Family Succession Story: Longtime business operations prove that some things never change - Aug/Sept 2022

By Jennifer Bardoner

A lot has changed over the past 30 years. The top 20 retailers’ sales figures then were not even a fourth of the sales of today’s single top retailer. Home centers like Home Depot-then number 13 and now number one in terms of sales volume-have changed the scene, offering increased competition and, by some estimations, reducing the field of mom-and-pop operations by roughly half. Yet the fundamentals of growing a successful family business remain largely the same, as evidenced by the operations of several multi-generation flooring dealers.

FIND A NICHE
Myers Carpet
Myers Carpet has differentiated itself through its focus on high-end products, but its story is interwoven with that of the carpet industry itself. Current owners Rick and Ray Myers grew up in the carpet capital-as did many of the category’s big names. Rick Myers and current Mohawk CEO Jeff Lorberbaum ran around together as boys in their hometown of Dalton, Georgia. Bob Shaw’s son was on the high school football team with Ray. The brothers grew up across the street from the grandkids of Catherine Evans, whose cottage bedspread industry was the genesis of tufted carpet, and their parents, Gene and Evelyn Myers, ultimately bought Horizon Industries founder Peter Spirer’s former house. “We grew up around the carpet industry and were in the carpet industry,” says Rick. “We’ve been part of the history of Dalton.”

Working out of a smokehouse on his father’s farm, Gene Myers began collecting remnants from the carpet mills that were starting to populate the area in the 1950s. Having previously worked for a textile equipment company, he was familiar with binding and serging machines and started creating rugs and runners from the mills’ surplus. He sold them at the same “chenille houses” along Highway 41 where Evans’ bedspreads had inadvertently given birth to the carpet tufting process. “The carpet industry in Dalton in the ’50s was starting up, and he saw what was going on around him and thought, ‘I’ll find my little niche in this,’” Ray says of his dad, who founded Dalton’s first carpet retail business in 1957, around the same time that Lorberbaum’s parents started Aladdin Mills.

As the industry grew, so did Myers’ business. He added inventory when Patcraft founder I.V. Chandler gave him his first running line, and he eventually ended up being the country’s largest dealer of Evans & Black, the name for Armstrong’s carpet business. “Back in those days, local retailers had private lines that no one else could get,” Rick explains. “Carpets of Dalton had Philadelphia and Shaw; Beckler’s had World and Queen; Myers Carpet had Evans & Black and Patcraft.”

Being adjacent to the industry offered not only contacts but also intel that Gene used savvily. Ray says that even then, the burgeoning business’s focus was on better-quality offerings. “We knew who was making the best or whose products were the newest and the greatest because we lived in Dalton,” he says. “We were the first to know ‘he’s got a bunch of specials, he’s experimenting with this or working on this project.’ We got the first chance at buying specials.”

The whole family helped grow the business. Ray has fond memories of riding the forklift in the warehouse with his dad and riding shotgun with his grandfather to visit the mills. His grandmother ran the serging and binding machines, and his mother and great aunt worked in sales.

Ten years after expanding with the first warehouse showroom carpet retail store on Interstate 75 in 1971, Gene died at the age of 53, leaving Evelyn to run the business. “My mother was the very first customer to walk into Carl Bouckaert’s office and buy something from him,” Rick says, referring to the co-founder of Beaulieu of America. Still, “it was a man’s world back then,” says Ray. “Mom did a good job, but she was in Dalton. She was one of the only women in the industry.” And so, Rick, having graduated college nine years earlier, left his job at Peachtree Plaza Hotel in Atlanta and moved back home, and Ray joined him upon his own graduation a year later. Neither had necessarily planned to take over the family business, but “we were smart enough to know he left us something to build onto,” Rick says.

Single and in his early 20s, Ray convinced his mom and brother to let him open a store in Atlanta in 1985. It was located in a trendy area near the design school. “I’m on Peachtree Street, and I’ve got basic Shaw and Mohawk cut-pile stuff,” Ray recalls. “It wasn’t going at the rate I was hoping for.” So, when a salesman came in with samples of a wool carpet that cost $90 per square yard, Ray decided to go for it. “I’d never heard of $90-per-square-yard carpet,” he says. “Back then, it was, like, $10 per square yard.” He placed the sample at the front of the store, where it caught the eye of longtime Coca-Cola president Robert Woodruff’s widow. “She said, ‘I really like that carpet. I think I will do my whole house in it,’” recounts Ray. “From that day on, I went high-end. I bought every wool sample and every sisal I could get my hands on.”

Today, between its three stores in Dalton, Atlanta and Nashville, Myers is one of the largest wool dealers in the country. It’s also one of only a handful of carpet stores left in Dalton. “When I moved back to Dalton, I got the phonebook out and counted-there were 130 carpet mill outlets,” Rick says. “There probably aren’t 20 now. The best thing we’ve ever done is to look outside Dalton to Atlanta and Nashville, where high-end business is so much more prevalent.”

