That Entrepreneurial Spirit
By Richard Wright
Karen Galindo is well known in the Patio Furniture industry. She’s known as someone who works hard, knows the business, and speaks her mind. She doesn’t like manufacturers who compete against her with their own stores; nor does she like manufacturers who sell to Internet sellers.
Hearth & Home: Let’s begin way back. When did your folks start the Greenhouse Mall?
Karen Galindo: “In 1977 they opened up a Greenhouse store; in 1978, they added patio furniture. In 1994 my parents retired and Paul and I took over. We have been running it for 25 years. Tracy (Wolfrom) came on board with us as well. We ran the single store, in Austin, up until about 2002, and then we opened a store in San Antonio, and in 2008 we opened our Bee Cave location, which is in west Austin, and then we opened Exteriors (a Designers’ Showroom) in 2009.”
You kept yourself pretty busy opening stores, didn’t you?
Galindo: “I guess so. All the store moves were good moves. We were glad we opened all the stores and now, of course, we’re closing all the stores. I think it will be a mad rush to see who moves into the Austin market when we vacate. Someone is going to.”
When you put up a designers’ showroom in Austin, did that work out well for you?
Galindo: “Yes, it did for a long time and then we finally closed it because we found the designers were working online and working on the phone; they weren’t working in our showroom anymore. But it worked for a long time and then we moved it onto our premises here. We also went more into the commercial end – hotels, restaurants, etc. – and that was a good move, too. I think designers have lost a lot of their business.”
What year did you and Paul hook up?
Galindo: “In 1987 we met at the University of Texas, and in 1992 we got married.”
At one time, Paul was a practicing lawyer, wasn’t he?
Galindo: “Yes. He was a lawyer. I’ve worked in this business since I was 11 years old, selling patio furniture and greenhouses. I told Paul, ‘If you don’t come work with me, you will never see me again because I will be in that business 24/7.’ He quit his job and came to work with me in retail, and we’ve loved it ever since.”
That makes for a very good team, doesn’t it? I suspect he did all the books and handled all finance?
Galindo: “It does. Yes, he was Mr. Tort. He would run around and tell us ‘That’s a trip hazard. You need to mop that up. We need to do this.’ Paul is a very cautious person, and it’s good to have someone like that on your team, someone who is a rule follower.”
Well, I’ve always known you needed a leash, but I didn’t know it was Paul.
Galindo: “That’s true, too. That’s hilarious!”
Anything else about Paul?
Galindo: “Not really. We got out of the greenhouse business when we rebranded in 2012, and we were also doing playsets by then. Other than that, we’re kind of the classic American story of patio furniture retailers. We started out and we just added on and added on and then one day we decided not to do it anymore.”
That must have been a very tough decision.
Galindo: “Extremely. That has been the hardest decision of my life, bar none.”
Let me get some more background information. When Lehman Brothers collapsed, the Great Recession hit, and the patio industry felt the pain. Did your company get hurt dramatically?
Galindo: “We were down 25%, but we fared better than a lot of our friends who were in Florida and California, in those kinds of markets. Did we feel it? Absolutely, but we didn’t feel it to the extent that all those guys felt it.”
Why do you think that was the case?
Galindo: “Because Texas is more insulated than other markets. I think Texas was healthier economy-wise, and that’s the only reason.”
Well, Texas in many ways is its own country, isn’t it?
Galindo: “That’s true, and many Texans here agree.”
Was your rebranding successful? I know you spent, what, a little over a million dollars in rebranding?
Galindo: “Yes. The rebranding was definitely successful, and we’re glad we did it. We needed to do it, and I said at the time, ‘You either make the decision to update your stores, or the decision gets made for you.’ It gave us a really, really fresh look. Customers appreciated it. So without a doubt it was the right thing to do.
“However, it was a tough and excruciating thing to do because we were still open during the renovation. I would advocate that as many disrupters as there are in the market now, with all these beautiful facilities and façades and shopping centers, it’s more important than ever that stores look good.
