Gordon Segal is a fanatic about details. The morning the first Crate & Barrel store outside the American subcontinent opened at the Mall of Emirates in Dubai, he was in a huddle with the store staff prepping them on how to deal with customers.
"The most important thing is product knowledge," says the avuncular and cheery Segal. None of the uniformed staff are intimidated by the fact that the co-founder and chairman of the company with sales of ¤927million is talking to them directly. It helps that Segal's manner is quite like that of a genial grandfather.
Later, he elaborates on why he personally delivers this speech at the opening of all his stores. "Their product knowledge after being trained for two months is considerable, but the most important thing is that you go around the store, like our merchants go around the world," he explains.
"You touch, you feel the various items, you identify and choose your favourite items, and you say you would love to have it in your house. You don't have to love every product in the store, but you've got to have your opinions about the products; you've got to have your feelings about the products.
"You have to sell the product and that means talking about the product. Naturally, you've got to enjoy selling the product. Customers end up feeling that you know what you're doing and what you're talking about. You got to be able to convince people about buying stuff, especially when it comes to selling furniture."
Eye for detail and drama
He then notices that the lighting in one corner is a little too bright. "The glasses have to be spotlit there," he tells a staff member who's hovering nearby. It's not an order, but you have no doubt that his wish will be carried out immediately.
The way he surveys the store with a critical eye, points out what's wrong, what needs to be highlighted, and how it should be done... it's almost as if he is on stage directing a play. In fact, that's just how he sees his stores.
"We always talk about Crate & Barrel being like a theatre," says Segal, smiling broadly. "What makes a good theatre? First, you get a good script. The play here is the merchandise. Then you need to have a beautiful setting, a background, so you need very good designers doing the backdrop and the stage. Good theatre must have a good stage, good music, a good story, good lighting... So, who are the actors, here?" he asks with a flourishing sweep of his arms across the store. "Our sales guys! If any of those things are not great, it all falls flat. You can have a great script and lousy actors, or vice versa. It's the same story if the stage is not nice, or the lighting is poor, even if it's a great story with good actors. It's like when you go to a restaurant, or travel by air. It's about the service, the experience. It's all pure theatre."
Fairytale beginning
There is something storybookish about the way Crate & Barrel came into being. The inspiration for the store came after college, when Segal and his bride, Carole, travelled across Europe. "We found quality cookware in France and interesting pottery in Denmark," says Segal. "We were 23 years old, and a year out of university. We didn't like the gifts we had got for our wedding, and the things that we saw in the marketplace in Europe, and the Caribbean were beautiful and inexpensive. We had never seen anything like these in Chicago.
"A year later, I was washing dishes and an [idea came to me]. ‘How come there is no store that stocks such items,' I asked my wife. ‘There must be other young couples like us who don't have so much money but would appreciate such items'. So I said to her, ‘Let's open a store!' Initially, my wife was not so enthusiastic, but I prevailed."
It wasn't all that easy though. "We did a little financial planning and decided we needed about $20,000 capital," reminisces Segal. "We had about $10,000. I ran around for six months trying to raise the rest. I kept saying I got this idea for a business and you get to own half the business if you invest the rest. No one did. Finally, a very successful businessman gave me the most valuable lesson in business ever. He said, ‘If I lend you the money and you are unsuccessful I am going to be an unhappy partner. If you are successful and I own half your company, you are going to be unhappy.' So I went to my father who lent me $7,000, which was every penny he had then."
After spending about $10,000 on merchandise from Denmark, Sweden and Belgium, they only had $7,000 left for making an old and dirty factory site that was to be their store presentable in just 17 days.
"My wife was very clever," says Segal proudly. "When the packing crates and merchandise came in, we just pitched them over, [to use as display cases] and we said, ‘Let's call the store Crate & Barrel' for that's all there was. So, it became a sort of counter-culture store of the sixties in America.
"We went directly to Europe and bought from some small factories, to avoid the wholesaler/middleman. So we picked up the stuff for about a dollar and a quarter and sold it for two dollars and ninety five cents. We did away with the wholesaler totally and the consumer got his product at half the price the other stores sold it at. Of course, we got into it not knowing the complexity, or the risk we were taking. But we did it."
But it was more than just money for the Segals. "We wanted to meet these artisans, we wanted to see these factories, we wanted to travel, and we thought it would be much more fun," say Segal, a twinkle in his eye. "We weren't thinking of building a big chain, or building a big business. It just became more and more successful.
"We started Crate & Barrel with $17,000, and today its worth $1.2 billion. We employ 7,000 people."
'We are in it together'
The concept - that good taste doesn't have to cost a lot of money - worked, and how. "We travelled the world, and 30 per cent of our products come from Europe, 40 per cent from Asia, and 30-35 per cent from the United States," says Segal. "All over the world we are developing products. We know the best factories to make the best products. They like doing business with Crate & Barrel because we are honest, transparent, pay our bills, have very competitive prices and the best quality. We are very loyal. We build long-term relationships."
Segal has been variously described as brilliant, and an innovative genius, and his strong point, say rivals, is that he makes people want to buy. "My wife would not agree with any of that!" he grins self-deprecatingly when asked which of those he would agree with.
"Hopefully, we know how to make people buy something. Our whole life has been devoted to finding beautiful things and finding the right price that people would be willing to pay for them. And by visual display, by conversation, by advice and help, we can help them buy something wonderful for their home. That is really what I am good at.
"I am good at getting people motivated. It's about keeping hundreds of people motivated and devoted to the same concept. What we are able to do is bring together a big team, it's not just the top three great guys; it's about 40 great guys driving the ideas of how they should function.
"It happens over time, it's done with great care, it's motivated to be successful and not just motivated to make money."
A fine lesson
Segal feels that what makes Crate & Barrel different is the attitude. "There is a big difference in saying ‘Let's do a really good job and customers will like us and then we will look at profit', rather than saying first, ‘How can we make a lot of money, let's do something to make money'. We make sure that it's the former, not the latter."
But Segal has no illusions about his company. "We are far from being perfect and what we are really good at is speaking and motivating and teaching," he says. "The core of the organisation is the driving force of school teachers who joined us starting with my wife who was a school teacher, my mother who was also a school teacher… Four of our key people were school teachers. We believe that if we educate our staff, they will educate our customers."
Training, says Segal, is for dogs and cats. People, he believes, must be educated.
Segal not only believes in delegating work, he also knows when it's time to move on. He relinquished the reins to Barbara Turf in 2008 when he felt the pace stepping up. "Barbara stepped up and now I am the founder chairman of the company, but no longer active in the day to day running of the operations,' he says easily. "My role has changed now. But I am still very active."
As is evident at the Crate & Barrel store in Dubai. He moves to a salesperson to coach her on the finer aspects of selling. "You have to have a personal equation with everything you sell," he says. "Like for instance, what does this piece [a cheery ceramic photo frame] remind you of?" The girl relates her thoughts while he listens encouragingly.
It doesn't take long for you begin viewing the frame in a completely new light.
