[00:00:00 - 00:03:23]
Will Smith: Brand is not a feature of businesses that we typically see down here in.
The lower lower middle market.
Sure there might be some local name recognition for that plumbing business, but a true consumer brand, one that anchors its product or service in quality that means enough to command premium prices. A business like this is unusual. Well, one of the most respected small business acquirers in our world, Chenmark, recently bought just such a business.
And Philip Hussey, who sourced and now runs it, is here to tell us all about Thos. Moser in the process to acquire it. Thos. Moser is a high end furniture maker. Think $10,000 dining room tables, think the sort of desk that Steve Jobs would buy for his home office. This is a if you know, you know company and brand and Philip's role now will be to take it to a wider audience. I comment to him about how this fundamentally consumer product company seems atypical for Chenmark.
Philip's answer is that on the contrary, durability is what Chenmark cares most about and Thos. Moser the company has demonstrated that. And then when you consider that the craftsmanship of Thos. Moser products is intended that they might endure 100 years, you see how the spirits of the two companies rhyme. Here is Philip Hussey, CEO of Thos. Moser.
Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this.
Podcast I talk to the people who do it.
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Philip Hussey welcome to Acquiring Minds.
[00:03:24 - 00:03:25]
Philip Hussey: Thank you. Great to be here.
[00:03:26 - 00:03:57]
Will Smith: Philip, you're the CEO of Thomas Moser, a high end furniture manufacturer in a recent acquisition by Chenmark.
Now Regular listeners will recognize that name.
For those who don't know, we'll explain Shenmark here in a few minutes. But, so this conversation will give us a look inside one of Chenmark's most recent acquisitions and I think, fair to say, an unusual one for Chenmark.
We'll get there, but let's start with some background on you, Philip, please.
Yeah.
[00:03:57 - 00:04:01]
Philip Hussey: Well, first of all, Will, thanks.
Thanks for having me this morning. I'm a sort of fan.
[00:04:01 - 00:04:02]
Will Smith: Fan of your.
[00:04:02 - 00:04:04]
Philip Hussey: Your work and your podcast. So excited.
Excited to be here.
[00:04:05 - 00:04:05]
Will Smith: Thank you.
[00:04:06 - 00:04:19]
Philip Hussey: So I. I guess by way of introduction, my name is Philip Hussey, sort of have the privilege of leading the Thomas Moser team. I've been in this seat coming up on 11 months. I've been in the Chenmark ecosystem for.
[00:04:19 - 00:04:21]
Will Smith: A little over five years, five and a half years.
[00:04:22 - 00:04:29]
Philip Hussey: Prior to leading Thos. Moser, I was CEO of Outer Wind Landscaping, which was, or it still is, a design build.
[00:04:30 - 00:04:43]
Will Smith: Landscaping company based on Cape Cod. And prior to that came through the Chenmark General Vice President's program, which is a leadership development program that our founders started pretty much five years ago as well.
[00:04:44 - 00:04:44]
Philip Hussey: So I'm.
[00:04:45 - 00:04:48]
Will Smith: Were you number one? Gvp number one.
[00:04:48 - 00:04:54]
Philip Hussey: There wasn't a program when I started there, technically a colleague was number one.
[00:04:54 - 00:05:06]
Will Smith: I guess, but I count myself in the first. First three, so.
So.
Okay, great. By the way, the business in question today is Moser or Moser. That.
[00:05:06 - 00:05:11]
Philip Hussey: That is a good question.
Depending on who you ask, you get different answers. I say Thomas Moser.
[00:05:11 - 00:07:13]
Will Smith: Okay. Moser, like Ja. Okay, I'm going with.
I'm going with what the CEO says. Let's now explain Chenmark a little bit. Again, a lot of people will already know. How about I take a stab and then you fill in the blanks?
Absolutely.
So Chenmark was founded by three co founders. Trish Higgins, her husband and husband's brother. So that's Trish and Palmer and James. James Higgins. Right.
I know James the least. So that's why I get a pass for momentarily blanking on his first name. James Palmer and Trish. And with the idea that. So popular now that small businesses represent a really interesting opportunity and are available for pretty low multiples and you could perhaps buy one and reinvest the earnings of that into buying more and build something really interesting.
They have gone on to do that over the last probably 10, maybe 11 or 12 years. It's quite an enterprise these days and an assemblage of a lot of small businesses that are the type that we feature on this podcast. Everything everything from as you mentioned landscaping to now furniture manufacturing to boat kind of tourist boat tours. There's a food manufacturing like a baking something in Canada and, and, and much, much more. It's really an inspiration to our community and they have this GVP program which is I guess more formalized by the year.
You were among the top three when it was kind of just getting going where part of the challenge of scaling something like chenmark is finding talent to lead these many businesses that they acquire. And so this general is vice president program is their program to kind of cultivate bench talent that then goes into, to run these businesses and I guess also go out and find them because I think that was the case. Your case. What did I miss there, Philip?
[00:07:13 - 00:07:29]
Philip Hussey: Yeah, that's exactly right.
I think you know at some point maybe you should come join the Chenmark marketing team did a fantastic job. I think the, the one of the key components that makes Chenmark special and as James likes to say the anti.
[00:07:29 - 00:07:32]
Will Smith: Private equity group is that when we're.
[00:07:33 - 00:07:42]
Philip Hussey: When we acquire business we do so with the intention to hold it forever. So much so that we actually don't include an exit valuation in our underwriting.
[00:07:42 - 00:07:48]
Will Smith: Because we actually never plan to sort of derive value from that business from selling it to somebody else.
[00:07:49 - 00:07:55]
Philip Hussey: And so you add that long term holding period in with the additional fact.
[00:07:55 - 00:08:13]
Will Smith: That we're not running money for other people so we don't have outside investors and it creates a pretty special opportunity set where we get to sort of control our own destiny and drive investments and reinvestments in our companies sort of where and how we see fit.
[00:08:14 - 00:08:23]
Philip Hussey: And that's set made a special, pretty special 10 years. And I think if you talk to James, Trish or Palmer they would say.
[00:08:23 - 00:09:09]
Will Smith: We are very much in the early innings of, of the Chenmark story.
Yeah, no, excellent, excellent additional detail there. Long term hold no outside investors that much more powerful. And yeah, I mean Chenmark's not super public about its aggregate numbers or public at all. At least I haven't seen any but I can, I can only imagine what they are today.
And this is the life's work of the three founders. So and they're only 10 years into a maybe a 50 year project. So it's going to, it's going to get scary big here over the years and, and of course the, the, the word of choice in the whole Chinmark approach is compounding. I mean the compounding effects here are going to be scary and well I.