Their high-end brand has netted them a different caliber of clientele, he says, one that doesn’t quibble over cost and has vacation homes to update, as well. Myers counts Ted Turner, Elton John and Jane Fonda among its customers. It fabricates rugs for all the U.S. embassies around the world and has provided product for countless movies and television shows. One recent purchase, for The First Lady starring Viola Davis, Michelle Pfeiffer and Gillian Anderson, alone was nearly $400,000.

The brothers are in the process of building a new Atlanta showroom and warehouse/workroom, one that, at 80,000 square feet, they plan to turn into “the premier carpet store in the country,” says Rick. Waiting in the wings is a fourth generation that will ultimately shepherd the family business through whatever comes after that. “Who knows what’s going to change,” Rick says, “but I think there’s always been a market for high-end products.”

CULTIVATE RELATIONSHIPS
Howard’s Rug Co.
Howard’s Rug Co. prides itself on what Rob Hailey, who’s headed the commercial flooring provider for decades, calls “relationship selling.” To nurture this model, whenever Howard’s completes a project, it celebrates with a “victory dinner” between employees and the client. Holiday parties and golf outings with clients are also among the San Diego company’s standard operating procedures. “Even though people say that everybody is working on the Internet and everybody is texting, we are going to continue to try to get to know our customers and continue to be a relationship-, performance-based business,” Rob says. “So far, it seems to be working. We still have loyalty in an industry that looks like it wants to go away from it.”

In the face of consolidation and industry veterans aging out, cultivating relationships is more critical than ever. “We continue to do business based on what I call relationship selling. We don’t want to be just a faceless number bidding on a job to contractors we don’t know,” says Rob. “It feels like a little bigger gamble than a couple of years ago, but I think it makes a lot of sense for us to stay the path.”

Since joining the business in 1976, he has worked hard to build a reputation of dependability and high standards, which his son Jesse is now carrying forward as president of the company. The goal has never been to be the lowest-cost provider, but, rather, the preferred one. “That mentality-high volume, low margin-doesn’t result in long-term business,” explains Rob, who’s added ten project managers, an in-house design consultant and four full-time quantity estimators to strengthen the company’s service and value proposition. “Every week, we talk about how we can continue to do better. ‘What service can we add? How can we help our general contractors and design community do a better job?’”

Howard’s Rug Co. didn’t start out in the commercial market. The company, which dates back to 1943, began as founder Howard Riddle’s in-home carpet cleaning business. In the early 1950s, Southern California hit a massive growth spurt, opening up the field. Meanwhile, more than 2,000 miles away, new products were being developed that would take the industry by storm. With Southern industrialization replacing woven with tufted carpet-affordable to the masses-Chattanooga, Tennessee’s DuPont chemical company created bulk continuous filament (BCF) nylon, offering tufted quality that could finally compete with expensive woven products, and wall-to-wall carpet began its meteoric rise. By 1960, U.S. carpet sales had more than doubled. By 1968, they’d nearly tripled from the benchmark eight years prior.

In 1972, Howard Riddle handed the reins to his son, Don. “He was a creative mind and had some ideas about expansion,” says Rob, who, along with Scott Renning, was brought on by Don in 1976. “He offered us a partnership to open up a store in San Diego,” Rob recalls. “We started cold turkey, not knowing anything about the business, really.” By 1990, the trio owned four retail locations together, at which point they decided to amicably part ways.

Preferring the thrill of the hunt, Rob opted for the commercial route. “I didn’t like waiting around for customers to come in,” he says, adding having to stock samples and advertise to the list of what he saw as drawbacks. “I started driving around and looking for construction projects and developing relationships with general contractors.” Whereas homeowners may replace their carpet once every ten years, a contractor might have ten-plus projects in a single year, he notes, adding that the process is also more straightforward with professional decision makers.

With Jesse now in the driver’s seat, Rob has been able to go back to what he loves as his son takes over the day-to-day. “Now that I’m old enough to decide what it is I want to do, I want to go back to promoting the business and enjoying the process of winning jobs,” Rob says. “Jesse and I have worked together for ten years for him to be ready for this job.”

Still, the process has not necessarily been easy for either of them. It takes some adjustment to mentally quit more than 30 years of responsibility. Jesse, meanwhile, has strived to prove himself not just to his dad-whom he strictly calls Rob in all professional settings-but also to the operation’s longtime employees, based on his own merit. “It can be challenging for somebody who’s been with a company for 30 years to accept direction from somebody younger,” Jesse says. “But it’s something I’ve worked hard to try to overcome and show them that if you do your job, I will let you do what you do, and if I step in, it’s because I need to help.”

Though Jesse spent his high school summers doing odd jobs at Howard’s Rug Co., it wasn’t a given that he would join the family business. After graduating, he obtained a degree in accounting and got a job with PricewaterhouseCoopers in Santa Barbara right out of college. But homesickness set in, and he transferred with the firm back to San Diego. “I kept asking how the business was going, and eventually it just kind of dawned on me that I wasn’t really enjoying being an accountant, and that Howard’s Rug seemed to be in a great spot, and it might be worth giving it a shot,” he says.