“As Mom-and-Pop stores, we have trouble competing with these mass merchant stores that always look great and have people who are entirely dedicated to how they look. Mom-and-Pop stores can’t do that. We have to wear a lot of hats. So I would say, it’s time for everyone to look around and see if they need to update their façades.”
It has been said many times that a gallon of paint doesn’t cost a lot of money.
Galindo: “Yes, there is stuff you can do.”
#16 Karen wanted to write, produce, and record a song, so she began by taking voice lessons. (Click here to see and hear the final product on YouTube).
#10 Karen has always been terrified of heights, but she made it to the top of a small mountain called Tent Rocks in Cochiti Pueblo, New Mexico.
You told me at one point that, after rebranding, after the first year, your traffic was down, but sales were up a bit. Did that continue that way?
Galindo: “I would say sales stayed steady and, yes, I would say traffic counts are down, which is really detrimental to us as an industry because it makes every customer who walks through that door more valuable. I think most of us would admit the traffic counts are down, and I blame that on things such as Amazon and the Internet. The reason that sales are up is because people who are coming in are spending more, and they are definitely dedicated to the products that we sell, so we better have those products. I think that it’s a scary trend that traffic counts are down.”
You are now closing stores. Why not sell them? Is it because you can sell the land?
Galindo: “Yes. I am going to sell the land because the land is valuable and I advocate to any retailer out there, if you can afford your location that is probably the smartest thing you can do in terms of a retirement plan. I am not going to owner-finance someone to come in and run my company into the ground, and then I’m liable for it. I will get my money out doing a GRB (Graduated Retirement Benefit). I could have sold it to someone, but I don’t want to take the risk. It’s too risky, and I know that has happened in our industry.”
Well, you’re fortunate that your land is so valuable where you are.
Galindo: “Yes, in Austin and San Antonio. We own two of our three stores.”
What about key changes in the industry over the years? When I started covering the industry in 1989, I believe it was a friendlier place.
Galindo: “Oh, I agree.”
I remember going to the Apollo Awards banquet and every woman was dressed to the nine’s and everybody was in a jovial mood. This was still a new category, and they were doing well. Now I feel a different vibe when I go to the Merchandise Mart, and at times some manufacturers are kind of rude.
Galindo: “I think there has definitely been a shift. A lot of the players have changed, and it doesn’t feel as personal anymore. The thing about the industry is that it was always so tiny and personal; we always said it was like high school. You would walk down the hall and see everyone. We were all close friends then. Now some big companies have moved in that are not as friendly, or not as personal, and it has changed the vibe of the industry.
“Leaving it is one of the hardest things that I had to decide, because I truly and honestly love our industry. It has been my entire life. I feel 100% connected to it, and I wonder if I will have an identity when I am no longer a patio furniture retailer. Will I still have that? What is my identity going to be, because that’s all I know. So it has made it a tiny, tiny bit easier by the fact that I don’t feel like it’s personal anymore.”
What about key changes in the industry? When you look back, what were the major changes? Was it when Sunbrella finally was accepted by retailers and by consumers? Was it when you got rid of strap furniture and started doing...
Galindo: “Oh, my gosh. From my perspective, from 1977, sometimes we come across old photos and we die laughing at what products looked like because they looked so basic and so old fashioned. I would say probably the biggest change is when cushions became mainstream and people started buying chat sets. Terri Lee (Rogers, president of OW Lee) invented the chat set, and people started buying chat sets instead of dining sets, or they started buying living room deep-seating collections as opposed to dining sets.
“I would say that one of the biggest shifts was the improvement of materials that allowed for that living room look as opposed to just a patio set look. I think that we are seeing a lot of interesting materials coming out now in terms of, say, wood synthetics. I think that is going to be something that changes what people buy quite a bit because consumers are so attracted to it. What else do I think accounts for change? The types of houses that consumers are building in terms of the space for patios.”