[00:09:09 - 00:09:14]
Philip Hussey: Think I'd also add that there's a reason you don't hear a lot about Chenmark acquisitions.
[00:09:14 - 00:09:29]
Will Smith: You know, because we believe that each company should stand on its own and be able to exist without some fancy holding company or private office somewhere. But it really is a decentralized organization and.
[00:09:31 - 00:09:35]
Philip Hussey: The sort of power of chenmark is in the operating companies and not.
[00:09:35 - 00:09:53]
Will Smith: Some special sauce in an office, in some executive office building. It's people every day showing up sort of day in, day out doing the work.
And that's why we focus on our operating companies and not, you know, how to build a holding company or the.
[00:09:53 - 00:09:56]
Philip Hussey: Special, special ingredients of making a deal.
[00:09:56 - 00:10:30]
Will Smith: Sometimes it's just about doing it.
Yeah. Well, another great detail that you added there, Philip, because I subscribed to Chenmark's newsletter which comes out every Friday night, evening, and they're usually kind of short thought pieces on the knife fight of, of small business.
Yes, it's not about, sometimes there's big picture stuff about building something big, but oftentimes it's about the in the trenches realities of what, of what this, of what Chenmark's building and how it's just the, the uncomfortable blocking and tackling of small business.
[00:10:30 - 00:10:38]
Philip Hussey: The fun block, blocking and tackling, that's the job. So everyone likes to talk about capital, capital allocation, but that is such a.
[00:10:38 - 00:10:55]
Will Smith: Fraction of what any operator will do, as most of your listeners probably know.
Well, so you said, Philip, that you were five years in the Chenmark ecosystem.
So we don't need to hear the whole. But you know, give us a. What, what, what does that mean? And then how did, how did things change to where you are now?
[00:10:56 - 00:11:02]
Philip Hussey: So I joined Chenmark right out of business school.
I say I went to business school to learn where Excel is on the computer.
[00:11:02 - 00:11:04]
Will Smith: I'm proud to report I found it.
[00:11:05 - 00:11:16]
Philip Hussey: And so nowhere it is today. But I joined right in 2020. It was Covid.
There was no formal program, there was no job posting.
[00:11:16 - 00:11:25]
Will Smith: But I gotten to know Trish through various conferences in the sort of greater southern Maine area before business school. As I born and bred in Mainer.
[00:11:25 - 00:11:33]
Philip Hussey: And called Trish and said just to network. She said, what are you doing after school?
I said, I have no idea. She said, why don't you come work for us?
[00:11:33 - 00:11:36]
Will Smith: I said, great. And it was pretty much that simple.
[00:11:37 - 00:11:44]
Philip Hussey: And early on I joined one of our landscaping companies in southern Maine.
There was no outbound sales team, so.
[00:11:44 - 00:11:46]
Will Smith: I joined to sort of lead and.
[00:11:46 - 00:11:57]
Philip Hussey: Grow an outbound sales sales team. That company did a tuck in acquisition. So I moved companies anyway 20 minutes north to Lead lead a branch of one of our landscaping companies.
[00:11:58 - 00:12:06]
Will Smith: About nine months after that an opportunity came up to run our company on Cape Cod. And I sort of said that sounds.
[00:12:06 - 00:12:11]
Philip Hussey: Like fun, that sounds like a challenge and jumped in for three years down.
[00:12:11 - 00:12:22]
Will Smith: On Cape Cod leading that company with the idea that Maine is home. My wife still lived, lived in Maine and I wanted to find a way to get home.
[00:12:23 - 00:12:28]
Philip Hussey: So always had sort of one eye back back up north talking to folks.
[00:12:28 - 00:13:13]
Will Smith: Looking for opportunities, knowing that at some day I wanted the the idea was to live in Maine and run a company in Maine and was lucky enough that Thomas Moser sort of crossed our radar on a couple different fronts and it worked out.
Right. So in this main point is is also another good detail. So Chenmark itself, Chenmark Corporate in quotes is in is in Portland, Maine.
You are a Mainer. And Thomas Moer, the acquisition that we're going to talk about today, also a Maine based business, Chedmark Buy as we just heard, Chenmark buys businesses outside of Maine and outside of New England in fact. But I assume they're, they kind of have a concentration of business their businesses is in that region, correct?
Yeah.
[00:13:13 - 00:13:19]
Philip Hussey: About a third of our companies are in New England and then we have collection in the Southeast.
[00:13:19 - 00:14:49]
Will Smith: We have a handful in Canada and one in the Midwest now as well.
Great quick aside but I think valuable for the audience so I, I'll bring this home, I promise. I just had another interview with Robert Gayden who bought a home care business and we talked about how when he first got into the business he was really focused on operations and learning the operations and, and creating efficiencies and improving the operations, refining them and less on growing the top line, less on good old FA fashioned sales and marketing. And we kind of have this conversation around. We do a segment where it's my observation is that many searchers are focused on improving operations.
That's their the first thing that they think about because perhaps they're just, they go in with a certain bias because the narrative in Search Land is that these small businesses are so inefficient and you can pull a few, you know, make a few tweaks and you know, free up some cash flow.
But.
Then this was a reference to another conversation that in fact maybe the best lever of all to pull is just growing sales like any business.
So I'm just interested to hear that.
You stood up a sales, a formal sales operation in a landscaping business and any thoughts on that on.
On sales and small business broadly?
[00:14:50 - 00:15:12]
Philip Hussey: A A lot of thoughts. I Don't know if I have it figured out. I think al always very much a learning process but the related to the landscaping world. The what what I found is the best way to grow sales is to get out there and do it yourself.
And, and you can hire sales reps.
[00:15:12 - 00:15:15]
Will Smith: And you can try and go, you.
[00:15:15 - 00:15:19]
Philip Hussey: Know, send a million emails, but the only way to learn is to pick.
[00:15:19 - 00:15:20]
Will Smith: Up the phone and call.
[00:15:20 - 00:15:32]
Philip Hussey: And so when I my first job is at this business essentially was looking at Google Maps, finding large parking lots, calling the facilities director and say can we plow your lot and log that.
[00:15:32 - 00:16:07]
Will Smith: We were using HubSpot at the time. Log that in the CRM and then make sure you call them every year for the next two years, three years and eventually they come around. And so it is very much a. I like to say sales is a contact sport. The best way to do it is to do it. And you can't over engineer your way to success.
It's sort of short term compounding do the activities and good things will follow consistently. Right. And that's the key.
And do you feel Philip, that many small businesses are under sailed?
[00:16:09 - 00:16:15]
Philip Hussey: That's, that's a good question. Oftentimes I think it's the hardest part.