Jesse joined the company as an estimator. He spent four years in that position before moving into project management, a role he held for six years. Earlier this year, he took over as president. “I think it would be a disservice to our employees and customers to have somebody else come in and try and run it,” he says. “We know our market, our customers and our employees.” Though, he adds, “The disadvantage of keeping it in the family is I’m the one responsible. I’m 37 years old, and I know I’ve got a long road ahead of me. I come to work every day thinking about how we can get better, keep the lights on and keep the business coming.”

With so much upheaval-between supply chain issues, a tight labor market amid work-from-home options, competition from deep-pocketed conglomerates and a new crop of contractors taught to chase margins-the path ahead will require measured steps. “A lot has changed, but you can be successful maintaining the old values that Howard’s was founded on,” Jesse says. “We work hard to maintain our reputation and our relationships. If those two are strong and something you continue to value, people will continue to work with you.”

For that reason, the family has decided not to pursue other markets. “If you’ve got multiple locations, it’s much harder to concentrate on service, and you become more of a numbers-type business,” says Rob.

REMAIN FLEXIBLE
Airbase Carpet & Tile Mart
Airbase Carpet & Tile Mart officially dates back to 1967, the year Sam Longwill bought the Delaware-based retail operation, but the third-generation business’s origins began decades earlier with his rug cleaning business in New York City. Before the widespread use of air conditioning in homes beginning in the late 1940s, it was common practice to have summer rugs, usually made of braided cotton, and winter rugs, made of wool. Whenever they were switched out, the rugs were sent to be cleaned and stored.

Sam’s father owned a moving and storage business, and Sam got the idea to partner with other moving and storage businesses to handle the rug cleaning portion of the decor swap-outs. Naturally, some of those rugs were never picked back up. People moved, died or simply bought a new rug, and over the years, he accumulated a large inventory of unclaimed rugs.

“He put an ad in the paper that he had unclaimed rugs, and people came flocking in and buying the unclaimed rugs,” recounts his son, Richard Longwill. “That’s a hell of a lot easier than washing rugs. It became such a big business that he had to mix in new stuff.”

After figuring out how to automate the cleaning process-“He was one of the first people to automate, where you fed the rug in one way and it came out [clean],” Richard says-Sam merged his now multiple-location cleaning business and began a small retail operation out front. “His trucks would stop at every dry-cleaning plant and pick up the rugs,” says Richard. “The retail end of the business started growing to the point where he had one store on Fourth Avenue and 18th Street, he had one at the plant on Dyckman Street, and they were still getting a tremendous load of unclaimed rugs.” So, he ended up taking rugs to Delaware, where he knew a man with a successful carpet and rug store on the New Castle Army Air Base.

On one trip, the man announced that he and his brother were leaving the business. With hundreds of rugs already piled in the back of his truck looking for a home, Sam bought the retail operation for $2,500. That was in 1967. “I got a call from my father: ‘Can you help me?’” says Richard, who was working as a toys and housewares demonstrator in California, where Sam had operated other rug cleaning and retail businesses before selling them off-the last of which came with the caveat that they could not go back into business in California. “I sold my house to my brother and moved to Wilmington,” Richard concludes. With the advent of wall-to-wall carpeting around the same time, Sam sold his original rug cleaning business to a company in New Jersey and focused on retail.

Richard’s experience marketing new products helped them grow the business. “Utilizing TV to promote your product, as I look back, you couldn’t buy the value of that experience,” he says. Though now retired, “To this day he is still offering creative marketing and merchandising ideas to expand the business,” says his son, Michael Longwill, who now serves as company president.

Michael joined the business in 1988 and was tasked with streamlining operations. “My grandfather and my dad engaged in mergers, acquisitions and opened new stores in many different markets,” he explains. “They even purchased a carpet mill, Aldon Carpets, in the ’80s. However, with consolidation at the mill level and with antiquated equipment, they decided to close the manufacturing part of the business.”

With the dream of becoming a big Wall Street broker, Michael had gotten an MBA, but the “Black Monday” stock market crash in 1987 cast a shadow over his chances of becoming a well-heeled financier. “It fell to me to consolidate the various retail stores and partnerships that my father and grandfather created, to make a more efficient and competitive company,” he says. Faced with increased competition from national chains like Home Depot, Lowe’s and ColorTile, he also diversified the inventory. “We had to increase our product mix to include all of the new hard surface products as customers demanded much more than simply carpet,” says Michael.

Airbase now serves the Delaware, Pennsylvania, Maryland, south New Jersey and South Carolina markets, and is set to open its 15th store near Exton, Pennsylvania this year. It is not clear whether a fourth generation will take the helm, but Michael’s son, who’s 19, has expressed some interest and will spend this summer learning the ropes.

Whether it’s a new generation or another succession option that carries Airbase forward after Michael, the correlation of fresh ideas and longevity illustrates the oxymoron of business: that change is the only thing that doesn’t change. “The route to success is to find a need and solve it,” Richard says, adding, “[Your niche] has to be changeable as fast as you can stand up.”

Copyright 2022 Floor Focus

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