Tom Phillips isn’t afraid to ask for counsel. As the CEO of Weekends Only Furniture Outlet, he freely admits he wouldn’t know where he would be without the advice of consultants.
“I’m very, very strong on getting consultants — either paid consultants or an advisory board. They just provide such a great value,” he says.
For someone who came from a family of furniture retailers, you’d think it would have been an easy cushion to sit on — simply ask a family member for advice about the failing Phillips Furniture store in Affton, Missouri.
But ready for an out-of-the-box solution, Phillips went outside the business and engaged a consultant to do some research on the situation.
“I didn’t know what to do with the store,” he says. “I hired a consultant to help me brainstorm about it, and what he helped me to see was that in retail, he who has the lower cost of doing business wins — Wal-Mart proves that.
So with that kind of understanding, Phillips thought about how to develop a structure that could thrive with below-market prices. He and his consultant looked around the country and learned of a retailer in Virginia Beach, Virginia, that was operating a clearance center and was only open three days a week.
The idea was born. Now it was on Phillips to see if the idea would work in St. Louis.
Here’s how Phillips opened his mind to new ideas and took the challenge of leading Weekends Only Furniture Outlet, building it to $55 million in annual revenue.
Research, research, research
Just go to a library or bookstore and you’ll see rows and rows of books on self-help topics. While such resources can offer assistance, some problems are so individualized that you need the human touch that analyzes and supports.
When Phillips set out to explore solutions, he drew upon traffic studies from his family business’s general furniture store indicating that 70 percent of the customer foot traffic occurred on the weekends. When it came to purchasing, the decision was largely made by two people.
“It wasn’t normally one individual,” he says. “Couples would come in when they had time together, and that was on the weekends.”
Phillips and his brother David — with consultant Ralph Rosene of Target Systems Inc. who presented the concept — worked out a business plan.
The store would operate just three days a week. Even though Phillips was paying rent, he wouldn’t have the cost of operating the facilities from 9 to 9 like other retailers.
“We wouldn’t have to turn the lights on every day, or at least maybe only turn a few of them on, to keep utilities down,” Phillips says. “We’d have a cost advantage and then we could pass those savings on to our customer.”
David, chief sustainability officer, came up with the name Weekends Only.
“I said, ‘David, that’s perfect. That’s a wonderful thing. All we had to do was add the words ‘furniture outlet’ onto it. Back in 1996 when we were doing this, outlet malls were a big thing,” Phillips says. “They were a big thing, and they really meant something back then, so we put ‘outlet’ into the name, and that’s how the name became Weekends Only Furniture Outlet.”
Another part of the business plan was to focus on using the relationships already established with suppliers. These would be the brand name suppliers that they were carrying in the general furniture store.
“We said, ‘Bring us your closeouts. Give us your overstocks and cancellations. We want all this product and we want to buy it at a discount, and we’re going to pass the savings on to customers,’” Phillips says.
That solidified the business plan, the next step was executing it.
Brainstorming can be a useful tool to break out of conventional or worn-out thinking patterns.
It helped Phillips realize there was a niche that wasn’t being served in the home furnishings industry that was being addressed in apparel by overstock retailers such as T.J. Maxx.
“They had found a way to buy off-price, extreme value products and then pass the savings on to customers,” Phillips says. “That wasn’t being done in home furnishings.
“We had this opportunity in St. Louis to seize that niche and market to the masses because we had brand name galleries, and they were very beautiful and well-appointed and accessorized, but they were expensive. Nobody was really marketing to the masses.”
One other concern was the showroom image. The family decided that a wholesale club approach would convey the message of keeping costs low.
“We adopted more of a Sam’s Club approach — concrete floors, fluorescent lighting, nothing fancy — a no-frills showroom that really demonstrated a warehouse environment, that we’re really keeping our costs low so that we can keep our prices low,” Phillips says.