[00:16:15 - 00:16:29]
Will Smith: To invest time and energy and attention because you're trying to. It's harder to imagine what could be particularly in small business it sales is such a relationship game that oftentimes the.
[00:16:29 - 00:16:32]
Philip Hussey: Owners own the relationships and they get.
[00:16:32 - 00:16:41]
Will Smith: To call a buddy up. If it's in the landscaping world, they know the property managers, they've been working with them for 20 years. It's more natural, right. They're sort of already ingrained in those communities.
[00:16:42 - 00:16:44]
Philip Hussey: If you're not, you have to make.
[00:16:44 - 00:16:47]
Will Smith: An sort of extra effort effort to.
[00:16:47 - 00:16:49]
Philip Hussey: Get into those communities, get into those.
[00:16:49 - 00:16:50]
Will Smith: Networks and show up.
[00:16:50 - 00:16:56]
Philip Hussey: It's less of a cold call. Hey, can I plow your lot?
But how do you go to the chamber event?
[00:16:56 - 00:17:03]
Will Smith: How do you sponsor the little league games and consistently be there? And that's how you build trust sort of.
[00:17:03 - 00:17:05]
Philip Hussey: No matter how good your drip email.
[00:17:05 - 00:17:18]
Will Smith: Campaigns are on like pretty pictures of snow removal, that doesn't, that doesn't build trust, right?
Showing up with, with a six pack or with some collateral or sponsoring a.
[00:17:18 - 00:17:22]
Philip Hussey: Little league team or grabbing a meal, that builds trust.
[00:17:22 - 00:18:43]
Will Smith: And ultimately at least what I've found in B2B sales, it's about relationships first and then value second.
What do the following acquiring minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shah, Shane Ursam they all went through the Acquisition Lab, the accelerator in community.
For people serious about buying a business.
But they represent just a sliver of.
The Lab's success stories.
The number of deals across the Lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you.
To the very idea of buying a business.
The Lab offers a month long, intensive, almost daily Q and A sessions with advisors, live deal reviews with Walker, deal team introductions, and an active community of serious searchers. Check out acquisitionlab.com, link in the notes or email the Lab's co founder, Chelsea wood Chelseie.
Then build.com let's return to your story. So how does Thos. Moser appear on the radar of you of Chenmark?
[00:18:45 - 00:18:48]
Philip Hussey: So growing up in Maine, I've known.
[00:18:48 - 00:19:22]
Will Smith: About Thos. Moser since before before I can remember. I grew up also in a main family business, a main family manufacturing business in southern Maine and so followed generally main businesses and main family businesses my entire life. I had a front row seat to our our family's business as my dad ran it for for 25 years and so was always intrigued about the main business community. And the brand that Tom and his wife Mary built here is iconic.
The furniture is incredible. They have a amazing story.
[00:19:22 - 00:19:33]
Philip Hussey: So Mo, I'd say most Mainers, at least in the business, in the business world and beyond, know about Moser. And so as I was, I never stopped searching for main businesses while I.
[00:19:33 - 00:19:36]
Will Smith: Was in Cape Cod.
And so I when I was home.
[00:19:36 - 00:19:40]
Philip Hussey: On the weekends, I'd send notes at night, etc.
[00:19:41 - 00:19:44]
Will Smith: And was lucky enough that the Mosers responded to one of my, one of.
[00:19:44 - 00:19:47]
Philip Hussey: My emails sort of simultaneously.
[00:19:47 - 00:19:55]
Will Smith: They had a advisory board who had a connection, sort of a second degree connection to Trish, one of the GenMark Partners.
[00:19:55 - 00:20:00]
Philip Hussey: And both, both of those sort of emails collided at the same time, you.
[00:20:00 - 00:20:11]
Will Smith: Could say, and presented the opportunity that the Moser family was starting to think about a transition and heard there was another family family business in Portland who.
[00:20:11 - 00:20:15]
Philip Hussey: Buys and you know, hold small businesses.
[00:20:15 - 00:20:52]
Will Smith: And would we be up for a conversation. And we were off to the races from there.
And that first conversation or first email I believe was in March of 2024.
Okay, year and a half ago. And when you sent your outreach to the Mosers, was it part of some sort of kind of drip campaign or, or I should say kind of cold? Well, it was cold I guess how personalized manual was this email?
Did you completely manual why?
And why it wasn't just in there with a hundred other emails that went out in some automated drip.
[00:20:53 - 00:20:57]
Philip Hussey: No, that generally that's not. That certainly wasn't my process and that's.
[00:20:58 - 00:21:00]
Will Smith: Not generally the GenMark process.
[00:21:01 - 00:21:03]
Philip Hussey: The I actually I had a connection.
[00:21:03 - 00:21:05]
Will Smith: I had sailed growing up with one.
[00:21:05 - 00:21:08]
Philip Hussey: Of the Moer grandsons so knew the.
[00:21:08 - 00:21:16]
Will Smith: Family at least tangentially had given or at least had been around Moser gifts being given before.
[00:21:16 - 00:21:18]
Philip Hussey: Just it's a very personal story and.
[00:21:20 - 00:21:31]
Will Smith: I tried to draw the main family business connection and the more personal an email is, the more likely you know, some somebody's going to respond to it.
And who in the family did would you send this email to?
[00:21:31 - 00:21:34]
Philip Hussey: I sent it to the his title as chairman of the board.
[00:21:34 - 00:21:44]
Will Smith: He was Tom's son Aaron at the time and he had run the business for a while and then was in a board chair role.
It's okay.
[00:21:44 - 00:21:45]
Philip Hussey: Okay, great.
[00:21:45 - 00:22:20]
Will Smith: And at Chenmark as a GVP or effective GVP as you were.
So does that means that you also search or there's the expectation that you're eventually going to be the actual the one to do a search and find a business to bring into Chenmark. Say more about that.
So the, the leadership development program, our GVP program has three stages. Your first stage you'll come in to what I'll say is hq, which makes it sound bigger and fancier than it is, but that's either in Portland or now we have a regional office in Nashville.
[00:22:20 - 00:22:24]
Philip Hussey: And so you'll spend, I don't know, call it six months to a year.
[00:22:24 - 00:22:29]
Will Smith: And these are sort of rough timelines. But in stage one where you'll both.
[00:22:29 - 00:22:32]
Philip Hussey: Do some search activities so connecting with.
[00:22:32 - 00:22:41]
Will Smith: Small business owners, brokers, you know, sort of adjacent accountants, lawyers, etc, sharing the Chenmark story and, and you'll also do.
[00:22:41 - 00:22:45]
Philip Hussey: Consulting projects for any, any one of.
[00:22:45 - 00:22:50]
Will Smith: Our small businesses just to start to learn what life, life in a small business is like.
