Charlie Malouf is the CEO of Broad River Retail, a top 50 retailer operating 24 Ashley HomeStores in North Carolina, South Carolina, and Georgia. He’s purpose driven leader whose focus on culture and people shines through in his business.
The associates at Broad River Retail are called Memory Makers and the company holds an annual event called “Purpose 8/28” where they invite leaders to inspire their team and expand their perspective.
Charlie believes in the power of moments and focuses on how to win in transitions. Get your pen and paper handy because Charlie Malouf delivers ideas you can put into practice to become better in business and life.
Full Transcription:
Mark Kinsley:
So nationwide marketing group going virtual this year, it’s a big announcement. It’s a big deal. It’s a big change October 27th to the 29th. Though, it’s going to happen. It’s free for all nationwide members. So go to nationwide primetime.com get the details get signed up. I mean, here’s what I was talking to Whittaker, Mike Whittaker, Mike would be Mike Whittaker, there are still yet to be lots of surprises. So just because it’s a virtual conference doesn’t mean it’s going to, Hey, how you doing? I’m talking to you, I’m giving a speech and you’re done. No, they’re going to be surprises along the way. So tuning in live is going to be a key piece of that.
Mark Quinn:
So is one of those surprises him wearing a purple dress.
Mark Kinsley:
That’s already been done?
Mark Quinn:
Well,
Mark Kinsley:
Then that already happened at some point during our speech.
Mark Quinn:
So, last comment for you if you’re listening to this, and you’re thinking about nationwide consider this the trip is free, right. So the event itself, you don’t have to pay for but the trip is really free because the stuff that you learn while you’re there. When I did Kinsley and it pays for everything because you will pick up that much information. So check them out nationwide primetime event in October 27 is my sister’s birthday. I think they moved it just for that.
Mark Kinsley:
Happy birthday, Carrie.
Mark Quinn:
It’s Podium. So it’s kept us connected. We actually signed up with put him a year ago because they showed us the level of engagement, a graph of the level of engagement with their, the way they do it versus other live chats. In the day, we signed up, we saw it the first day we got three the first day. And it stayed very consistent after that, but when the pandemic hit and everything shut down, suddenly went from three to like 15 a day. And not only that we realized in the store we weren’t wanting to pass out cards to people because with the pandemic being so fresh and information not really out there. We didn’t we didn’t want to be passing things around. So we just ask people, hey, is it okay if we text you the information and they’re happy to just see it on their phone and be all set with shopping on their phone? Good. I even noticed to a lot of times when people were leaving the store, I would send them their quote over text and then send them a link to purchase and say something like here’s a path to purchase. And it was very easy and intuitive for them to go home. Think about it, decide purchase it and the next day you come in and you’re just reserving everything getting it ready. Because in the end, that’s what they wanted. They were able to do the research and they could buy it the moment they wanted it. They didn’t have to wait for your phone call. They didn’t have to wait for your store open. That is Andrew Matt man schlesser from Sweet dreams mattress and furniture in North Carolina. He said it all just go over to Podium.com Ford slash dos. Podium.com Ford slash Dos to get 10% off and to get signed up and get connected and be connected. That’s what Podium is all about. Podium.comm ford slash Dos.
Mark Kinsley:
We’re joined on the show today by Mr. Charlie Malouf. So the CEO of Broad River retail 24 Ashley stores now is that all over the North Carolina area or like what’s your geography?
Charlie Malouf:
You go straight there. Yeah, I don’t even get to say hello.
Mark Quinn:
Why is your name Charlie and why did you name the stores Ashley if your name is Charlie, that’s what I want to get to the bottom of right away.
Charlie Malouf:
Let’s get straight there. You know, it’s a it’s a great it’s great. Let me tell you this is my first ever mattress podcast. It’s my first ever mattress podcast. so It’s awesome to be here. Let’s figure out what you what’s up Mark Quinn and Mark Kinsley we’ll just go with Q and K or Quinn and Kinsley Let’s go didn’t call. I’m not really sure. But it’s a pleasure to be on the DOS Marcos podcast. All of our stores are in North Carolina, South Carolina and we we dip into Georgia with our a gusta store.
Mark Kinsley:
So we came across you so we saw you at the furniture today bedding conference and did a great job interacting with some of the other people in our industry and I just really enjoyed seeing that group of people come together even though it was virtual. And then we had Dr. V on the podcast and Dr. V of course with MisKelly’s and central Mississippi. You can go back and listen to the episode but he said you’re one of his favorite people. And you should really be on the dust Marcos podcast and so we got connected with you. And that’s a glowing endorsement. How do you know Dr. v?
Charlie Malouf:
Well, I would say the same about Dr. V that you just said that. I would say he’s one of my favorite people. I love to know Dr. V is to love Dr. v. And I will defend them. If anyone says a word again, otherwise, but Dr. V, the way I like to explain it taught me everything I know about selling light white boxes, about selling mattresses. And, you know, I’m Miskelly’s. I’m very familiar with them. Because for a couple reasons. I’m from Jackson, Mississippi. So I’m from Central Mississippi. They’re obviously very well-known there. I grew up born and raised there. Shout out to Jay town. And Dr. V. My original business partner, how I got into the furniture industry was a nephew to the Skelly brothers. So Jonathan ishi. his uncles are the MisKelly’s. And so Oscar and Tommy and chip and I probably stay a lot more in touch with Oscar and Tommy these days. But Jonathan, and we’d go on site visits to learn from them. And they come to see us to learn from us. And so we grew up sharing best practices with their company and their organization for many, many years and still stay in touch. And so I you know, we’ve actually had Dr. v. To one of our events. We really took it up a notch last year for our original purpose 828 summit, I had heard a podcast interview that Dr. B did with a bill MacLaughlin on the science of selling sleep with purpose. Well, maybe that’s the title we use. But he did a an interview, I think it was at the 2019 betting conference with Bill McLaughlin. And just, I loved it. I mean, I listened to that podcast a few times, I shared it with our people. And I said we’ve got I’ve got to get him to our organization. And so when we did a purpose 828 event and synced up with our leadership summit last year, about a year ago today. We brought him in and for folks from Miskelly’s. And he presented for like 90 minutes to our people on the science of selling sleep with purpose and going all in and then sharing a lot of their ideas. So he’s, um, he’s an incredibly smart guy in the mattress industry, and very well respected. And I love him.