Absolutely, but when you say cushions, wasn’t Sunbrella a major part of that where people said, ‘That’s terrific. It’s a fabric I can leave outside,’ or not?
Galindo: “Glen Raven has done a brilliant job of branding Sunbrella. Sunbrella is the only brand that we have in our industry that the consumer recognizes by name. Consumers come in asking for it by name. They did a brilliant job of helping to transform the industry in terms of what we are able to sell because, before cushions came on the market, it was all strap and then sling furniture.”
I remember being in a small town in Mexico with my wife Jackie, about 10 years ago, and we were walking down a dirt road, very rural, and all of a sudden we saw a couple of shops and in one of the shop windows it said, “We carry Sunbrella.”
Galindo: “Oh, that is hilarious!”
What other changes in the industry? What about when synthetic woven goods came out?
Galindo: “The synthetic woven products were so dramatically beautiful to all of us because, prior to that, we were just bending metal. Consumers responded to it so well, and I think Lane Venture was the big mover and shaker. I credit Art Thompson for all his marketing, for all the magnificent beauty of the products that they made in terms of getting those lifestyle shots in front of the customers. He was a real innovator in our industry. Lane Venture was light years ahead of the rest of us when it came to marketing and merchandising and showing a lifestyle. I think he was as good as it gets.”
I agree. He was one of my favorite people. Any other pivot points that you can recall?
Galindo: “So we have gone through all our different categories, right? We have the cast aluminum and the woven, and then extruded aluminum regained a lot of popularity recently. The next trend, I feel, is Realisteak by Klaussner. It is a synthetic teak that looks just like slightly weathered teak, but is all synthetic and does not weather or require maintenance.
“The consumer either doesn’t realize or doesn’t understand what wood is really about. That is when we get our hands on them and we explain, ‘Well, if you buy this Gloster product, it’s an example of a synthetic and it looks like this forever. You don’t have to do anything to it.’ I think that is going to be another big category coming up. It has been for us already.”
What about your customers through the years? Were they much nicer in the past?
Galindo: “Yes, everyone was nicer and more patient. I remember when 9/11 happened, all of a sudden people got nice again – for a little while. The consumer trend toward being hostile to retailers has been going on for a long time, and it certainly isn’t made better by people like Amazon. The consumer gives so much leeway and love to Amazon, and they’re not doing a thing for them.
“A lot of times the product is mis-represented and by the time it arrives at the consumer’s home it is not what they thought it would be. I think that makes people meaner, because we can’t be as responsive as people want us to be, especially as life gets harder. We ask our guys to drive around these big panel trucks and make deliveries in rush hour traffic. It’s ridiculous.”
#50 Number 50 on the Galindo list was driving a tank and crushing an old car.
Hmmm, people seem wired. They seem uptight. Life isn’t slow, it’s too fast. That appears to play right into the hands of the patio furniture industry. Consumers should be coveting Outdoor Rooms in which to relax, be with the family, enjoy some music, and have a cocktail. Is that your view?
Galindo: “I think that people want to find ways to relax more, but I don’t think there has been a time in my life when I have been less relaxed; I blame the cell phones. The cell phone keeps us wired at all times. Now we go outside and we’re still on our devices, right? But at least we have a comfortable place to sit and maybe we can commune with nature a little bit. I think that relaxation in this country has changed dramatically; we just don’t relax like we used to. I think we all multitask to the point where it makes us sick.”
Exactly. When did you purchase your second home in Santa Fe?
Galindo: “In 2011.”
You also started a patio shop there, correct?
Galindo: “I did, and I partnered with some designers. One of them got really sick and couldn’t do it anymore, so we closed it down. Now I’m going to have a lady’s retail boutique on Canyon Road in Santa Fe.”
What kind of goods will you be carrying?