[00:22:51 - 00:22:53]
Philip Hussey: After that you move into what we.
[00:22:53 - 00:22:56]
Will Smith: Call stage two, which is a leadership.
[00:22:56 - 00:22:59]
Philip Hussey: Position on a, an executive team on one of our small businesses.
[00:22:59 - 00:23:02]
Will Smith: So you'll go be the cfo, coo.
[00:23:02 - 00:23:05]
Philip Hussey: Head of sales, chief, people officer, sort.
[00:23:05 - 00:23:11]
Will Smith: Of any number of positions based on the needs of any one of our operating companies. Again, you'll do that from a year.
[00:23:11 - 00:23:13]
Philip Hussey: To, you know, four years and beyond.
[00:23:13 - 00:23:21]
Will Smith: Depending on your situation, the company's needs, the skills you need, etc.
And then as we are onboarding new.
[00:23:21 - 00:23:24]
Philip Hussey: Companies, anybody in our number who's one.
[00:23:24 - 00:23:36]
Will Smith: Of our number twos has the option to raise their hand and I'll say apply in quotes to run the new operating company. So the odds are, I'd say you.
[00:23:36 - 00:23:38]
Philip Hussey: Probably won't run the company that you.
[00:23:38 - 00:23:50]
Will Smith: Find because you may source it or have a great conversation early in stage one, and that may lead to an acquisition five years down the road, but there's no presumed ownership.
[00:23:51 - 00:23:54]
Philip Hussey: What we like to say is search is a team sport.
[00:23:54 - 00:24:15]
Will Smith: And we do that by going out and having just great interactions with people and specifically small business owners and people who know small business owners. And the idea is that when they're ready to transition, they'll remember us and that we'll stay in touch. And even if it's seven years from now, we can sort of authentically say we're going to be here and if.
[00:24:15 - 00:24:16]
Philip Hussey: We can help, call us.
[00:24:16 - 00:24:53]
Will Smith: And if it's a good fit for us, great. Would, you know, love to take a look. And if it's not, maybe we can help you find somebody who would be a good fit and so try and be able to fill that matchmaker role as well.
But you were far along enough in your tenure at Chenmark to and also source the deal to.
And it was in Maine, which I assume you'd communicated to Chenmark, your bosses that you wanted to get back to at some point, that it was. If you guys got. If you guys did in fact go through with buying Thomas Mosier, that you'd be the obvious candidate to run it.
Generally.
Yeah.
[00:24:53 - 00:24:54]
Philip Hussey: When I accepted the position on the.
[00:24:54 - 00:24:59]
Will Smith: Cape, it was with the understanding that eventually I'd come back to Maine, um.
[00:25:00 - 00:25:03]
Philip Hussey: And there was no sort of mandate.
[00:25:03 - 00:25:04]
Will Smith: Go find a company in Maine.
[00:25:05 - 00:25:15]
Philip Hussey: But my perspective is good things happen to people who go out and try.
And I knew if I, you know, help find a business, I'd be that.
[00:25:15 - 00:25:16]
Will Smith: Much more likely to run it.
[00:25:17 - 00:25:18]
Philip Hussey: But it.
[00:25:18 - 00:25:25]
Will Smith: We're a small enough group and sort of our mantra is be up for the adventure and know there.
[00:25:25 - 00:25:30]
Philip Hussey: There's what we have done, but what we will do is, you know, anybody's guess.
[00:25:30 - 00:26:15]
Will Smith: So super cool. All right, Philip. So now let's start turning our attention to Thomas Moer. The business itself. You have said that it's iconic in Maine.
I hadn't heard of the brand, but in ahead of our pre call, I was looking at locations that it has, retail locations which aren't many, but they are in. In some of the most premium retail markets here in Georgetown, in San Francisco. So it's a. It's a premium brand. With some retail locations that are in very select locations.
Say more about the reputation and brand of Thos. Moser.
[00:26:15 - 00:26:20]
Philip Hussey: Yeah, and maybe I'll take a step back and would it be helpful to get a brief history of the company?
[00:26:20 - 00:26:21]
Will Smith: Yeah, please.
[00:26:22 - 00:26:25]
Philip Hussey: So we were founded in 1972 by.
[00:26:25 - 00:26:26]
Will Smith: Tom Mosher and his wife Mary.
[00:26:27 - 00:26:30]
Philip Hussey: Tom was a debate professor at Bates.
[00:26:30 - 00:26:33]
Will Smith: College here in central Maine, a liberal arts college.
[00:26:33 - 00:26:39]
Philip Hussey: He came to Maine sort of through the academia world. He was orphaned at the age of.
[00:26:39 - 00:26:45]
Will Smith: 18, ended up putting himself through school, had a professorship in Michigan, and then.
[00:26:45 - 00:26:47]
Philip Hussey: Took a job at the University of.
[00:26:47 - 00:26:56]
Will Smith: Maine in the late 60s, early 70s, eventually making his way down to Bates on a tenure track position on the side.
[00:26:56 - 00:27:01]
Philip Hussey: He was always fixing stuff, fixing up homes, fixing furniture.
[00:27:03 - 00:27:10]
Will Smith: All sorts of sort of handiwork. And they had four young kids and trying to get by.
[00:27:12 - 00:27:18]
Philip Hussey: And while Tom was sort of the craftsman, Mary was the brains behind this selling this stuff.
[00:27:19 - 00:27:31]
Will Smith: And then in the early 70s, they decided they could make a go of this business. And he quit his.
His professorship job teaching debate and launched Thos. Moser Cabinet Makers.
[00:27:31 - 00:27:35]
Philip Hussey: And what was particularly special is that.
[00:27:36 - 00:27:38]
Will Smith: There were two things happening in Maine at that time.
[00:27:39 - 00:27:40]
Philip Hussey: One was the back to the land movement.
[00:27:41 - 00:27:56]
Will Smith: So you had people leaving Boston and New York, finance and legal jobs, coming to central Maine to sort of go back to the land.
And building furniture was something that those folks felt were real and authentic. So he had that pool of talent.
[00:27:56 - 00:27:59]
Philip Hussey: But he also had a Shaker community.
[00:27:59 - 00:28:10]
Will Smith: One of the last Shaker communities in the country was here in Maine. And the early furniture was Shaker inspired.
And a number of those pieces we continue to. To produce today.
[00:28:10 - 00:28:14]
Philip Hussey: And so Tom had this. This talent pool that he could tap.
[00:28:14 - 00:28:16]
Will Smith: Into to help grow the early business.
[00:28:18 - 00:28:20]
Philip Hussey: And that was in the early 70s.