Mark Kinsley:
I actually just had a conversation with him this morning, because I had a new retail account and this retailer was trying to figure out sanitization and process and I just went to school this morning with Dr. V. I have like pages upon pages of notes and he was just a very, very given guy and he’s very knowledgeable on this just a fun person to be around on top of that.
Charlie Malouf:
Absolutely. He has a plethora of knowledge that he openly and willingly shares. And so, you know, if you get a curious mind, and you’re open to learning, I mean, he’s a great teacher. So I, you know, I’ve learned a lot from them in all truth, truthfulness, and seriousness. Even its terms of like, how to position lighting in a mattress gallery, so it doesn’t get in the the guests eyes when they lay down, you know, just or the type size of mattress that you might want to have in the mattress gallery, based off of the type of mattress it is, I mean, just going down to the that root level, like I’m going back 12, 14 years of just tips and strategies that he that he taught us and taught me that we deployed and worked in work to our advantage to boost your sales.
Mark Quinn:
So Charlie, you’ve built a heck of a company there. And when you got there, you were not the majority owner, you had bought an interest in that. Can you tell us a little bit about how that started for you and then continuing on to where just you know where you’re at today? Or like what was it that allowed you to get where you are today? Because the path to get there had to be riddled with challenges and frustration and doubt. Maybe even can you just tell us a little bit about when you first got there and your journey to this point?
Charlie Malouf:
Yeah, I got into furniture the way most people do the technology in Mississippi. That’s my joke. My mind. I’m waiting for my you might see your reaction.
Mark Quinn:
Well, we were waiting to make sure it was okay to laugh.
Charlie Malouf:
Ah, so it’s a really interesting story. And I’ll even go back to, I mean, I knew Jonathan ishi because he worked for an advertising agency in Jackson, Mississippi. And I had a technology company that was doing like a business. We are an E business shop. So whether you need search engine marketing, online marketing, website development, email marketing or e-commerce, you know, we did it all in The state of Mississippi for customers and we partner with a lot of advertising agencies, because they may have had the clients and the clients who had the need. But they did a lot of the graphical work and not kind of programming under the hood. So we we hired a lot of programmers from the University of Mississippi from Ole Miss at that time, and we put up a development shop in Oxford. And then our sales office was in Jackson. And so we really just sold throughout the Mid-South, if you will, but we partner with a lot of advertising agencies, because they would bring us in for their, like the, under the hood programming work, if you will, to help the this This goes back many, many years ago, but Jonathan worked for an advertising agency, we were doing a lot of projects together, we got to know each other. And we kind of always talked about, hey, wouldn’t it be cool for two kids, you know, in Mississippi to kind of start a business together. I remember he tried to get his advertising agency, he tried to broker revealed him to get them to acquire my my web development shop and spin us off because he worked in the interactive department of his agency. I think they just kind of appeased him with a meeting that didn’t really go anywhere. But he ended up going to Vanderbilt to get his MBA degree. And we just stayed in touch through his that he couldn’t, I’ll give you a little bit about his story, because it goes into the founding of our company. He couldn’t get an interview, like his classmates advantage with the investment banks at the time. And so they’re getting these great. Plus job offers, you know, coming out of grad school, where he didn’t have enough experience, because he went to Vanderbilt at a young age, with a little bit limited experience relative to the typical MBA student. And so he his uncle’s said, well, hey, you ought to talk to the guys that Ashley furniture, they’re starting up this home store concept. And at the time, Jonathan had sold furniture at mascalese. And he really liked selling Ashley, he thought it was kind of an easy brand to sell it connected with the gas, the customer, they kind of got a value proposition. So they you know, Oscar and chip said, Hey, we’re not gonna give you money, but we’ll help you make a connection. And so when, so he went back to Vanderbilt got a buddy of his, and they wanted to start a business together, they looked in the southeast and kind of looked at Birmingham, Raleigh, Charlotte, they settled on the Charlotte market, someway, somehow they kind of convinced Ashley to give them the rights to the Charlotte market. You know, these were two like 20 something year old kids who had no business experience, but they you know, believe that in the skellies would kind of be heavily involved in at least that’s what they told them. So they got the race to the market. So Jonathan, I stayed in touch, I came in like, November 2003. And he remember him telling me at that time, hey, I think I’m onto something big here, I’m on the ground floor of what the next McDonald’s is, he would explain it to me. But he was really proud of that, that that store, and like every square foot matters, and, you know, and all about the whole science of retail, and a lot of stuff that like Oscar was like teaching him at that time. And so, um, you know, but they had a lot of first year struggles, like all businesses have struggles. And, you know, but their business plan called for them to open up a second store. So they got through their first year struggles, they survived it, they open up a second store for the economies of scale, in the north part of Charlotte. And then that thing they saw was getting to be a little bit too big. And they had an opportunity to acquire a store in Greenville, South Carolina. And so that’s when Jonathan started kind of reaching out to me. And I said, Well, I don’t know, this was the end of 2004, beginning of 2005. And I said, I don’t even know anything about furniture. I’m in the technology business. And I love it. And I’ve got I’ve had my business now for five years. And like, it’s been a long haul, but finally, it’s starting to we just signed some big contracts a couple quarter million dollar contracts with some big universities and construction companies, like I’m good man. But you know, he kept he kept kind of reaching out, and I came to visit them. And he put an offer in front of me to buy in as an owner and it you know, for me, it was as much a spiritual calling as it was a business calling, but it was a good business deal. And, you know, I had taken some risks borrowed some a little bit of money from my mom and my dad and my brother at the time, and I wanted to kind of de risk my personal situation and pay them back. So you know, and it was a good enough deal to get in with these guys. So, literally, I sold my company I sold my house, I sold everything I owned, I even broke it with the girlfriend I had at the time. I left a place that I knew and I knew kind of everyone there and industry I knew and this was an I started with Jonathan and Jackson may one 2005 Um, you know, I, the biggest joke that I would say in my life that the man upstairs has on me is I hated shopping growing up, like I literally hated shopping, I just want to play sports or video games or whatever. And, but the fact that I’m in retail, and I love it, and I’ve, you know, found a passion in this industry, I think is that you can find a passion and really any industry. And so, so I joined the day that we acquired the Greenville South Carolina store on May one 2005, as our managing partner and Chief Operating Officer in, I’ll just continue just for a bit. Then Jackson had a kind of a five year plan. And so he was a couple years, two or three years into that. So eventually, after five years, he wanted to move back home. So Jonathan, and I bought him out, you know, right, right around the stock of the Great Recession. So I don’t know, his timing was really good. No, it wasn’t as good. But that’s, that’s kind of how I got into it, I guess.
