A Rose Blooms In Houston
It is five o'clock on a humid summer afternoon, and most of Houston is wilting in the heat. But Rosemary Garbett looks as bright as the shiny yellow Cadillac she drives to the front of Brennan's Houston restaurant. "Endangered Species," her bumper sticker announces proudly, "Native Houstonian."
By all rights, Garbett should be fading. Since 8:30 that morning, she has already put in a full day plotting the future of Los Tios, the Tex-Mex restaurant chain she has run since her husband's death in 1976. This day she worked on finding the right locations for restaurants eight and nine, then huddled with her new operations director to review architectural plans before turning her attention to Los Tios's rapidly growing, new institutional line with her son Tom. The night before she'd been out till long past two o'clock, club-hopping with her 25-year-old daughter Kathy. But now she bounces up the carpeted staircase at Brennan's with all the energy of a teenager at a pen rally.
Rosemary Garbett is indefatigable. Although her laundry may not get picked up for weeks and the boxes may remain piled in corners of her new house she can always find time for the National Kidney Foundation or the Leukemia Society, the Alley Theatre or the Art League of Houston. "She's in the forefront of anything that will further Houston," marvels Larry McKaskle, a Houston city councilman. "Always." The awards that cover her office wall speak to her energy and generosity of spirit -- plaques from B'nai B'rith, the Shriners, and the Institute of Hispanic Culture. She was named the YWCA's 1985 Outstanding Woman. The city has officially celebrated a Rosemary Garbett day -- twice.
If this is Wednesday, this must be the cocktail party for the Greater Houston Convention and Visitors Bureau board of directors. It is a doleful affair, 45 business leaders perspiring together around a tureen of soup and three makeshift bars, the men in tan suits and cowboy boots, the women in gray suits and heels. But Garbett is a breath of fresh air. She works the crowd with Chivas Regal in hand, elegant in her black dress, tan, blonde, and beaming. For most of the guests, the party is one more obligation, two hours of tedium. But Garbett loves it. The square-dance convention is in town? Of course she'll keep her restaurants open late. A party planning committee? She could contribute the catering. A sky box for next fall's Houston Oilers football season? She'll put the people together.
Eleven years ago, you would have thought Rosemary Garbett a wallflower, an insecure widow forced to take the reins of the family restaurant to support herself and her children. Since then she has surprised herself and confounded the skeptics, turning a marginal mom-and-pop operation into a professional multiunit restaurant chain. Sales have jumped from $1.5 million to $7 million and, even more impressive, margins are up from 1% to more than 10%.
Success stories are rare in Texas these days, but Garbett is thriving. While flashier operations were sinking money into the chase for the yuppies' or the singles' bar trade, she kept Los Tios strictly a family kind of place. While better-capitalized competitors expanded breakneck into bankruptcy, she made her way cautiously, consolidating, emerging relatively unscathed from the present downturn and poised for national growth. And her goals grew, too. Rather than just a way to feed her family, Los Tios became a way to build a new life, a legacy to pass on to her children an share with her hometown.
There are hundreds of stories of how inspired business owners have remade their companies, but there are few stories more inspiring than how a company has changed Rosemary Garbett. Any yet a decade into this remarkable transformation, Garbett admits she is still really quite shy and insecure underneath it all, and more than a little dazzled to find herself among Houston's movers and shakers. "For a long time I had read about these people," she whispered to me at Brennan's. "But I couldn't imagine ever meeting them."
It is now past seven o'clock, and while most of the movers and shakers have headed home, for Garbett the night is young. She still has a meeting scheduled with the incoming chairman of the convention center, followed by an interview with a reporter, a quick inspection of one of her restaurants, and a late dinner with Kathy. For Garbett, real life didn't start until 11 years ago, and she intends to make the most of it.
"I'm 52, and I didn't feel this good when I was 35," she marvels. "I feel like a kid who has been given the key to the candy shop."
FOR YEARS, ROSEMARY GARBETT had the same dream, night after night. She'd be sitting in her office, peering red-eyed over the arcana of purchase orders and cash flow, when a mysterious figure would appear, looming up from the shadow of the door.
"We're going to take everything back," the figure would say. "There's no way you can do this."
There were times, early on, when she would have been relieved if the dream had come true. The challenge terrified her.
"If I'd had a choice of going into the business, I would never have had the confidence to do it," she says. But there were four kids to raise, and later to put through college. "It was sink or swim. What else was I going to do? Work in a department store? Become a waitress? I didn't even know how to do those things."
Rosemary was an improbable entrepreneur. A shy middle-class teenager, her single act of independence had been marrying the boy next door right out of high school. Her father had been against it, and as it turned out, he was right. For the next 22 years, she was trapped.