[00:28:20 - 00:28:27]
Will Smith: And it expanded pretty quickly from there.
And so it started as a cabinet maker.
[00:28:27 - 00:28:33]
Philip Hussey: We called the cap. He called the cabinet making.
It was really furniture. But the people making our furniture, we.
[00:28:33 - 00:28:43]
Will Smith: Still today call cabinet makers.
Interesting. Okay, is that, is that a term of art in wood furniture manufacturing or is that just an idiosyncrasy of Thomas Moser?
[00:28:44 - 00:28:46]
Philip Hussey: That is a good question. I actually, I don't have the answer to that.
[00:28:47 - 00:29:04]
Will Smith: And you said that he was the craftsman, so he was the talent initially. But to build a business of any size, obviously there are going to be a lot of craftspeople working there. And you said that actually it was his wife who was the business minded one.
So how did that relationship between the two of them evolve in the organization?
[00:29:05 - 00:29:09]
Philip Hussey: So I can speak to as Best I know it, Tom passed away this.
[00:29:09 - 00:29:18]
Will Smith: Year in March, in his early 90s. Mary, his wife is still alive in, in her late 80s and was lucky enough to get them, get to know them both a little bit.
[00:29:19 - 00:29:22]
Philip Hussey: But Mary, I'd say was ahead of.
[00:29:22 - 00:29:29]
Will Smith: Her time on the marketing side. Early on she was ab testing ads in the New Yorker.
[00:29:29 - 00:29:39]
Philip Hussey: And what she would do is on sort of not just the New York or the magazine, but number of newspapers, the road they, where they were originally.
[00:29:39 - 00:29:49]
Will Smith: Making furniture out of a grain hall. It didn't have a house at every single address.
So imagine you have a house at 19 and a house at, you know, 42.
[00:29:49 - 00:29:51]
Philip Hussey: You have all these addresses in between.
[00:29:51 - 00:29:52]
Will Smith: That you could use.
[00:29:52 - 00:29:54]
Philip Hussey: So she would make the return address.
[00:29:54 - 00:30:01]
Will Smith: Of how people would order furniture different, different addresses on that road, knowing that.
[00:30:01 - 00:30:02]
Philip Hussey: The mailman in New Gloucester was going.
[00:30:02 - 00:30:06]
Will Smith: To get it back to Thomas Moer cabinet makers, because there was only one cabinet maker on that road.
[00:30:07 - 00:30:08]
Philip Hussey: And so that's how she was sort.
[00:30:08 - 00:30:15]
Will Smith: Of ab testing collateral before that was even a thing, which just, just blows my mind.
[00:30:16 - 00:30:21]
Philip Hussey: And the other Tom, that's so clever.
Tom was a larger than life personality as, as far as you think about.
[00:30:21 - 00:30:31]
Will Smith: Design and storytelling and connecting with architects and sort of doing what he, what.
[00:30:31 - 00:30:34]
Philip Hussey: He knew was right, regardless of the.
[00:30:34 - 00:30:37]
Will Smith: Data behind it or the sort of logic.
[00:30:37 - 00:30:40]
Philip Hussey: Just pure gut instinct, which was incredible.
[00:30:40 - 00:30:51]
Will Smith: And what you want from a designer, I'd say Mary was laser focused on making sure there was a system behind it and that there was a connection to the customer.
[00:30:52 - 00:30:54]
Philip Hussey: And between the two of them it.
[00:30:54 - 00:31:00]
Will Smith: Created a force to be reckoned with.
Yeah. What a great combination.
What a neat history.
[00:31:01 - 00:31:03]
Philip Hussey: I'd say the, the company could easily.
[00:31:03 - 00:31:16]
Will Smith: Be called Tom and Mary Moer instead of just Thomas Moer.
Okay, Philip. Well then take us up to 2025. When you reach out to them, what does the business look like then? Or 2024 last year?
[00:31:17 - 00:31:22]
Philip Hussey: Absolutely.
So there's about 100 employees here. We have 60 or so craftsmen.
[00:31:23 - 00:31:37]
Will Smith: We have four retail locations. So we have one in San Francisco, we have one in Georgetown, as you mentioned. We have one in Boston on Arlington street just off sort of the, the famous Newbury street shopping corridor.
And then we have our location in.
[00:31:37 - 00:31:40]
Philip Hussey: Freeport, Maine, just down the street from.
[00:31:40 - 00:31:41]
Will Smith: From L.L.
[00:31:41 - 00:31:41]
Philip Hussey: Bean.
[00:31:43 - 00:31:45]
Will Smith: And so those are our retail locations.
[00:31:45 - 00:31:49]
Philip Hussey: The business, about 75% of the business.
[00:31:49 - 00:31:51]
Will Smith: Is our residential business. So that's.
[00:31:51 - 00:31:53]
Philip Hussey: If you go to Thomas Moser.com you'll.
[00:31:53 - 00:32:03]
Will Smith: See a whole host of various residential products, whether it's beds or chairs or dining tables.
[00:32:03 - 00:32:05]
Philip Hussey: Or case pieces.
[00:32:05 - 00:32:07]
Will Smith: That's what we're most well known for.
[00:32:07 - 00:32:11]
Philip Hussey: That 75% of our business, 25% of.
[00:32:11 - 00:32:13]
Will Smith: Our business is what I'll call the contract world.
[00:32:13 - 00:32:23]
Philip Hussey: And so that's selling pieces of, you know, sort of pieces of furniture to large institutions.
[00:32:23 - 00:32:37]
Will Smith: Think Harvard, Yale, the New York Public Library, a whole host of prep schools up and down the east coast and even into the Midwest, generally through architects, but sometimes direct to schools.
[00:32:38 - 00:32:40]
Philip Hussey: So those are the sort of two.
[00:32:40 - 00:32:44]
Will Smith: Functions of the business.
The.
I'd say the.
[00:32:45 - 00:32:52]
Philip Hussey: From a contribution margin perspective, the contract produces more of the contribution margin than the residential line.
[00:32:52 - 00:33:28]
Will Smith: But the residential line is hands down what has built the brand and why people know us and why people come back and feeds the design of the contract market.
And how does it work in furniture manufacturing land, you have your own stores where it's all your product does. And so like. But like a room and board or a design within reach are different.
They're not selling product that they've manufactured or they've contract manufactured it. It's got their name on it. Sort that out for us.
[00:33:28 - 00:33:29]
Philip Hussey: That's correct.
[00:33:29 - 00:33:33]
Will Smith: Yeah.
So we're vertically integrated. So everything that we sell, we build.
[00:33:34 - 00:33:38]
Philip Hussey: And that has the blessing of we own quality.
[00:33:38 - 00:33:39]
Will Smith: And we are known for quality.