Mark Kinsley:
So you really kicked off things. You said may 1st 2005, hit the ground running ran into the recession. Fast forward, we’re in 2020, but hit us with some of you know, the key kind of turning points for the business are some of your favorite memories that pepper that path between Oh, five, and in right here in 2020?
Charlie Malouf:
Yeah, there’s been quite a few. Um, so. So, you know, the great recession was one I remember in 2008, or nine, whatever it was the, our phrase was all about how do we make our runways longer? And so how do we cut back expenses, and then we did some really goofy stuff that I would not advise. And we tried to have a single manager cover two stores, or three stores like I don’t, we’re just trying to cut. We didn’t think that we could raise top line. And we’re literally on a per store basis. Top line got cut in half overnight. So for us, it was like what can we do to extend our runway? And I will tell you, like what really saved us in oh nine was growing into new markets, like our bank right then was, and even Jonathan at the time didn’t want to grow because the banks would saying, hey, the world’s going to hell in a hand basket Hold on, which got me is pretty scary at the time, especially for big ticket items. When, hey, a lot of our customers who had like opened by accounts, they didn’t have any more access to credit like they were, they reduced all their accounts. And you know, and then we couldn’t get anyone approved. And what we realized was from, oh, 3 to 7, it was really just an artificial bubble. That wasn’t reality. And so now here we are with not even reality sub reality, all but we just had to kind of get it get it through. But um, the most inflexible cost at retail is your occupied occupancy cost, right your rent. And so we went into new markets, we’re finally as a retailer, we had leverage and in the in the landlords had all the leverage from Oh, 3 to 7. But now we could sign deals that could dollar cost, average down our occupancy cost, without cannibalizing our current revenue. So that’s how we went into Columbia, South Carolina. That’s how we went into Augusta, Georgia. That’s how we went into Hickory, North Carolina. And ultimately, that’s how we went east to Raleigh Durham, Fayetteville, through a strategy that was from oh nine through 15, which was growth that add to the stability of our company, to protect all our lives and families who depended on the company. That’s what how and why we grew through that time, was really through that, or maybe oh nine through 13, or 14, was how we looked at it. Because we were actually not named Broad River retail, we were named a couple different operating companies. And when we crossed over the Broad River, Jonathan really liked that connotation of a slow and steady constantly moving River. And so that’s kind of how we rebranded our corporate image, initially is Broad River furniture. And then there’s a story about how we put the word replace furniture with retail, a couple years ago, so that was, that’d be one story about making our runway longer. And then I would say, in 2015, we had another kind of a event that almost took us under we broke all of our bones in the first half of 2015. We were proud, pretty proud company above average company, I would say, up until that time, you know, slow and steady growth, and we’ve done an ERP conversion. And we were ill prepared for it both on people in process. And, and so we did not go well. We are completely off the rails. And we lost a lot of money in the first six months of 2015. We were also building our new campus around that time that was a capital intensive project. And so through a confluence of events, we found ourselves in a very dark spot by middle of 2015 and that’s actually when I took over the president and CEO role was the end of June beginning of July 2015. And so I kind of had this idea of, well, when presidents come in office, they talked about what they got done in their first 100 days. And so I knew we needed to get some momentum, generate some momentum, because we have people who are tired, who lost a lot of money, we were in a world of hurt. And I knew about like this concept of 90 day challenges. So we came up with this concept of our 100 Day Challenge, we call it our bold reset, we just kind of changed the paint, we changed everything all at once, got different people off the blast different people onto the bus change titles, and we had just had this period of creative freedom to really reset, recalibrate, and that really kind of helped pull us out of the muck and returned, return and restore to profitability. You know, and then I would say in 2018, you know, I think, after a long time of being great business partners together, Jonathan was ready to move on to another chapter in his life, and we’ve kind of stabilized the business and, and continued to grow the business. And we brought on a couple other operating partners at that time. And so we just kind of said, I think it’s time for us to, we don’t want to stop the journey that we’re all on. And so we worked out an agreement with Jonathan. And I think it was a pretty amicable deal, too, for me, and Manny Rodriguez and Charlie workman to buy 100% of the company from Jonathan at that time. So that is June 2018. So those were a few events, I guess. They’re Sure, Natalie, I’m doing what I didn’t want to do. I’m getting long in the tooth. I’m sorry, I will try to get shorter, more terse answer. Yeah,
Mark Kinsley:
No, this is this is good, because we want people to hear some of the stories behind the stories and understand, like you said, in 2015, you know, you had a period of time where you’re looking in the mirror, and having to probably make some really tough decisions, and, and some painful ones.
Charlie Malouf:
Well, I’m gonna not go into too many details, but it felt like for about 11 months, we woke up with a gun pointed at us. And so we had to learn to, regardless of that, control, what we could control, put a smile on our face, and get through it. And so we did we survived, we maintained our we learned about grit, resilience and belief in and it’s a beautiful turnaround story from where we were, because we almost got folded up or went away. And, and the bankers and smart money would have said that we didn’t deserve to stick around. And we’re very proud of that turnaround time of our history.
Mark Quinn:
One thing about your story that I loved Charlie is that at a time, if you remember back in 2008, I mean, it was dire. I mean, it was a big deal. And I remember the gravity of that the emotion of that. But yet, in light of that you lean into your business, go to the banks, and put even more risk on yourself and pressure on yourself and decide to expand when everyone else is contracting. But then I’ve also heard that even during the COVID time, when people were trying to just figure out whether or not they’re going to get out on the other side of it, you decided to start buying and filling up warehouses, and nobody is it. So I think I have that right. And nobody was probably doing that. Because everyone was probably trying to figure out how they were going to look on the other side. What is it about those two examples like, where you just kind of feel like when the market maybe is going one way you decide you have to get what inspires you to make those types of decisions?
