Looking back: Howard Brodsky

Home Featured Post Looking back: Howard Brodsky

The co-founder, chairman and co-CEO of CCA Global Partners recalls how an idea became an institution

Retail landscape in 1986…

At that time, the independent specialty store was dominant in the industry. Home Depot and Lowe’s were growing, but at that point [more than half of flooring sales] were still coming through the independent retail channel. So, most independent retailers didn’t consider big box stores primary competition because they did a lot of DIY business. The competition was generally regional chains—New York Carpet World, Carpetland USA, Miami Rug, Carpet Exchange, etc. But the ability for them to execute from sale to install, like with the home centers, wasn’t as respected. It was definitely an era of specialty retail.”

Q&A

Howard Brodsky

Post-1986, what brought about change for retail? Would it be the launch of buying groups like Carpet One?

No question. I think we were significant by owning a group that actually got to enormous scale; it was a sea change. I also think we elevated the level of professional- ism in the industry with training, education and marketing. We definitely elevated the level of expertise that specialty retail had.

Carpet One grew by leaps and bounds through the years. When you look back on these last 35 years, what stands out to you?

There are two things I’m most proud of. No. 1 is the success we have made for the
members. During the recession, the industry lost 25% of its retailers; we lost 2%.
Our members have probably been the most successful stores in the country. It’s
the tools we’ve given them to be successful. We’ve given back more than a $1.5 billion in dividends. We’ve helped them reach the highest level they could.

The other thing is the relationships. We have built a company with close relationships between the members and the stores. It’s a real family. We go away on a major trip every year or every two years. When Alan and I started, one of the things we said early on was we wanted people who were really high quality and ran good operations. Also, really nice people we’d be comfortable inviting to our homes for dinner. When you get some one who is talented and you give them the tools, they can be as good as anybody else can become.

What do you see as threats to the specialty floor covering retailer today?

I think the biggest threat is complacency. The front door today is not just a physical building; the front door today is as much a digital front door as it is a physical building. I think it can be tough to understand all the changes that are taking place and to be ahead of those changes so you don’t get stuck. Just over the last 12 months the amount of the world that has gone online is enormous. And a lot of them won’t go back. I think the biggest challenge for independent dealers is to keep up with technology and the change of consumers’ habits, and to be ahead of those trends instead of trying to catch up with them.

Thinking back to 1986, what is the one thing this industry could have done better?

The industry really should have had a fund to elevate the buying of the product. In other words, like “Got Milk?” There was benefit to raising the tide for everybody. It was a missed opportunity. Because if you generated more demand for the entire product category, every- one would have been lifted up.

Best decision you’ve made in 35 years.

Starting Carpet One as a co-op. I’m really close friends with a lot of our members and I’ve seen what their lives are like. They’re leaving their businesses to their kids. We have some people who started as $2 million dealers and now they’re $30 million dealers. We’ve had some enormous growth stories. I think it has changed people’s lives. But I think the relationships have changed lives, too. The friendship and the bonds that have been made with the members are enormous. Because it’s a cooperative, I don’t own a single share of it. But my enrichment has come from seeing other people’s success—it always has. My life is not built around material things; my life is built around people.

Also, when Alan passed away it was one of the toughest periods because we were not only close CEOs and co-chairmen, but we were also the closest friends. I had to make a decision on what I was going to do corporately. I had always felt having a co-CEO just worked stronger. Hiring Rick Bennet was the second-best deci- sion I made. He is an enormous complement to me. They say it takes an architect to build something great; I would say I’m the architect and Rick is the builder. It took me almost seven months to convince him to join me. It was a tragedy losing Alan, but Rick has just been an amazing part of the company.

What is the one decision you’ve made over the last 35 years that you would change if you could?

We started the shop-at-home or direct-to-consumer program somewhere between 15 and 18 years ago and gave it up. We were a little ahead of our time with it, but we should have never given it up.

What has been the most difficult time for CCA as an organization, and its members, over the last 35 years?

For me, it was when Alan [Greenberg] passed away. Not only was he an instrumental part of the business but he was my closest friend. He died of a terrible cancer. That was, without question, the biggest challenge.

I think the recession certainly presented challenges. The industry shrunk by such an enormous amount and you knew the Home Depots and Lowe’s were not going out of business. They were big public companies. And we had to ensure that our members were going to come out of the decline. One of the reasons the cooperative is successful is we were able to be there to help with national accounts, with insurance business and to work on loans.

Who are the people you’ll constantly think about?

The most significant person in the floor covering industry was Rick Meyer. Rick was the founder of Carpetland USA. We got to know each other very well when we were on the original board of the National Furniture Association. We became very close friends when we were both presidents of the American Floor Covering Association. I got in some trouble in my business in my 20s and Rick was the one who helped me. More than anything he became my mentor. Then, when he got in trouble with his business 10 years later, I helped him. Rick was a wonderful, brilliant person.

Sandy Mishkin was a critical part of CCA. He was president, he was the lead product person. Sandy was there from almost the beginning.