[00:33:39 - 00:33:43]
Philip Hussey: And to give you a sense for this, we own quality.
[00:33:43 - 00:33:45]
Will Smith: We actually have no quality department internally.
[00:33:45 - 00:33:48]
Philip Hussey: What we do have is craftsmen sign.
[00:33:48 - 00:33:58]
Will Smith: The piece, the pieces with their signature, and they date it when they make it. And so we have people who have put thousands of pieces of furniture out into the world.
[00:34:00 - 00:34:01]
Philip Hussey: And when you're gonna.
[00:34:01 - 00:34:05]
Will Smith: Tom believed our furniture should last longer than the life of the tree that it came from.
[00:34:06 - 00:34:08]
Philip Hussey: And so we cut the trees down or we.
[00:34:09 - 00:34:20]
Will Smith: We have a partner, another family in New Hampshire that is the aggregator of our lumber. They cut trees down between 80 and 120 years old. Our furniture is designed to last at least that long.
[00:34:20 - 00:34:22]
Philip Hussey: And so when these craftsmen are signing.
[00:34:22 - 00:34:31]
Will Smith: Something that is going to be out in the world for 100 years, they want to be very proud of it, knowing that it's going to last longer than they're sort of. They'll probably be alive.
[00:34:32 - 00:34:39]
Philip Hussey: And so you combine that, the signature component, and then you ask the person next to you to.
[00:34:39 - 00:34:41]
Will Smith: We put a flashlight on every single.
[00:34:41 - 00:34:43]
Philip Hussey: Piece and you get sign off.
[00:34:43 - 00:34:46]
Will Smith: They don't actually sign the piece, but you get sign off that, hey, this.
[00:34:46 - 00:34:48]
Philip Hussey: Piece is done and it's okay to.
[00:34:48 - 00:34:53]
Will Smith: Sort of head out to shipping and to a customer. And that's our quality department, which is.
[00:34:53 - 00:35:01]
Philip Hussey: Pretty special and circling Back to the contract manufacturing question. That generally doesn't happen when you don't own your manufacturing. Right.
[00:35:01 - 00:35:06]
Will Smith: That sort of level of pride in that connectivity is rare and something that.
[00:35:06 - 00:35:08]
Philip Hussey: Makes this place special because we'll hear.
[00:35:08 - 00:35:11]
Will Smith: From customers, we'll get an email saying.
[00:35:11 - 00:35:20]
Philip Hussey: This is an incredible piece of furniture. I see Seth built it. Can you make sure he gets this email thanking him for my wedding gift? And then we walk out onto the.
[00:35:20 - 00:35:21]
Will Smith: Floor and give it to Seth.
[00:35:21 - 00:35:25]
Philip Hussey: And that creates this pretty unique flywheel.
[00:35:25 - 00:35:27]
Will Smith: Of reinforcing why quality is so important.
[00:35:29 - 00:35:32]
Philip Hussey: Unfortunately. Right. The sort of downside of owning your.
[00:35:32 - 00:35:35]
Will Smith: Own manufacturing is that the.
[00:35:36 - 00:35:39]
Philip Hussey: You have to manage capacity both in.
[00:35:39 - 00:35:41]
Will Smith: The good times and the bad times.
[00:35:41 - 00:35:43]
Philip Hussey: Somebody like room and board, who doesn't.
[00:35:43 - 00:35:51]
Will Smith: Manufacture, hey, if they're not selling through, they have the luxury of just not ordering. We don't. We don't have that luxury.
Right.
[00:35:51 - 00:35:54]
Philip Hussey: So we have craftsmen that we need.
[00:35:54 - 00:36:06]
Will Smith: To keep going here in Auburn, Maine. And you don't have as much flexibility in ramping up or down. Down your manufacturing component.
[00:36:07 - 00:36:16]
Philip Hussey: And so sometimes I envy those. Those traditional sort of retailers just own the brand. But when you look at the furniture.
[00:36:16 - 00:36:22]
Will Smith: We don't really compete against them because of the quality that we're making and the relationships we have with our customers.
[00:36:22 - 00:36:25]
Philip Hussey: So it's easier, but I don't think it's better.
[00:36:27 - 00:36:32]
Will Smith: I'm sure that they would have all kinds of reasons why. Why their business model is challenging.
[00:36:32 - 00:36:36]
Philip Hussey: Like, I'm sure. Yeah, I'm sure. I'm sure.
Yeah, yeah.
[00:36:37 - 00:36:38]
Will Smith: But we have those.
[00:36:38 - 00:36:41]
Philip Hussey: We have those challenges too, though. Right. Because we, we have the.
[00:36:41 - 00:36:44]
Will Smith: We have the storefronts. We don't have as many as they do.
Right.
[00:36:44 - 00:36:54]
Philip Hussey: But we're still. If you're competing for store frontage and attention, units and eyeballs online and all of these things, we do that too.
[00:36:54 - 00:37:08]
Will Smith: Absolutely.
So, yeah, yeah, great point.
And so give us a picture of.
The business, like, from a financial perspective. How, you know, what does that look like in 2024 when you start looking.
Sure.
[00:37:08 - 00:37:15]
Philip Hussey: So doing about $20 million plus or minus in.
[00:37:15 - 00:37:28]
Will Smith: In revenue, I'd say there's about a 5% margin, sort of EBITDA margin on it, which candidly showed us there was.
[00:37:28 - 00:37:31]
Philip Hussey: A lot of room for opportunity because it's an incredible brand.
[00:37:31 - 00:37:39]
Will Smith: So the idea was that the brand was worth more than the business.
And how can we tap into that to.
[00:37:40 - 00:37:41]
Philip Hussey: To.
[00:37:41 - 00:38:27]
Will Smith: To go drive value for everybody at the company?
So that's really interesting. So just to underline this for everybody, this is a business with this incredible Brand and history and culture, but it's kind of limping along.
It's not doing that well. For $20 million business generating a million bucks in cash flow, call it, you know, 5%, that is, you would think that it could do better. And so your assessment is, you know, it should could, it could do a lot better. And we can't value this based on EBITDA loan because there's going to be a lot of goodwill allocated here in, namely in the brand. But how then do you go about valuing a brand?
[00:38:27 - 00:38:47]
Philip Hussey: So I think there's two components. There's an operating component to this and then there's the sort of deal structure component. Taking the, the latter piece first, the deal structure component, thought about it from a potential for I guess, asymmetric returns.
[00:38:48 - 00:38:51]
Will Smith: And so hey, what could write look like?
[00:38:51 - 00:39:08]
Philip Hussey: And understanding, sort of understanding who we could be.