Charlie Malouf:
Yeah, I love this topic. I’m gonna have fun answering this question for you. First of all, I think you have to have a point of view. And I think my point of view is going to get tested over time. And I don’t think that point of view is something that you can be willy nilly. It’s got to be it’s got to be, it’s got to simmer, it’s got to be a crock pot, it’s got to have developed over a long period of time and a lot of inputs and experiences. But once you get a point of view, you believe in your point of view, don’t let the way the wind blows change your point of view. So one of our points of view is the power of people the power of retail, the power of our business model. And so yeah, there’s a quote from I really like this quote from Bill Gross. He’s a really famous venture capital and investor. And so it goes a little bit like this. I may butcher it, I’ll try not to, if you can take a contrarian view and be right, that that that can have your biggest payoff your biggest return on investment. And so, you know, if people think the world like, you know, but you cannot be Right, right. So that’s, that’s risk. And so you just have to also understand the risk you’re willing to take. And you know, from the outside in, I mean, I guess risk is a matter of perspective. But also, you got to know your numbers and you got to understand Are you Are you truly like taking a risk, sometimes the risk is inaction and not going forward, like, look at Jeff Bezos, I mean, how much of a risk taker is he but, but if you look at their financials, and understand how they look at the business, he probably understands that risk better than most. And so we don’t believe that any of our risks are going to put us in jeopardy of hurting the mother ship. But some of the risks if we don’t take them could and so I guess it’s just a different perspective, or vantage point of risk, per se, but like it with regards to COVID, you know, we were opening up a second distribution center. And so it was an opportune time to bring in inventory, it was either gonna work or not work. So we did continue to load up and get to our, I’m glad we did, because that helped us have a really successful second quarter when we thought it was going to be break even at best. And we were prepared to lose millions of dollars and set the second quarter, it actually was our most profitable quarter we’ve ever had, and how do we not make those investments in inventory? It was like, Okay, are you sure. But if we hadn’t done it, it wouldn’t have worked out that way. But also, we’re long term, like, if you notice, it’s a matter of what’s your, what is your Outlook, and is it according quarterly outlook, or a quarter century outlook. So we’re willing to take a really long term outlook, that’s why we bought the business. And so over a long period of time, you know, we just believe in the power of retail, especially in our industry, now, if we were selling, you know, compact discs or something, maybe, maybe that wouldn’t be the right strategy to have. But we believe in the power of retail for what we’re doing. And so we understand, like the replacement costs, and some of these properties, and, and, and we’ve also got a lot of replacing a lot of small bets, if you will, and not all of them are going to work out, we’ve got a litany of failures along the way. But you can learn from those bets, and then you and then the ones that work out, you keep pouring gasoline on them, and they keep kind of blown up for you. So we got a multitude of simultaneous small bets being placed at any given time. But our point of view is our strategy towards growth. And we do like, we believe that healthy organizations healthy people grow. And we think that growth is energizing. And so but we want to grow not just on the top line, not just for growth sake, we want to grow the bottom line, too. I mean, I think a good a good goal to have is to have double digit top line and bottom line growth compounded annually year over year. And we’ve been able to achieve that
Mark Quinn:
Literally just make a comparison with compact discs. Is that what he said?
Mark Kinsley:
Compact this in compound growth.
Mark Quinn:
Come on, Charlie, of all the products you could have brought to us in that moment of that great explanation. You pick compact this.
Charlie Malouf:
What should I have gone with? I can’t, I’m not.
Mark Kinsley:
By the way, you might have just done a lot of people a favor, because I think if you would have said CD, yeah, somebody will be like, what’s the CDC?
Mark Quinn:
I don’t even know that.
Charlie Malouf:
I’ll tell you a funny story one time. A while back, I was at home for a holiday or whatever it is many years ago. And I was just not thinking so I was watching a movie with my brother and sister. And the movie was over. And I said, I will rewind it. And they just all looked at me real funny. He said, it’s a DVD What are you talking about?
Mark Quinn:
But are you 100?
Charlie Malouf:
Yeah, right. Everyone was thinking, we got to get back to the video store.
Mark Kinsley:
Be kind please rewind here. So Dr. V, you are a user of door counts. Let’s talk about how door counts, links up foot traffic coming in your store with selling process and follow up?
Charlie Malouf:
Well, years ago, I read a book by John Locke. And I love the way and one of his big taglines was you can improve it unless you can measure it. And that in and of itself is just such a great concept. Now it’s obvious, but you need to have the benchmark. So one of the reasons why we chose to go with door counts was to get a really good accurate measurement of our foot traffic when they come in. And so that was the big thing initially with we found it to be so much greater value than death, because our salespeople use it to be able to capture the information for our guests when they come through the doors. We actually get a photograph of them, it comes right up on the door accounts, we know exactly which salesperson is going to be assigned to which guests when they come in, you know, one of the biggest complaints you sometimes get as a guest that goes, You know, I came into your store, I walked around for 30 minutes, and no one ever approached me. Well, we don’t deal with that anymore. Because with door counts, we’re able to capture their picture comes right up on the laptop, we know which salesperson has been assigned to who, and therefore we don’t lose them. In that sense, we’re also able to capture their information, we’re also able to email them back if we know we got a particular promotion coming up, attracts or close ratio. Once again, if we can track it, we can improve it.
Mark Kinsley:
We’re talking to Charlie Malouf, CEO of Broad River retail. Charlie, you mentioned this early on, and we kind of skimmed over it. But I want you to tell us about purpose of 828. What is that? And what goes on?