Husband-salesman Thomas M. Garbett Jr., so gregarious and outgoing in public, turned out to be abusive behind closed doors. He wore the pants; she was expected to cook his meals, keep his house, raise his children, and keep her stupid mouth shut. There were always big plans -- schemes for selling spices, life insurance, and institutional foods -- but the money never materialized. Car payments usually ate up half his monthly take-home; the rent took most of the rest, leaving her to scratch for pennies to buy tuna fish. Tom told her how to wear her hair (lacquered high in a bouffant), what clothes to wear (matronly turtleneck sweaters and loose jackets), when she could go out (never), and what friends she could have (none). She belonged to him -- a prop, like the roll of bills in his pocket or the gun tucked in his waistband. She kept his rages secret, as best she could.
"I was absolutely caught," Rosemary says. "He wouldn't have allowed a divorce. There wouldn't have been child support, because we didn't have any money. And I didn't have any skills to earn a living to support four kids."
"She was scared all the time," remembers Kathy. "We were all scared."
Tom started Los Tios in 1970 with $25,000, working with a friend who cooked Tex-Mex. He loved the restaurateur's life: night after night he'd sit in the dining room, his 200-plus-pound bulk wedged into a booth, charming the public and bullying the staff, feeding his ego with boasts of big plans. Until they hit $300 a day in sales, enough to cover costs, he had to take a part-time job during the day to pay the bills. Rosemary would help out with the books or at the cashier stand if they were shorthanded -- just as long as the housework didn't suffer.
The rising tide of Houston's boom lifted even Tom's fragile boat. By 1973, Los Tios was in the black. That year Tom opened a second unit, and in 1975, a third. By 1976, flush for the first time in his life, he began to test the newfound credit possibilities of company ownership, buying two new cars, a swimming pool for the house, and a complete set of new home furnishings, including sterling-silver flatware service for 12.
Tom's death in 1976 left Rosemary buried in bills, both business and personal. For months, Tom's estate was tied up in a court-ordered appraisal, and what little insurance he left could not be released until the coroner ruled that his self-inflicted gunshot wound to the head was accidental. State taxes were already coming due when the Internal Revenue Service announced an audit of the Garbetts' tax returns for the previous three years. Although the restaurants were making money day to day, it wasn't much, and with the business leveraged to the hilt, a cash crisis loomed not far in the distance. A potential buyer offered to purchase the company for half its book value.
"You'll have to sell anyway," the company accountant insisted. "You have no choice," her lawyer agreed.
"I probably would have sold, too," Rosemary says, "if the offer hadn't been for 50? on the dollar. My accountant told me we should live off the interest from the sale, but I knew I couldn't put four kids through college with that. And we had done without for too long and sacrificed too much to give it away. I thought, 'If I'm going to do that, I might as well just lose it on my own."
Things got worse before they got better. The top manager and head chef deserted, followed by the four office employees. "I won't work for a housewife," one said. "You're a loser," another said. Old suppliers shifted Los Tios to COD -- "it was your husband who had the credit rating," they told her. New suppliers kept turning up, delivering uniforms and matches -- "your husband ordered them before he died," they would say. Too shy to talk with salespeople herself, Rosemary had to delegate the job to a 19-year-old management trainee. "No way you're going to be able to pay the rent," her landlord sneered. "I'll be stuck with enchiladas."
"All those insults and put-downs really hurt," Rosemary remembers. "But they made me mad, too, because I knew just how much I had done for my husband all those years."
Why couldn't she do it? She knew what her customers wanted from a family restaurant: consistent quality, with value for dollar -- the things she'd always wanted for her family. And if running the restaurants came down to managing budgets, scrimping to pay bills, juggling schedules, and still putting food on the table with a smile at 5:00 p.m. -- well, she had plenty of experience with all that.
Her ambition at the start was modest: to preserve the shaky status quo and pay the bills. Self-confidence came slowly, from small successes such as meeting the payroll, getting her tax payment in on time, or learning to make conversation at a business lunch. But the more time she spent at the restaurants, the more she saw the problems that Tom's style had created. He had disdained details and never understood controls. As a result, profits were walking out the door -- in the accounts of suppliers who overcharged and underdelivered, in the satchels of the kitchen staff who helped themselves to groceries, in the pockets of waiters who kept more than the tips.
Rosemary made simple changes at first: she locked the kitchen doors, numbered waiters' checks and had them tallied against receipts each night, paid bills weekly by check. She started keeping, and comparing, weekly books for each unit, posting the figures herself.
