Focus on Leadership: The Floor Store CEO Larry Flick has a passion for retail flooring – July 2022
Interview by Kemp Harr
Larry and Kelly Flick started The Floor Store (TFS) in San Francisco in 1986. Today, the business has nine locations across the area, serviced by two distribution centers, and totals $65 million in sales annually. And the Flicks aren’t finished yet. They have a goal to open a new location every 12 to 24 months. With 95% of business in residential replacement and the remaining 5% in mainstreet sales, The Floor Store has found success by identifying its niche and, thereafter, staying in its lane and leaning into its strengths.
Q: How did you end up with a career focus in the flooring business?
A: My father, Robert Flick, Sr., was a manufacturer’s agent-one of the best. He represented many of the top carpet mills and was Horizon’s first and only salesman the first few years it was in business and remained for 18 years. I went to work for my dad when I was 20. In the early ’80s, my brother Bob and I left our dad and started importing wool Berbers from Europe and eventually started manufacturing olefin Berbers in Dalton. The name of the business was InterLoom and Belmont.
Q: What motivated you to leave the manufacturing side of the business in Georgia and start a retail flooring business in the Bay Area?
A: Prior to my brother selling InterLoom to Coronet, I decided to try my hand at retail. I was going to open a store in Princeton, New Jersey and was having dinner at The Cellar in Dalton with Richard Longwill, owner of Airbase. I told Richard my plans to open in Princeton, and he convinced me that I was making a big mistake-that there were lots of stocking dealers in New Jersey and few to none in Northern California. I flew to San Francisco a few days later, and the rest is history. Richard, thank you!
Q: Tell us about the start of your retail venture.
A: My wife, Kelly, and I opened our first store 36 years ago. It was 10,000 square feet, with great freeway visibility, located in an old factory where Jacuzzi tubs were first manufactured. We started with 120 rolls of carpet and over 1,000 remnants. I would purchase off-goods in Dalton, taking the red-eye back and forth whenever I needed to replenish our inventory.
Richard was right; at that time we were the only stocking dealer in San Francisco. My competitors would stop by and tell me that if I didn’t raise my prices I would go out of business. They didn’t know that I was selling off-goods and making 50%+ gross margins. I started the business with $55,000, and my father and brother helped me secure lines of credit and extended terms. The concept was a huge hit. We shipped $2.2 million in goods our first year at very high margins. We still have the original store but have expanded it to over 22,000 square feet. As we grew, we continued to stock but haven’t purchased off-goods in years. We now import products from Asia and Europe, including Turkey and India.
Q: How did your early days on the supply side help you be successful on the retail side?
A: Having lived and worked in northern Georgia was a huge help sourcing goods and getting favorable terms. Relationships are as important today as they were 36 years ago. It’s still a people business.
Q: Successful businesses usually have a mission or purpose. What is The Floor Store’s?
A: Our core values are work hard/have fun; be creative/solve problems; be motivated/be adaptable; care/give a damn. Our core focus is helping families turn their house into a home, and our niche is providing hassle-free flooring solutions with a personal touch.
Before hiring, we spend a lot of time discussing our core values to see if the potential hire is a good fit.
Q: Most flooring retailers use supplier-provided displays. Your stores have a different look, which includes product vignettes. Tell us what you’ve learned about having a limited offering that you support with inventory.
A: All nine of our retail stores are Floorscapes and Karastan Centers. Approximately ten years ago, I was having a hard time deciding ‘who’ The Floor Store was and what part of the market we should focus on-low, middle or high end. I asked a close friend, Bill Harrison, who is an investment banker, to help us write a five-year strategic business plan. We spent months writing the plan and ultimately decided to focus on the middle to high end of the market. We consider ourselves the Nord-strom of the flooring industry. Writing the plan was one of the better business decisions I’ve made. We know exactly who we are and focus 100% of our energy on our niche. Emulating Nordstrom is not easy; when we have a complaint, we fix it regardless of the cost. It can be very expensive, but we have a reputation for taking care of our clients, and charge accordingly. We empower our sales staff and managers to do whatever it takes to make sure things are right for the customer.
Q: Tell us more about your inventory strategy.
A: Surprisingly, 60% of what we sell is stock, and most of our stock is high end. For instance, we stock 29 styles from Karastan and also stock carpet from Fabrica and Masland, as well as a significant amount of wool. Hardwood is a huge category, representing over 30% of our business. We import European white oaks from Asia, exotics from South America and truckloads of oaks, maples and hickories from the U.S. We are also one of the largest stocking dealers of Coretec in the country.
I’ve always believed it’s better to do a lot of business with a few vendors, rather than a little business with a lot of vendors. We give 90% of our business to five vendors, so we’re important to all of them. Our sales team is very aware that our competitive advantage is our stock. Our team knows that they can sell stock for the same price our competition pays for a product and still maintain excellent gross margins.