Charlie Malouf:
Yeah, well, I have to give you a couple of elements of backstory. So Oh, limited, we believe in a word of the year, or a theme of the year. So we’ve had some of our words of the year have been belief, grit impact during 2017, which was our word was impact, we actually want actually won the National Impact Award, which was pretty cool. From furniture today, at the time, and then premiere, which pegs to our vision statement to be the premier actually home for operator. And then your last year, our word of the year was purpose. And so the other kind of little backstory is we’ve had leadership summits. And yeah, we think that companies that invest in leadership and their leaders, they data will say that they outperform their competitors, by up to 13 times in key performance indicators and other financial metrics. And so we always want to invest in our leaders. And so we’ve had leadership summits in the past. And so during our year of purpose, we use the time that we would have normally assigned to our leadership summit, to be a purpose summit. And we were, you know, I thought it would just be called purpose summit. And then, you know, we had a purpose activation committee during that whole year or and we actually started a few months before, but we said we had a purpose activation committee. So we were trying to activate purpose, we had a four pronged approach. And one of the phase four was activation. So we want to hold ourselves accountable to what we say and not just be words that be words we put into action. And so we had our Pac Pac, but they didn’t like the word purpose of it. So we’re trying to come up with a different name for it. And literally, I was in church, and what one of the verses they talked about was Romans 828. And just so happened that our purpose summit was going to be on August 28th. And so we were inspired or I was inspired by Romans 828. And the fact that it was on August 28. And so we call it purpose 828 was the name of our purpose summit.
Mark Kinsley:
Very cool. So when you get together for purpose summit, what happens to your people because I you know, one of the things I picked up on from the very first email that we exchanged, was there is a deep sense of purpose rippling through your organization. And I know that because you had a video at the bottom of your email signature, and the video was your people on camera, talking about the purpose behind what you do and making it for
forefront.So talk about that culture that you’ve created and what that means to you and what it means to your people.
Charlie Malouf:
Yeah, I just realized that also, to answer your question exactly, not what purpose 828 it was, we had a bunch of purpose speakers who we’ve been reading and following, and we brought them in to invest in our people. I want to go back just to just a hair. So in 2015, we changed from a human resources department to human capital department. And it was really, because not to see people as money or anything like that. But to see people as assets as opposed to liability, like a resource is a liability on the balance sheet, you want to minimize it. Capital is, is an asset that you want to grow. And so we don’t even have like the acronym RSA, I, acronym RSA, which I know is an industry standard also hate the term betting to refer to our category, prefer sleep. But um, but it bothered me that retail sales associate, RSA, that the person who had been there, nine years, and the person who had been there, nine days or nine hours, just because the person had been there nine years, they get the same title as a person who had been there nine days, nine hours, just because they selected this profession, the art and science of sales, which is like one of the most important professions in art in Business and Commerce. They have spaces, they can’t grow. And so it just didn’t make sense. And so we held ourselves accountable to having career paths, in every category, every department, even on the sales floor, where you wouldn’t traditionally see it. And so, and then, so we have home furnishings, associates, home furnishings, consultants, home furnishings, professionals, Home Furnishings experts, and there’s different like, bonus levels, pay scales, rewards incentives, and they’re earned both through performance and through certifications. And so now you can continue to grow. So we always want to have kind of personal growth and organizational growth, right. And so, and that goes back to like the summit’s investing in our people. When we launched our purpose statement. We had done a workout as a leadership team, and couldn’t, couldn’t come to consensus. And so we want a vision statement instead, because we have mission and values or mission and principles, if you will, that mission core values. We lost a vision statement. Instead, we put the purpose, work on hold. And then I read a book called the story of purpose by Joey Ryman. And I started following him and kind of understood his approach and came up with this the statement that was kind of synthesizing all the work that our executive leadership team had worked on, but didn’t tell anyone because we just kind of like press pause on it and done our vision statement. And so I’ll let it marinate for 11 months, because I wanted to make sure that it would hold the test of time, I only shared it with my wife. And after we decided to buy the company and knew that we were going to take a really long term approach on this. I brought in my two business partners, I said all right, because they knew that I had written these four words down. And so I shared it with them. And they loved it. They said yes, let’s do that. So okay, well, we got to take her get a run it past our leadership team. And it’s like each of the four words are sent sentiments behind each of the four words when we unpack them. And so then the video that you’re alluding to, came from us interviewing our memory makers are people about different things, but we curated their responses. And we knew what our purpose statement was, but we wanted to have a big surprise launch of it. And so we did this internal video, through interviews we did with them about what they thought furnishing life’s best memories meant to them, and interacting with their guests or on the sales floor. And so then it was part of our big reveal. When we brought in inky Johnson, I don’t know if you’ve heard of inky Johnson to come speak at our leadership summit in 2018. And so, and then following that we had the launch of our purpose statement, we want to activate purpose. And that’s what we did all through 2019 and ran through the folks who we studied and learned, we brought in these speakers. And then what we did this year because we had to do it virtual was we democratized it because in previous years on leadership summit, we can only hold so many people in the room. And so this year, we were able to open up to the entire company through zoom. And so that’s so that’s we just had it on Friday on the anniversary, so we called it our either anniversary event or encore event is we had four sessions, a 9am session and 11am session, a 1pm session in a 3pm session. And so it was opened up for everyone in the entire organization it was it was a virtual event and so and some really cool topics. I don’t know if I Question I just was all over the place there.
Mark Kinsley:
Oh, that’s, that gets us into a lot of what the event is. And I noticed something that you said, that I think really puts a lot of purpose behind what you. Your role is like number one you outline the career path you have and not just calling somebody a salesperson. You call them memory makers. Where did that come from? What’s the story behind calling your people memory makers?
Charlie Malouf:
I’m trying to think of how that came about. Exactly. Um, you know, Disney doesn’t call their employees like employees, they call them cast members and Imaginer’s.
Mark Quinn:
Right. Is that that last documentary? They did imagine?
Charlie Malouf:
Yeah, yeah, that’s a cool documentary. By the way. I know a lot about Disney just because my wife has dragged me there a few times. Your son’s I do not like roller coasters. By the way, Slinky Dog cat 7am on a roller coaster. Wait a minute. I know we digress. Home.
Mark Kinsley:
But we, you know, there’s always like a flashback moment.
Charlie Malouf:
Yeah.
Mark Kinsley:
He is like hugging himself on camera.
Mark Quinn:
He’s sweating. Look at him He’s like, there’s like drips of slack that
Mark Kinsley:
The moment you just went back to your mind.
Charlie Malouf:
If You want to go there? I mean, we can go there. If you want to go to Disney. There’s a lot of things right. And they get their margins. That’s for dead gum. Sure. But uh, waking up to 5am 4am to go on a on a vacation to go wait in line to go on the what is it? What is the movie? The Avatar? Right. You got it? You got to wait three hours to go on a? I got I got a weak stomach, man. And so. But yeah, I do have flashbacks to that.
