put together what I call, you know, more of this harmonized retail, this, this blend of physical and digital, can you can you tell us about your journey there and how that's, that's been playing out?
Lee Bird 36:37
Sure. We were super thoughtful about our digital strategy. I'd seen retailers rushed to digital without understanding the implications to their business model. And we decided we were going to learn from those that had gone before us and ensure that we did it in such a way to meet the needs of our customers and our investors. So, in other words, we were going to do eCommerce our way and, and we did when I met with you, we were in that studied out process.
And two years ago in early 2020, we started a test, a 28-store test on, on buy online pickup in store. And as soon as COVID started, we rapidly rolled out the buy online pickup in store to all stores, we added curbside pickup and an enhanced local delivery service to meet the needs of our customers at that point. And we did all that in less than 22 months. So, we were slow to start. But then when we implemented it, we were very quick. And that taught us that we can move fast to meet the needs of our customers and also taught us that we can, we can work differently and operate differently.
And I would tell you that thinking about how to work differently and operate differently. We have done that past two years because of COVID. And, and in fact, we're actually building a new corporate campus, here in Dallas, and that corporate campus will now enable hybrid working, which is also allowing us to work differently in a with a flexible workforce.
Steve Dennis 37:56
You know, again, one of the things that Michael and I have touched on a lot talk about a little bit of my book is why does it take a crisis for retailers to innovate? Or I guess you could say, you know, any large organization, do you since you have worked at a number of other places? What have you really learned about innovation more broadly and you know, it sounds like a bunch of things that, that you learned from COVID are going to stick in your new, new model, but ain't just general comments about innovation and how to move more quickly?
Lee Bird 38:28
Well, I think you need to be thoughtful about what the needs are of the customer, first and foremost, you can't worry about other things, you always need to be relentless about the customer. And so, make sure you've got the right customer value proposition right away. And if you don't, you need to make sure you address that right away. And so, I would tell you that it takes courage. I've always loved the phrase; "Fortune favors the brave". So, some, some folks are, struggle with that. And you have to have courage. But I would tell you data helps inform and enable courage too. So, I love it, to innovate, you need to test, you need to get good data, you need to then try things out, be willing to fail. But then once you've locked in on something that you think is going to work, then have the courage to move fast. Because when you do that, the customers will see that they'll be excited that you're innovating and they'll want to be a part of that as well.
Michael LeBlanc 39:26
Well, Lee, a last question for it's been a great discussion and you're talking about moving fast and, and aligning to the ever moving, ever changing consumer. What's next for At Home or do you have a it sounds like you're expanding your footprint for sure in new categories. Have you considered international expansion up here, perhaps to Canada and what's, what's next on the on the blueprint to continue that momentum that you've established?
Lee Bird 39:50
Yeah, I would say just building off of that comment on, on innovation, I'd say what we have right now is going to enable our future we've got a great customer value proposition, a low-price leadership in home décor, we've got an amazing and very healthy business model. With a low-cost structure, we've got a great leadership team and a great team overall, because we've hired well and developed our team. And we've got an amazing culture. When you have those pieces in place, you've got a great company, and you've got a great concept for the customer. So, for us, we're going to move forward and grow, we're going to gain meaningful share, we've been doing that for the past nine and a half years that I've been here and we're going to emerge as a major winner in the home décor space. And our, our mission is to become the leading home décor retailer. And we'll do that by enabling everyone to make their house a home. So, that's going to be our effort and we're going to be executing our plan against that to ensure that we offer those everyday low prices to our customers by having fresh, relevant product for them for their home, in every style for every room and every budget.
Michael LeBlanc 41:00
All right, well listen, this was such a great interview. Lee it's it is a treat to get to know you and get to know the business. I think it's next door to Steve but for me it was a new adventure getting to know the business. So, congratulations on all your success. And, and I wish you much continued success on behalf of Steve and I. And thanks so much for joining us on the Remarkable Retail podcast. It was it was a real treat to have you as a guest.
Lee Bird 41:23
Michael, thank you, Steve. Thanks so much.
Michael LeBlanc 41:26
If you like what you heard, please follow us on Apple, Spotify, or your favorite podcast platform so you can catch up with all our great interviews, like our discussion with Target SVP, Nancy King on their innovative approach to harmonize retail, new episodes of show up each and every week. And be sure and tell your friends and colleagues in the retail industry all about us.
Steve Dennis 41:43
And I'm Steve Dennis, author of the bestselling book, ‘Remarkable Retail: How to Win and Keep Customers in the Age of Disruption’. You can learn more about me my consulting and keynote speaking at stevenpdennis.com.
Michael LeBlanc 41:57
And I'm Michael LeBlanc, producer and co-host of the Conversations with CommerceNext podcast, The Voice of Retail podcast, keynote speaker and host of the all new, Last Request Barbecue cooking show on YouTube. You can learn even more about me on LinkedIn or meleblanc.co.
Safe travels everyone.
SUMMARY KEYWORDS
store, retailer, mall, retail, customer, home, product, JCPenney, crossover, bit, business, thought, company, Amazon, home décor, kohl, inaudible, hear, talk, brands