The missing ingredient in most stores is the enthusiastic encouragement from the boss to attain and improve quality standards of merchandise and service. When the boss gets excited, so does everyone else in a retail organization.
--Stanley Marcus, Quest for the Best
Gordon Segal was getting excited. And when the boss of Crate & Barrel gets excited, so does everyone else in his retail organization -- particularly those within a 20-foot radius of its main power source. On one warm July morning, this included about 40 employees from Crate's six Boston-area stores, squeezed in among the candy-striped beach umbrellas and picnic-to-go paraphernalia massed on the main floor of the Harvard Square emporium. The troops had turned out for a bit of inspirational oratory from the old field marshal himself, and he was not about to disappoint the faithful.
"There are no promises in this business," Segal declaimed, halfway through a rousing sermon on The State of Crate, 1985. "No guarantees that we'll succeed. Me, I'm afraid all the time. I'm afraid we'll get too arrogant. I'm afraid we'll get too snobbish. I'm afraid we'll take our competition for granted. When you're in retail, you learn to run with a little fear."
With that he took off, running not with fear but with a $20 beverage dispenser cradled in his hands. Clutching the container to his bosom, Segal darted nimbly from saleswoman to store manager, stopping only to remind his young charges that their main mission -- indeed, their sole professional purpose in life -- was to sell fine housewares and accessories, and to sell them with enthusiasm. Although no clear route lay open among the racks of beach chairs and beer glasses, Segal flew on, apparently navigating by some peculiar form of echolocation. The effect was utterly mesmerizing. Crate employees who had handled the same piece of merchandise a hundred times themselves were suddenly leaning forward to lay hands on it, as if it were the Ark of the Covenant and they, the lost tribe of Israel. One had the distinct feeling that had Segal elected to auction off his prop, $20 bills would have filled the air like confetti.
"We must never, ever lose sight of what we are, "he continued, pausing to swap the beverage dispenser for a blue lawn candle. "We're not a distribution company, and we're not a computer company. We're a sales company." Segal held the candle aloft. "See this?" he said. "Ten or 12 years ago, two women were sitting on a beach in the south of France when they happened to notice a piece of rope with a glob of wax attached to it that had washed up in the surf. Because they had imagination -- because they saw the possibilities in that glob of wax -- today they own the biggest candle factory in France." He thrust it forward like a matador taking a stab at a hardcharging bull. "And that's what you people have to have. Imagination. This is a business built on personality. Personality and imaginative merchandising. You're selling a candlelit dinner by poolside, not a piece of wax on a stick. You're selling romance, not flatware."
He spread his arms dramatically. "This is theater, people," Segal thundered, "and you'd better be into it, because you're the stars!"
His soliloquy finished, the boss asked his supporting cast to "speak your minds." For a moment, they simply stood there, tongue-tied: How could they improvise dialogue that wouldn't sound woefully anticlimactic? Finally, though, after a few routine queries about Crate's imminent expansion into San Francisco and Houston, one woman decided to speak hers with enough imagination to suggest that she realized Crate & Barrel's future inventory wasn't just going to wash up on some beach in Nice.
How, she asked, did the $50-million-a-year company intend to underwrite this "major period of expansion" that Segal had so boldly outlined? Could it finance the growth itself? Would such established regions as Boston and Chicago suffer from Crate's great push westward? Segal thought for a moment before answering.
"Well," he said, "there are always rumors around that we're going public. And it's true that the risks tend to multiply geometrically as you grow. As it happens, private venture capital and going public are two alternatives we're constantly looking at. But retailing is a very fickle business. You can't guarantee earnings will be up 10% every year, and the investment community doesn't always understand that."
He stopped to tell a couple of stories. One involved a Young Presidents' Organization group outing on a U.S. Navy aircraft carrier in the Pacific Ocean. The other alluded to disappointing sales returns on a recent mail-order catalog of his. In both instances, he said, bottom-line concerns over duplication of manpower or shortfall in revenues tended to cloud the more important goals of training personnel for actual combat, or, in Crate's case, of having the managerial flexibility to profit from error.
"That's the issue I have with going public," he offered. "That we're simply not that good, that we'll make mistakes. Hey, I want to make mistakes."
He has not made many. Since 1962, when the first housewares shop opened in a defunct elevator factory in Chicago's Old Town district, Segal's stores, now 17 in number, have set standards of design and merchandising that have been the envy of -- and often the prototype for -- dozens of competitors and quasi competitors, large and small. To anyone who has shopped for or sold housewares during the past 20 years, the "Crate look" is instantly familiar: glassware, dinnerware, flatware, and cookware piled floor to ceiling in drill formation; bolts of hanging fabric, acres of rough-sawed pine; potted plants, soft background music, hot spotlights, cool colors; theme displays in primary tones; signs in bold Helvetica lettering offering running commentary on a product's origin, function, and/or value. Every bit as palpable as the Crate look, however, is the Crate aura, an aura enveloping both the company and the man.