Mark Quinn:
So anyways, anything for the kids in life? Right, Charlie?
Charlie Malouf:
Kids, Yeah, happy wife. That’s right. That’s right, people.
Mark Kinsley:
That’s another episode, we’ll say, Charlie, just lay down on this couch. Tell us all about it.
Charlie Malouf:
Let me tell you about my first Disney trip. Oh my gosh but so anyways, we were always trying to figure out what do we call, he called employees, teammates, team members. There’s never like a great phrase that everyone can kind of adopt. So I guess they’re just kind of like, a bunch of failures of what to call our folks. It was after we launched furnishing life’s best memories. We just kind of adopted, you know, being a memory maker be a memory maker. And so we call our people memory makers, you know, and it forces us to have intentionality with how we treat each other, and how we talk to each other and the language that we use. And so if you want to make a moment, a memory, there has to be intention behind it. You know, in one of our favorite books, we have this thing called book club in our company, one of our favorite books and see if I have it on the wall over here, or behind me is a power of moments on the heath brothers. It’s just a phenomenal book and goes through different types of peak moments or flagship moments that can get etched in your memory bank is a memory. And so we really love that we think about furnishing life’s best memories. And so we’re memory makers, remembering makers, for our guests. A memory maker for our people, I try to be you know, that’s part of my responsibility, and for their families, and we’re memory makers in our communities, we try to be, you know, if we’re thinking about the triple bottom line, and for all the stakeholders are people who are impacted by our organizational wake, and we’re also memory makers at home with our own families. And so it’s just how can we kind of, you know, at the end of the day, when we’re all at nine years old, or look back at listening to these past pod mattress podcast and reflecting on your, how many millions of copies of your book that you sold? And talking about the different copies? Yeah, what are we really gonna have these moments, these memories, and so you can’t put a price tag on precious memories, you just can’t, like, you know, we’re all going to, like, be blessed to be hopefully, reasonably well taken care of in our lives. And hopefully, we live lives that we’re proud of, and that we get back to the less fortunate and we, we help make the world a little bit more positive along the way. But what we all really want are those really special precious memories that we just, that’s what we live for, you know, that’s what we hope for, are the things we get to look forward to. So when I talk about memories, it’s the memories I had as a kid in the future like I had dreams and goals I want to have in the future. And then also when I when I’m older, and I look back that sometimes I think it keeps me going that is the memories I had in the for the memories I had in the past. And so it’s this perfect fusion of today, where you have the past that supports you and the future that pulls you forward. And so in retail we have to live for today we have to win the day every single day we get a scorecard. And so I think it really pegs to our business model like we don’t have like Netflix subscribers or is that a little bit more topical than compact. So we don’t have subscribers we don’t have like AT&T riser, or you know, so you know or prior Members. Yeah, I guess, but we do have the chance to interact with our people every single day. And so if we want to be make an impact, we have to be present in the day.
Mark Kinsley:
Give us a little bit. So I’m going to test your memory. So you mentioned the power of moments by the heath brothers and I love Made to Stick. That’s a great book. So what are some of the key things they say about making moments or making memories? What are the things maybe people could put into action right now, so they can be intentional when they are interacting with others.
Charlie Malouf:
So they have an acronym, and it’s epic. That’s how I remember it. But they don’t like to use epic. They even had a footnote in the book that says, but don’t use epic. And so it’s moments of elevation peak moments, moments of transition, I’m gonna forget them because you called me on the off the cuff here. But it’s, it’s um, and they open up with a story like a high school graduation, or selecting your college, and how they really looked for you can look for moments that could otherwise just be passed or forgotten, and elevate them and make them really, really special. And so like, one of the things that we try to do is day one, and so we have a whole process around someone’s first day, because everyone remembers their first day at work, you can always remember that’s a transition moment. And so, you know, we want to we want to like and so we have a whole surprise box, a branded box. And we’re not the only ones who do it, but we try to like take it up a notch and we have people to greet them and we have a whole kind of intentionality around day one your first day. You know, we also have like when you become a million dollar memory maker, or a million dollar writer, when you cross that million dollar mark, there’s a whole big surprise and, and a whole big celebration for that moment, that peak moment. They in the book, they even give the story of the Popsicle hotline, there’s this one hotel this pretty normal. But if you pick up the phone, you can say, hey, bring me a Popsicle, they just bring you a Popsicle on the tray, at the pool or something. Everything else about the hotel is completely normal, except for the Popsicle, the magic Popsicle hotline, so it’s looking for those otherwise, moments that might you get like a transition, like when you get promoted from one thing to another, that’s a chance for a flagship or a defining moment. So just kind of the book teaches you about looking for these four types of moments that you can make a little bit more impactful.
Mark Kinsley:
One of the things that you’ve mentioned a couple of times, as you’re talking about making, making moments making memories is transitions. And during our speech at the furniture day bedding conference, we had our dose takeaways from 2020 so far, and number one was something we got from Jesse called the Savannah bananas guy, who also mentioned the Popsicle hotline on that episode hotel, right? He’s in a hotel. Yeah. And so he says to us, you win in the transitions, we started really thinking about not only can you win in a transition, which is COVID. But you can win in the transition from the time somebody steps out of their car until they walk through your front door. You can win, like you said, with your with your culture and with your employees, your team members and your memory makers, when they transition from one position to another. Is that do you think a lot about transitions and how those are so important? And what you can do there?
Charlie Malouf:
Yeah, I think that there’s so much more potential there. Think about in the in our industry, right? The transition? How much more can we make it impactful at that point of delivery you call it? Call it like that zero moment of truth? Think about how popular unboxing videos are on YouTube, right? And how much people put into packaging. So what are we doing at the moment of delivery? To make sure that it’s super impactful? I’m just saying that’s an opportunity for us? And probably others? What about that moment? If you find out through discovery, the person who’s shopping in your store? What if it’s like their very first mattress? Or what if you know that they’re buying for themselves? Or what if someone just gets approved for you know, $5,000 from synchrony bank or TD Bank or whatever their financing partner is? And that’s the first time they just applied for credit. Isn’t that like a transition moment or proud moment? So I think that there’s opportunities, we have to train ourselves and there’s a whole chapter in that book to train ourselves to look, look for him. And we went through that book as a leadership team, chapter by chapter. I think that transitions are things that we can really be a lot more intentional about throughout our entire business.