She managed people differently, too. Tom had been a tyrant, ruling from a distance by intimidation and threats. She knew how that felt. Now, she told employees that everyone deserved to be listened to, and everyone deserved responsibility. Under Tom, operations had been split among three unit managers who ran the front of the restaurants and a single food supervisor for all three of the kitchens. Rosemary abolished the supervisor's post and put each manager in charge of an entire restaurant -- then gave each of them a share of the profits based on increases in sales and decreases in costs.
It wasn't long before Rosemary could see the changes paying off in her daily bank deposits. By the end of the first year, her debt was under control, while her margins were climbing. All of a sudden, her ambitions began to grow.
"The value of the business was still based on my husband's ability," she remembers, "and I was still 'a dumb housewife.' If I ever wanted to get more than 50? on the dollar out of it, I had to prove that I could build new restaurants."
This time it was her bankers who put up the roadblocks. She tried Woodlake Bank first -- she'd been banking there all year and they had seen her success. But the bank turned her down flat. So she tried Great Southern Bancshares, where she made her weekend deposits, and was turned down again. The memory of those rejections still rankles her today. She was a better manager than Tom had ever been, and she had the books to prove it. Yet Tom would have gotten the $300,000 on a handshake.
Eventually Rosemary found a lender, a courtly old-school type from Texas Commerce Bank who actually took the time to visit Los Tios and look at her profit-and-loss statement. After that, she never looked back. Restaurant number four opened in 1977, followed in short order by five, six, and seven. Rosemary stuck with slow change and tight controls, then developed the professional tools to implement them. She tracked every check, order, and bill, by hand at first, later by computer, and was able to push up her margins even more. Managers still had to learn by working at every station, but she added an eight-week training program and a formal policy manual. She built a new headquarters with a central warehouse and central purchasing to control inventory and earn bulk supplier discounts, then put in central kitchens and bought a fleet of trucks to deliver the prepared foods to the restaurants.
"We were really impressed with what she had done in difficult circumstances," remembers Richard Esdorn, a senior vice-president of Texas Commerce Bank. "We're even more impressed now. She's a hands-on manager. She's there every day. She really knows what's happening." Indeed, the bank is so taken with Rosemary that she is now featured as one of its star customers in the bank's television advertising.
And what of the other banks that turned her down? While Rosemary has not forgotten the incidents, she is not one to hold a grudge. She has sat on the board of Great Southern, since acquired by BancTexas Westheimer. And she has received offers of special status if she would only send a piece of her business its way. But now it's a question of principle with her.
"I just told'em that's not how the game is played."
SOME GHOSTS DIE HARD. THE PRESident of Los Tios restaurants still clips coupons and shops double-discount days, uncomfortable spending money on herself. Although her children finally convinced her to move to a new house and escape some of the more painful memories of her marriage, she still does her own housework. And because she'll never forget the experience of finding herself at some social occasion with nothing to say, she sets aside some time every night for reading the newspaper, cover to cover, no matter how late she comes home.
She still works hard, too, on the job by nine o'clock most mornings, sitting at her cluttered rosewood desk, calculator at her fingertips. Watching the details is still her forte: she reads all the customer comment cards to stay in touch, approves every invoice, and signs all the checks to vendors. Twice she has hired a comptroller, only to let each of them go, reluctant to delegate responsibility for the numbers.
Times are sweet at Los Tios. The accumulated impact of all Garbett's small changes has opened up some very large vistas. A centralized kitchen and a new tortilla company not only guarantee product consistency in her restaurants, but add a new market as well. Institutional sales are likely to cross the million-dollar mark, and promise to climb higher now that Kraft Inc. has agreed to distribute the Los Tios line. As for the restaurants, Garbett thinks she now has the product and the systems within her grasp to begin expanding to 50 or even 100 locations. With that in mind, she has just hired two food technologists and a new director of operations, a veteran of expansions at Victoria Station and Beefsteak Charlie's restaurants. Franchising is one option she is considering. And with investment bankers now calling regularly, she is thinking about taking Los Tios public.
But what is most remarkable about Rosemary Garbett is not really how far she eventually will go, but how far she has already come. "There's no point in dwelling on the negative part of it," she says when asked about the years of desperation and abuse. "Things had to happen the way they did. If I hadn't made it through all those years of being put down, I wouldn't be the person I am today. I wouldn't be as positive. I wouldn't be as determined. I wouldn't be a survivor."
Rosemary Garbett is more than just surviving -- she is blossoming. And she knows it in a way that is completely without conceit. She understands what she has come through, what have been the gains and the costs. And mostly she is just thankful for how her story has turned out, and waits eagerly for the new chapters.
"I'm one of the luckiest women in the world," she says. "I was not a whole person before. Now, I have the freedom to make decisions for myself, to meet different people all the time, to learn. I treasure every day of my life."
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