But from a valuation perspective, we're able, from a, we're able to do it pretty in line with how we think about most of our businesses. And for all your listeners out there, right.
[00:39:08 - 00:39:10]
Will Smith: And most, you know, from.
[00:39:10 - 00:39:13]
Philip Hussey: On a multiple of ebitda, not crazy.
[00:39:15 - 00:39:19]
Will Smith: On most small business acquisitions, we're in line, sort of in line with that.
[00:39:19 - 00:39:30]
Philip Hussey: But we're able to think about structure from an earn out perspective with the owners saying, hey, if, you know, we can figure out how to grow incremental.
[00:39:30 - 00:40:04]
Will Smith: Value here, there's an opportunity for that value to be passed along to the family as well to, you know, align incentives there.
I see. So in fact you did value it according to kind of a traditional, a traditional multiples based valuation. And then that value of the brand that I was leaning into it, leaning into so heavily a minute ago is really just asymmetric upside.
It's, that's kind of coming along for, for free, if you will.
[00:40:04 - 00:40:04]
Philip Hussey: Yeah.
[00:40:04 - 00:40:07]
Will Smith: Correct.
Yeah. Okay, well that, that's pretty exciting.
[00:40:07 - 00:40:09]
Philip Hussey: I'd say come along with hard work.
[00:40:09 - 00:40:09]
Will Smith: So.
[00:40:12 - 00:40:14]
Philip Hussey: It'S that easy free what you do.
[00:40:14 - 00:40:34]
Will Smith: Is it easy? Yeah. Okay, but, but you are in fact value, you bought the business on a multiple of EBITDA and in the way that some no name furniture manufacturer might have been acquired at. But in fact in this case, what also comes along for the ride is this incredible brand.
Correct.
[00:40:34 - 00:40:36]
Philip Hussey: And an amazing team like you cannot.
[00:40:36 - 00:40:38]
Will Smith: Buy and you cannot teach this quality.
[00:40:38 - 00:40:41]
Philip Hussey: It is something like special about the.
[00:40:41 - 00:40:51]
Will Smith: People here who've been doing it.
I think our average tenure is like 15 years and a third of the workforce has been here over 25 years.
It's oh wow.
Simply remarkable.
Wow.
[00:40:51 - 00:40:53]
Philip Hussey: And so I view my job is.
[00:40:53 - 00:41:53]
Will Smith: Not to mess that up.
Yeah. So as we have heard, Thos. Moser is a storied brand, a very well known brand in Maine and probably regionally.
And so one thing you'd said to.
Me offline is how there's maybe a little bit more of pressure on you because you're not, not just, you know, carrying forward a business, but carrying forward a business that has a brand that means something to people beyond just inside the business versus, you know, so many of the businesses that searchers buy where, you know, there isn't a big brand there, there might be, you know, a small local brand or a lot of, you know, five star Google reviews.
There's, there's kind of brand equity, but not a brand like there is in this case. And so that, you know, probably brings.
A little bit more scrutiny to you.
Like you're, you're, people are watching. Is that, do you feel like that's an additional level of, you know, pressure on your shoulders?
[00:41:54 - 00:42:24]
Philip Hussey: I don't know if it's pressure, but it's definitely something that I've had to get used to. There's been a handful of requests, whether it's from local or regional publications, alumni magazines, through groups like that, that want to connect, want to talk, want to come and do visits and photo shoots. And I'd say generally I haven't had a sort of public, public role. And I think you add to the fact that the name of the company.
[00:42:24 - 00:42:29]
Will Smith: Is the founder's name, Thomas Moser.
I am decidedly not Thomas Moser. Right.
[00:42:29 - 00:42:30]
Philip Hussey: My name is Philip.
[00:42:31 - 00:42:33]
Will Smith: I'm not a furniture designer.
[00:42:33 - 00:42:45]
Philip Hussey: And so I've had to do a lot of thinking about how I can steward and champion this company and this brand without having it be as personal.
[00:42:46 - 00:42:47]
Will Smith: To me as it was to Tom.
[00:42:47 - 00:42:48]
Philip Hussey: Or how what do I need to.
[00:42:48 - 00:42:52]
Will Smith: Do to make it as personal to me, even in my own way?
[00:42:52 - 00:43:03]
Philip Hussey: And I'd say that's something that I'm still working out. But.
And I'll credit one of one of Chenmark's founders with this saying that when you step in to run a business, you should do it in a way.
[00:43:03 - 00:43:10]
Will Smith: That'S authentic to yourself and not try to be somebody else. Because when you try to be somebody else, you'll fail.
[00:43:11 - 00:43:16]
Philip Hussey: And so as I talk about what I love about this business, it's the.
[00:43:16 - 00:43:21]
Will Smith: Craftsman and the customers and the fact that we're doing something incredibly special in Maine.
[00:43:21 - 00:43:26]
Philip Hussey: And so I'm leaning into that and we'll see how the next decade and beyond go.
[00:43:26 - 00:44:14]
Will Smith: So we see this dynamic in trades businesses and plumbing businesses, let's say, where searcher buys a business and doesn't know, frankly the first thing about plumbing, and there's of course a craft there, but yours is, you know, that times 10. This is the whole business is craftsmanship. It's craftsmanship forward. We could say so and, and so in the plumbing example, you know, there's, there's the awkwardness of needing to demonstrate one's value as a searcher who bought a plumbing business when you don't know the first thing about plumbing.
I imagine that's more acute here. How has, how have the craftspeople taken to being acquired by somebody or being run by somebody who is not a craftsperson? Does it seem. Are you going through the same sort of credibility gap that so many searchers do, but worse?
[00:44:14 - 00:44:16]
Philip Hussey: I wouldn't say with the craftsman.
[00:44:16 - 00:44:19]
Will Smith: They're incredibly gracious, incredibly generous.
[00:44:19 - 00:44:23]
Philip Hussey: Tom's big statement was, I'm not Thomas Moser.
[00:44:23 - 00:44:25]
Will Smith: You all are talking to the craftsman.
[00:44:26 - 00:44:29]
Philip Hussey: And Tom, even after he left teaching.
[00:44:29 - 00:44:36]
Will Smith: He forever was a teacher.
And that's what he's instilled in all the craftsmen, is that you are now the teachers and the stewards of the brand.
[00:44:37 - 00:44:39]
Philip Hussey: And I view my job as just.
[00:44:39 - 00:44:43]
Will Smith: To champion them who are championing Tom's ways.
[00:44:43 - 00:44:47]
Philip Hussey: And so there's not a holier than thou approach.
[00:44:48 - 00:44:57]
Will Smith: Any number of them, any one of them on the floor will say, hey, let me show you how I do this.