“We were only going to open three days a week, and customers would have to understand that we’re going to have lower costs so we’re going to pass those savings on to the customers, and that’s what we set about doing.”
Being in the business long enough to understand some of the dynamics of retail pays off as well, Phillips says.
“The weekends only environment presses a week’s amount of customer footsteps and traffic into three days, so it feels like, ‘who can get the deal first before we run out,’” he says. “Many of these deals are limited quantities, and so they see it’s a low price — the lowest price in the market on an item — and then it’s just up to them to decide if they are willing to take a trade-off for what I’ll call the high-touch service that you can get in a general furniture store.”
Choose qualified board members
Asking for and accepting advice is easier for some leaders than others. The mindset is not that different from the one that says it’s a good business practice to get more than one estimate for a remodeling project.
After Phillips opened five Weekends Only stores within five years in addition to a distribution center and installing a new computer system, the funding demands brought a lot of stress to get outside advice.
“I see a great value in looking outside of the four walls of your business and the limited knowledge of your mind to open yourself up to ideas from consultants,” he says. “This led me to form an advisory board where I could have a continual feedback mechanism.”
But there is one important thing to keep in mind: Your advisory board members need to be free of any connection to your business. Phillips says the first time he attempted an advisory board, it didn’t work out.
“I had to scrap it and start over again because I had my accountant, my attorney and my banker — and these were people who were providing a service to me, but I was paying them for their services,” he says. “They were afraid to anger me; they were afraid to challenge me because they didn’t want to lose my account.”
This time, Phillips opted for outside advice.
“I went to a seminar about family business governance,” he says. “I learned how to form an advisory board for a family business of my size, and I set about doing that. In fact, at that seminar I asked one of the presenters if he would be on my board and help me form the board, and that’s what happened.
“He knew of someone in St. Louis who was way ahead of me in retail. In fact, what I was looking for was CEOs or former CEOs of companies who were way ahead of me and where I was going. He knew a man named Craig Schnuck, who was the CEO and president of Schnuck Markets Inc. at the time in St. Louis.”
Phillips convinced Schnuck to join the board and added Rick Meyer, an executive from Save-A-Lot.
“These people meet with me and my wife, Peggy, and then with my executive team four times a year,” he says. “They have been instrumental to me, in creating a succession plan; they convinced me that I should try to recruit one of my children to come into the business to eventually take over the business; they helped with an exit strategy; and they’re great — they give me great feedback on our strategy itself.
“It’s probably one of the single most helpful things that I’ve had in business, this whole concept of outside advisers.”
How to reach: Weekends Only Furniture Outlet, (855) 803-5888 or www.weekendsonly.com
- A little feedback can open the door to big improvements.
- Brainstorming can open new ways of looking at worn-out thinking.
- Find advisory board members who add different perspectives.
The Phillips file
Name: Tom Phillips
Company: Weekends Only Furniture Outlet
Birthplace: St. Louis
Education: I graduated from Cardinal Glennon College, which is the St. Louis Archdiocesan Seminary College, with a bachelor’s degree in philosophy and a minor in theology.
What was your very first job and what did you learn from it?
My very first job was as an eighth-grade homeroom teacher, also teaching mathematics to sixth, seventh and eighth graders. From that job, I learned that I really love to teach.
What was the best business advice you ever received?
- One of my consultants, Joe Hoffman with CMA in Clayton, Missouri, told me, ‘Assuming your strategy is solid, the most important thing is people — having the right talent on the bus.’
- When it comes to setting strategy, don’t worry about the ‘how.’
- The most important thing regarding people is to capture their hearts and minds.
Who do you admire in business?
I admire Craig Schnuck and the Schnuck family of the Schnuck Markets chain in St. Louis. They have found a way to successfully grow their business into a regional powerhouse in their industry and, at the same time, have kept their family together. That is a pattern I wish to model myself and our family after.
What is your definition of business success?
Having done my best, and being able to be content with the outcome and the results. This goes to my overarching desire for human happiness.