Q: Tell us about your merchandising philosophy.
A: When it comes to our showrooms, I believe less is more, so our showrooms are sparse. There is a lot of white space between racks, and our philosophy is if we bring in a new rack, something has to go. There is nothing worse than “creep” in a showroom; it overwhelms our clients as well as our salespeople. If you do your homework, you can have three, maybe four, LVP/LVT vendors that cover the entire category. We have wood walls in our stores where we show very large samples of stocking wood and LVP/LVT. We show actual stock in a few of our stores, but most stores are high-end showrooms that are upgraded every few years, which is expensive and time consuming, but you have to walk the talk.
Q: How do you stay on top of the digital tools that can be so important for a retailer’s face to the consumer?
A: Digital tools are so important today. Lead generation is a top priority, and my wife/business partner, Kelly, heads that up. Having a good CRM system is paramount; ours, which we are very pleased with, is integrated with QFloors. We spend approximately 4.5% of top-line sales on our advertising budget. Purchasing TV, radio, print, streaming and digital is a business unto itself, so we use Mighty Media and Mobile Marketing to buy our time. The number of “bonus” or “free” spots we earn from the advertising agencies more than pays for the amount they invoice us. Our philosophy has always been to open stores in the same marketing area, so our advertising dollars are spread out amongst all of our stores. We can open one or two more stores in the Bay Area, and then we will have to move to a new marketing area.
Q: Sustainability seems to be important to people who live on the West Coast. Is it a factor in your market when it comes to what products consumers pick?
A: Sustainability is certainly a factor in our region, so we stock everything from cork to bamboo. We find clients are willing to pay a little more, but not a lot more, for sustainability.
Q: You have over 150 employees. How do you get them all in the same boat, rowing in the same direction when it comes to brand promise, customer commitment and what products to feature?
A: A little more than a year ago, I realized that we hit a growth ceiling and had to reorganize. Ten years before, we wrote our five-year strategic business plan but hadn’t followed it up with another plan. Our organizational or accountability chart was based on a company doing $35 million in sales, not $65 million, which we’re on pace to do this year. So, four months ago, our leadership team started implementing a new operating system, EOS. I’m very pleased with the initial results, but it will take us at least one and a half years to implement it completely. With so many employees, it’s imperative that TFS’s core values, vision and goals are understood and shared by everyone on our team.
Q: Tell us about your role at TFS.
A: I’m the CEO of TFS. In many ways, the bigger you get, the easier it is to run your company, provided you have the right people in the right seats. Kelly and I are blessed to have so many amazing people in this company. The Floor Store is not a stepping stone for them, it’s a career. In fact, if you haven’t been with us for 15 years, you’re considered a rookie. One of the reasons we’re motivated to grow is that we want to give greater opportunities to the people who helped us achieve our success.
Q: What are the core ingredients of your success?
A: I attribute 100% of our success to our staff-from our leadership team to our warehouse staff and everyone in between. They’re the best, period!
Q: Who are your mentors, and what did they teach you?
A: I’ve had a handful of mentors, but my dad stands out. He loved business and had an amazing work ethic. He worked until his late 80s and only stopped because he had to give up his driver’s license. He loved his clients, and they loved him.
Bill Harrison is another mentor; he sits on our board and is a brilliant businessman. He owns a merger and acquisition firm that specializes in retail and keeps me abreast of emerging trends and fresh ideas-definitely the smartest guy in the room.
Q: What do you do for exercise?
A: I’ve always been a bit of a gym rat. People who know me know never to call on me from 11:30 a.m. to 1:00 p.m. because I’m either in the gym or practicing yoga. A good sweat clears my brain and makes me feel like a new person. My other two passions are snowboarding and off-road adventure motorcycle riding.
Q: You are a member of the National Floorcovering Alliance (NFA). When did you join, and how has that relationship helped your business?
A: We became members of the NFA seven years ago. No question, it’s one of the best decisions I’ve ever made. The friendships, exchange of information, camaraderie and, of course, rebates have been outstanding. What an amazing group of businesspeople! I literally reached out three times last week to ask members questions and got answers back immediately, and that’s what the NFA is all about.
Q: How do you balance your work, family and social time?
A: Thank goodness my wife and I started the business together, because we spend way too much time working. We’re both passionate about what we do. Our son Dakota, who is 30, has been involved in the business for five years, so we get to spend most of the day together. I don’t think we will ever retire, but we have a great leadership team we’re grooming to take over day-to-day responsibilities in the next few years.
Copyright 2022 Floor Focus
Related Topics:Masland Carpets & Rugs, Mohawk Industries, Karastan, The Dixie Group, National Flooring Alliance (NFA)