Galindo: “Leather and jewelry and clothing. So I’ll still be a retailer. I’m just going to do it in fashion now. I’m looking forward to it; this will be my Phase II. Hopefully we will be able to open in a couple of weeks (around the middle to end of July). The fact that we are closing three stores and opening a new one – all at the same time – is ridiculous!”
Is it difficult for you to be leaving a great business that you created?
Galindo: “Honestly, the hardest part for me is going to be saying goodbye to vendors that I’ve had for 30 years, and not being a part of the industry anymore. Truly, I will shed tears over that.”
I hear a customer in the background. Go sell something, I’ll call back tomorrow.
(A day later)
We were going to talk about manufacturers, and you’ve had some great ones; you created great partnerships with these people. Talk to me about that.
Galindo: “We have had some 30-year relationships with some of our factories. I have no doubt there are other people circling around the Austin market now that they have heard that we are leaving. We really did believe in the partnership model with our factories, so I think it’s going to be tough for people like Terri Lee Rogers, and the nice folks at Homecrest, and people like Jensen Leisure. We’ve formed some really good relationships – TUUCI and Treasure Garden are good examples. I’ve just named a handful of them, but it’s going to be really, really tough to leave those guys behind.”
Did you find many quality problems through the years?
Galindo: “Very few. We always clung to the high-end, and when you deal with high-end products the quality issues are negligible.”
What about pricing of the products? You’re in very wealthy areas in Austin and San Antonio, so you probably had no problem with the cost of goods, right?
Galindo: “No, I don’t agree with that. I think the consumer has been dumbed down so much by the mass merchants, and even by different players on the Internet, that they don’t consider what we are asking patio furniture to do in terms of being outside in a climate such as that of Texas, with the wind and the rain and the heat and the sun.
“They don’t think about it in terms of, ‘Okay, I’m buying this $800 chair that is going to last me for the next 20 years and I might have to replace the cushion in 10 years.’ They don’t give it the value that it deserves. I think the American consumer is being dumbed down by the mass merchants.”
“That was one of the best things I did, and one of the most memorable,” Karen said.
What about competition? Do you have much in your areas?
Galindo: “The biggest competition probably was the Internet and Restoration Hardware. We, of course, had other Mom-and-Pop stores, and we had Chair King. I would say the biggest problem is getting footprints in the door, just getting people to come out and shop specialty. In our industry we’re seeing the degradation of that.”
That kind of surprises me because I think a good specialty store is fun to shop.
Galindo: “I do too, but you and I are a dying breed. It gets harder and harder to get people in the door.”
Almost all the patio products are designed by men, but the buyers are all women. That seems a little out of balance, doesn’t it?
Galindo: “Yes, I feel like we don’t have enough of the female perspective, and you’re absolutely 100% right – we deal with a female customer. I hate to say this, but that is one reason OW Lee is doing so well, because it’s run by Terri Rogers who is a female. There are not enough women in our industry, and I wonder why that is.”
But at OW Lee, who is doing the design? The son, Paul Rogers, right?
Galindo: “I know. But he must get feedback from Terri.”
Ed. Note: We contacted Paul’s sister, Leisa McCollister, to get the real skinny: “Paul presents designs to us (usually 10-12),” she says, “and we narrow it down from there with input from our product development committee which includes myself, my mom (Terri Lee), my uncle Chris Goff, who is in charge of operations, and a few other key employees. Paul really drives the whole process from conception to sourcing materials to even styling the photo shoots and showrooms, but we all have input.”
Is there anything else that you would like to get out?
Galindo: “Just my appreciation for everything that the factories have done for us over the years. The only reason we were successful was because they helped us be successful, and I just hope that they will keep doing what they are doing in terms of creating products that are light years ahead of what the mass merchants are doing. That’s the only thing that is keeping us going in a forward motion.
“I would like to publicly apologize for leaving them (laughs). All good things come to an end, and I guess we do, too.”