Larry Nagle has been a friend and amazes me. He has been a great advisor for so many years. Larry was president of Lees; they wouldn’t sell me Lees Carpet for my retail store. Then, Carpet One ended up buying the Lees brand and we became really close friends. Larry has done so much for the industry in so many ways—his contribution to the Floor Covering Industry Foundation, acting as mentor, being an advisor to so many people. He is an amazing person.

Sam Yonan was a dear friend of mine who passed away. He was one of original members. His brother now runs the store, Yonan Carpet in Chicago. Sam was probably the most ethical person.

Frank Mayfield was also quite an amazing person. He had a standout single-location store. He was what I call “the consummate professional.”

Al Wahnon was such a part of the industry. He was an instrumental part of so many things in the industry. He had a love for the industry that was unmatched.

Jeff Lorberbaum and what he has done. How he took the company and built it into such a conglomerate is quite a story. To acquire and build is not simple. And Bob Shaw, for not only building Shaw Industries but then taking on a new endeavor at an age that most people wouldn’t think about starting a company and building it into something massive.

Give me two stories you tell over and over again.

Early on, Alan and Sandy and I made a presentation to a big dealer in Florida with five stores doing about $25 million back then. We only had about 35 members, so this was a big deal. After our two-and-half- hour presentation, he said, “I’m in” and wrote us a check for $75,000. After we left, we cheered. But then we said, “I’m not sure the mills think he’s the most ethical person.” We weren’t sure how he was respected in the industry. We then talked for about three hours and decided, “Who we bring on is who we are. Our members are who we are.” And we took the check, put it in envelope and sent it back. That was the beginning of determining who we were going to be as a company from an ethical standpoint and who our members are going to be. It was a turn- ing point because it showed we cared about who our members are. If we can’t be proud of someone, we don’t want them part of the CCA family.

Here’s another one…My father was a Russian immigrant whose dream was to start a floor covering store. When I was 5 years old, he started a small floor covering store in New Hampshire. He had learned the floor covering industry at Sears, where he worked for three years in the floor covering department. At the time, Sears was a major entity in this industry. He passed away when I was 12 years old and I told my mother, “That’s what I want to do.” Because I saw the pride that he had and the love for it.

Years later, Alan and I were in Chicago presenting to the head of Sears to take over the floor covering departments all across the country. I said to myself, “Here I am at the Sears Tower in Chicago, talking to the head of Sears, and my father started out as a salesman in Lawrence, Mass., as a Russian immigrant.” We ended up not doing it. I think my respect for retailers comes from seeing the love my father had for a family business.


Brodsky looks back on the history of Carpet One

When I got out of college, a lot of people [in the industry] ended up meeting at the University of Indiana program for carpet retailing. You went for two weeks and received a certificate in Carpet Retail from their business school. A lot of the people who became leaders in the industry went there; that is where they got to know each other, including [eventual] competitors from different parts of the country.

Back in the late ’70s, the National Home Furnishing Association expressed there wasn’t a significant association in the floor covering industry that was national. They were big, so they decided they wanted to have a floor covering division to both grow the association and to service floor covering stores. At the time, a lot of the furniture stores carried floor covering, too. So, they brought together a core group of us to start the floor covering division: myself, Rick Meyer, Don Mendenhall, Sam Yonan, Bill Baros from Miami Rug. Bill DePalo, who was the No. 2 guy at the National Furniture Association, really led this effort. From there, they started to grow the member base.

After a few years, we felt our group didn’t belong as part of the Furniture Association but should be a separate organization, and that became the American Floor Covering Association. Over the years, presidents included Rick Meyer, Alan, myself and LaVone Pirner. In time, the American Floor Covering Association merged with the Western Floor Covering Association, which eventually became the World Floor Covering Association.

How the co-op came to fruition

Alan and I became very close friends, and during that time the industry was trying to gain market share. We took a look at the American Floor Covering Association and thought we needed a national campaign. We had this idea of the “Billion-Dollar Carpet Sale” and make a billion dollars in 10 days. We went to the biggest agencies in New York City, including the one that did the “Got Milk?” campaign, and we asked how much we needed to raise. This was back in the early 1980s and they told us we needed a budget of $50 million or $60 million. We devised this plan where everybody would put in maybe two cents a pound. We had this magnificent plan, we went off to the mills and the fiber companies, and after five months we had raised $300,000. Alan and I looked each other and said, “We’ve got to figure out another way.”

We decided to sign up retailers and let them do the advertising. We went to all the newspapers across the country and asked them to run a 25-page campaign in which we would pro- vide 12 pages of advertising and they would provide editorial about the benefits and beauty of carpet. We got almost every major, local newspaper in the country to agree. And then we had to sign up retailers. We put together a $79 package to participate and some 9,000 retailers signed up. There was a sweepstakes; we took the $300,000 and we gave away something like six cars and six trips to Hawaii. Plus, we had a small budget for a marketing agency. We ended up hitting our numbers by utilizing the strength of local businesses and newspapers.

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