Mark Quinn:
So Charlie, one of the things that I love about you have many so far since we’ve had you on the show all of half hour, however long it’s been is that you vocabulary is important to the thing, the words that you’re using the one word for purpose, and you have a word of the year, things like that. In the furniture industry, they talk about the house, but rarely do they talk about the home. And you talked about, you know, making memories and the furniture store is a place where you live, but you experience life. And the things happen in those rooms. And it seems like you really connect to that that idea. Why is it that the rest of the furniture industry has so much of it doesn’t like they’re selling headboards, and footboards, or dressers, and they’re not selling the idea of the emotion behind their home in what it means to buy something for their home and bring it in and how they’ll feel as a result. Why do you think the furniture industry so much misses that whole point?
Charlie Malouf:
Um, so I don’t? That’s a great question. So I just be purely aghast to answer your question. You know, I think that we’ve you start to do something, I think, as an industry, and first of all, I’m not sure that they don’t, right, I’m not, maybe but but let’s let’s take your side that so many people don’t. You know, maybe it’s, it’s because we’re living quarter to quarter, and we’re trying to hit our numbers. And we get we get into this mindset of retail, well, how’d you do? only way I know how I did is how I did versus last year, and we get so mechanical, and we’re just trying to improve by increments, you know, how we did on the we make our numbers or not, there’s so much pressure on that, that we’re not taking enough time to get out of our four walls, and think about how to disrupt ourselves or disrupt the moment or, or look at other industries, and be challenged by Well, how would you approach this? Well, how could this be different? I don’t know. We’ve got to be more willing to not be afraid of change, and to disrupt ourselves and to think about things differently, because others will if we don’t, you know, and, but I think maybe it’s because you got, you know, companies that are feel a lot of pressure to there’s not a lot, you know, though people think there’s a lot of margin in our business, that you know, there’s really not, we’re all fighting for that, that little margin that there’s there. And so it’s we’re trying to improve by like, increments of. And so sometimes you have to kind of like trust the process and, and get outside your box and try to innovate and think about things differently. But a lot of times we get we get caught in the whirlwind, we get caught in the whirlwind, and in our day jobs, and we don’t we don’t get outside to try to think about how we blow this up completely differently. If we were starting from scratch, how might we think about it? Maybe we’re not talking to enough women? Maybe it’s just too male dominated? I don’t know.
Mark Kinsley:
It’s a continuous thing.
Charlie Malouf:
Did I go there?
Mark Kinsley:
Yeah, no, you know, it’s a common thing. I mean, it’s something that we’ve talked about in the show. It’s something that came up with the furniture, a bedding conference, just the idea of diversity in ethnicity, gender background in general. Yeah. And it’s pretty one sided. It seems like for the most part in our industry. And I think you know, we’ve talked behind the scenes about this Quint and I have talked with other people in the industry who are in leadership positions. And I think part of it is incumbent upon us as an industry to make it a cool place to work, to give people a sense of purpose behind their job, the things that you’re doing, and I bet you have no shortage of folks that want to come work for you. And by the way, if they do want to come work for you, how do they get in touch with your company, like what’s the best place to go online?
Charlie Malouf:
We have a website Broadriverretail.com and we have a careers and a job section there where we’ve got some phenomenal recruiters and we go through the whole process intentionality of the whole recruiting process and the interviewing process. Yeah, I think retail is tough man, I think retail can there can be some long Dog Days in retail. And so if you’re not keeping it fresh, and you can manage with the stick you reference made to stick you can manage with the stick or you can manage through purpose and impact and it’s got to people have to internalize kind of why they do what they do and feel it there’s more to it than just did you hit your numbers or did you not and that has to be sincere and authentic. And it’s got to be based off of the decisions you make day in and day out and are they for your people or against your people and people will ultimately see through you know, those were in authenticities and I I think you know, we’ve just worked really hard to establish a lot of goodwill with our people. And what I’ve said often to our people is, at some point, and you know, we may need to lean on that goodwill. And so I hope that we never have to, but at some point, we might not, we might be in a tough pickle. And so, yeah, this COVID thing happened. And, you know, just so blown away by how our people responded, and really kind of fought to kind of dig us out of here. And, and we put together a lot of programs. You know, we put together a memory maker Assistance Fund, before we even knew about the stimulus checks. We were sending out checks to our folks who we had to put on furlough. We, you know, in the industry, I heard some folks, and I’m not gonna name any names, who were saying, hey, times, you’re in get tight, this is a perfect time to prune. And print your bottom 10%, the old jack welch mentality, I said, No. Like we had zero layoffs. By the way, we and by the way, we had no government assistance, we didn’t qualify for the PPP loan. So and I’m happy for those who did. And I hope that all those loans get forgiven. But we didn’t and, and we didn’t lay off any of our people. And we created a fund in partnership with my former business partner, Jonathan Ishi. We borrowed from our founder Scholarship Fund, which goes back to provide scholarships for the children of our memory makers. And we borrowed from that finds, plus new additional files. And we sent out stimulus checks to our own people, everyone who was on furlough had a financial impact. And so we’ve done things like that we’ve got an interest free loans, we’ve done top off programs. So I just think you got to be willing, you know, I really, there’s a book called everybody matters by Bob Chapman, which is, you know, really influential in terms of kind of how we try to manage and lead and, and so you got to make it fun. You can gamify it, you can have contests, you can’t be afraid to throw out some massive jackpot bonuses. That’s an old Tony Robbins trick. So we, you know, we love huge handsome rewards. And we’d like to see our people make just incredible amounts of money. And it’s that’s all about mutual prosperity and, and believing that a spirit of abundance as opposed to a spirit of scarcity, and believing that it’s not a zero sum game, that there’s enough to go around. And so that the company wins, we want our leaders to win, we want our people to win, we want even our vendors to win, we’re not afraid for our vendors to win. And that’s because we are and in the community, the climate, the planet, we’re concerned about the whole ecosystem. We think that’s a more sustainable approach to capitalism. And so I’m also inspired by the cap, conscious capitalism movement. There’s a book called donut economics, something about that about regenerative, regenerative, I can’t say this word, you have to help me out. Inaudible [52:53].So there’s, there’s but you know, like, what kind of world do we want our kids to grow up in? And as it were, there’s just a few winners, and everyone else gets scratched or where we all kind of, right, you know, everyone does well together. So that’s just some of the things that have influenced our thinking.
Mark Kinsley:
Well, I have one question for you. As we wrap up today, Vander hall or Polaris slingshot, are you gonna take your mom’s advice.
Charlie Malouf:
Um, I love this question. I I think I’ve gone to Quinn’s side here. I like the Batman mobile Look, so I love what Vander hall is doing. But that slingshot looks slick man. The slingshot looks slick. I think it’s, I think it’s the slingshot, but you know what? Truth be told, I need to go try on both out I need to go take a comfort test in each of them and, and really make an informed decision.
Mark Quinn:
I mentioned the duck because you’re trying to get you to pronounce a word in on the furniture. Today betting conference, Kinsley forced me into speaking like Donald Duck, which is appropriate for this since we’ve been tight. Who the hell can do that? I could barely do that. But anyway, so that was I was waiting for him to like, force you into that as well. As we do wrap up, I want to bring up one last thing too. You talked about your purpose. 828. And he said it was from Romans, while you were talking, I looked this up I just want to read this and it says and we know that in all things God works for the good of those who love Him who have been called according to His purpose. And so I love that because it is a reality that there will be valleys, and there will be peaks. And you have to have a faith in what you’re doing and in your people and all of those things. And the good and the bad all played together for the greater good. You just have to believe that that’s true. And you guys clearly do believe that. As well said, I couldn’t say any better. We do. Yeah, we look, I’ll just, I guess, as we wrap up here, I’ll just close with saying this. I think that this, this, this time has been tough for a lot of people in a lot of different ways. And anything that we can do to try to ease the pain for our people. I just think it’s the right thing to do. I mean, in some way, I also think it will, that’ll pay off for us down the road in some way some shape, or how but I think mental health is real, I think, I think you’re the anxiety that comes about, I think that social distancing is not the most accurate phrase, I think it should be physical distancing. Because that’s really literally you’re trying to stay six feet apart. And, and, and wear a mask and be safe. But like we need to be, we need to over index on social connection, because the risk of not being socially connected is isolation. And I think that takes us to a bad place. It’s not super healthy. And so I just know that this has been a tough period of time. For a lot of people, I’m really ready, just like everyone else, for a vaccine to be out there for us be past this. And I just encourage everyone to hang on, we’ll get through this. There will be peaks and valleys and but one way we can get through it is how we treat each other and hopefully, kindness can emerge is one of the principles that we hang on to on the other side of this. And, you know, I know we’re in a crazy election season, but ultimately, I think that we’ve got to figure out how we treat each other. And, and, you know, there’s great companies that you guys have interviewed on this podcast and I support them all I love I love retail, love the industry. And wish you guys all the best man, I hope to order hundreds of copies of that book when it comes out. And we’re going to give not to our memory makers.
Mark Kinsley:
Just if you’re gonna guess the title of the book. What would you guess the title of the book now? Because Quinn keeps telling me He’s like, I’m worried I want to be the one that slips up and lets it out of the bag first
Charlie Malouf:
Oh, yeah how many words, is it?
Mark Kinsley:
Oh, should we give him that wait? It’s just this is perfect for you because he’s a word guy. And you are the guy that has four words that come to mind that retail environment.
Mark Quinn:
On the spot, I love it. That’s great.
Mark Kinsley :
Mattress no and here’s the thing, whatever you tell us. It has to you have to talk like a duck as you’re telling.
Mark Quinn:
Yeah. Oh, no, no, no, no, no. No to me. Yes. And or a mouse. You can talk like a mouse if you want to talk.
Mark Kinsley:
What did you say? I think we talked over you.
Charlie Malouf:
Is the word mattress in the title?
Mark Kinsley:
We can’t tell you that.
Charlie Malouf:
Well, I think it’s going to be something about the driving retail foot traffic. But that’s way too literal. You guys are way too creative for that. Um, it’s got the word dos in it. It’s a DOS. So it’s definitely got dos. Um, it’s maybe it’s dos MarcoS. So maybe it’s two of the four words.
Mark Kinsley:
Like where you’re going?
Mark Quinn:
I do too.
Mark Kinsley:
I guess we should have had him named the book with us. Yeah, if we do another book in the future, we’re just gonna have you come be part of the brainstorm for the title.
Charlie Malouf:
Or it’s buying those markers. Maybe it’s buy that maybe that’s in the byline. You’ve mentioned,
Mark Kinsley:
I think we should call it double Dose of Marks. Just like totally. That’s good. It’s kind of Meta in a way.
Mark Quinn:
Tell you what, Charlie, you do not have to answer right now. You can send us a note and text us what you think the book should be called. And we’ll throw it in the pile.
Mark Kinsley:
And hey, I want to say something before we close out like you’re an inspirational guy. I love this conversation. And I know that we’re talking to you and there are so many people that are part of the team memory makers and everybody that touches every piece of the product goes out the door delivery teams. I love this industry. And I love seeing companies do it right. And we love shining a big bat signal spotlight on the people that are doing it right even if they don’t have their player’s slingshot yet. And so we’ve really enjoyed this and to your people that they listen to this. We get to see some really incredible companies and we get to see some that are on their way up and trying to make their way and you guys are way up at the top on our list is
Charlie Malouf:
Very kind and you’re exactly right we have it’s all of our people. We’re blessed with some incredible people that I get to work shoulder to shoulder with every single day. And so I’ll maybe, I’ll ask them what they think the name of your book is going to be. How to eat a mattress, one bite at a time.
Mark Quinn:
I love it. Hey, Charlie, you have inspired us we’re really grateful for you taking the time with us and I think you’re right onto something I hope that people in your company realize how lucky they are to be part of that because there’s not a lot of companies that get it the way you do so keep on keeping on keep shining that light and we hope you’ll come back and talk with us some more.
Charlie Malouf:
I have enjoyed missing you. Sure I will anytime. Thank you so much guys.
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