And, and they know, they've been doing it for 10, 15, 20, 30 plus years.
[00:44:57 - 00:45:01]
Philip Hussey: And don't expect that I'm a fantastic craftsman.
[00:45:03 - 00:45:41]
Will Smith: And that's what makes a team. A team is everybody brings sort of different talents to, to the ball game.
Yeah, yeah, well, and actually, but maybe the fact that because there's so much craftsmanship in this brand and what is being produced, sold by this company, it's actually, it actually takes a little bit off of you because there's no possible expectation that you could, that you could, you know, do something like what they do.
So, so maybe it actually relieves you of, of any obligation to like, really, you know, know the technical, know the technical art of what they're doing.
[00:45:42 - 00:45:52]
Philip Hussey: I, I think that's exactly right. And I'm, I'm learning. I'm halfway through building a chair that I started eight months ago with one of our craftsmen. And I'm also incredibly candid with our.
[00:45:52 - 00:45:55]
Will Smith: Customers when they ask if I'm working a showroom or on the phone.
[00:45:55 - 00:45:58]
Philip Hussey: How long have you been there? I'll say, I've been here 11 months.
[00:45:59 - 00:46:04]
Will Smith: And here's what I'm interested in about the business. I'm interested in the Craftsman experience and the customer experience.
[00:46:05 - 00:46:09]
Philip Hussey: And here's where I'm spending my time. And they're lucky that I'm not making.
[00:46:09 - 00:46:18]
Will Smith: The furniture because that's what makes it so great. And that's the piece that I've gotten comfortable with saying I don't know.
[00:46:18 - 00:46:20]
Philip Hussey: And we have people who do.
[00:46:21 - 00:47:45]
Will Smith: The team at Pioneer Capital Advisory has started offering peripassu debt for SBA business buyers. That means they can help unlock up to $3 million of conventional debt on top of the $5 million limit of SBA 7 loans. So Pioneer can structure larger, more complex acquisitions. Listen to our story with Anika John from one of their clients who did just that, buying a $10 million business as a first time self funded searcher. The Pioneer team has closed more than 100 SBA loans, averaging timelines well below industry standards.
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Not just a single point of contact.
Visit pioneercap.com or click the link in the notes.
Yeah, and so going back to the structure then this was you, you mentioned earnout. So was there, was there. How much structure can we talk about here? It was this like you know, at that size of, you know, 5% margins on 20% revenue. 20 million in revenue.
That's almost like SBA. Is that what you guys did?
[00:47:46 - 00:47:53]
Philip Hussey: We, we didn't, we didn't do that. I mean there was a sort of cash component at close and then traditional.
[00:47:53 - 00:47:57]
Will Smith: Debt, seller debt, seller debt and traditional debt.
[00:47:57 - 00:48:07]
Philip Hussey: So not, I mean it's probably not worth getting into sort of the, the details of the, of, of those, those two. But not too different than a traditional.
[00:48:07 - 00:48:20]
Will Smith: Deal plus and earn out.
Okay, great, Philli. So what is the plan then for Thomas Moer?
We've been kind of speaking around it but, but make it concrete for us what the what the vision is here other than not screwing it up.
[00:48:20 - 00:48:34]
Philip Hussey: Yeah. So I'm a big fan of the Flywheel. So the how. What is the Moer Flywheel?
I spent sort of meaningful amount of time thinking about and so maybe walk.
[00:48:34 - 00:48:36]
Will Smith: You through that to provide a little.
[00:48:36 - 00:48:44]
Philip Hussey: Bit of a framework on thinking about it. And so if there's one thing we do really well, that's make world class.
[00:48:44 - 00:48:52]
Will Smith: Products and they're amazing.
They truly are world class. We presidents have sat in them, Popes have sat in them.
[00:48:53 - 00:48:56]
Philip Hussey: Steve Jobs has our or had our desk.
[00:48:56 - 00:48:57]
Will Smith: If you open up the wall Walter.
[00:48:57 - 00:48:59]
Philip Hussey: Isaacson book, the inside cover is Steve.
[00:48:59 - 00:49:04]
Will Smith: Jobs sitting at a desk in an empty room. That is a mosure desk. Wow.
[00:49:04 - 00:49:05]
Philip Hussey: It's amazing.
[00:49:05 - 00:49:13]
Will Smith: Yeah.
We've had incredibly iconic people sit and use and live with our furniture.
[00:49:14 - 00:49:16]
Philip Hussey: And so I am just so certain.
[00:49:16 - 00:49:19]
Will Smith: Of how world class our product is.
[00:49:19 - 00:49:22]
Philip Hussey: And so what should you be able to do with that is you should.
[00:49:22 - 00:49:25]
Will Smith: Be able to command premium pricing and high margins.
[00:49:26 - 00:49:33]
Philip Hussey: We've since 2008, the company has leaned on discounts to drive volume.
[00:49:33 - 00:49:35]
Will Smith: If you think design within reach, Herman.
[00:49:35 - 00:49:40]
Philip Hussey: Miller, Blue Dot, any of these more traditional brands, they also do that.
[00:49:40 - 00:49:42]
Will Smith: We don't want to compete in that space.
[00:49:42 - 00:49:42]
Philip Hussey: Right.
[00:49:42 - 00:49:51]
Will Smith: We have been giving away margin dollars on discounts in a, in a meaningful way that I actually think is brand.
[00:49:51 - 00:49:54]
Philip Hussey: Like dilutive to the brand and hurts.
[00:49:54 - 00:49:56]
Will Smith: Where we can reinvest in the business.
[00:49:57 - 00:49:59]
Philip Hussey: So if we're confident we continue to.
[00:49:59 - 00:50:04]
Will Smith: Sort of make sure we're producing world class products, I. E. Don't mess it up.
Right. Do whatever we can to retain these.
[00:50:04 - 00:50:07]
Philip Hussey: Craftsmen that should be able to command.
[00:50:07 - 00:50:10]
Will Smith: Premium, sort of premium margins and high prices.
[00:50:10 - 00:50:12]
Philip Hussey: And with that, can we use that.
[00:50:12 - 00:50:26]
Will Smith: To go back and improve the craftsman's experience? Right. So essentially how can we keep and improve the lives of our, our craftsmen here on the floor to make sure we have the world class talent who can deliver that world class product?
[00:50:27 - 00:50:29]
Philip Hussey: I think the other caveat I'll add.
[00:50:29 - 00:50:36]
Will Smith: So that's your, that's your flywheel is product, higher margin, world class talent.
Keep going, going and going is we're.
[00:50:36 - 00:50:42]
Philip Hussey: Trying, we're thinking how we can improve the experience that goes along with that.
[00:50:42 - 00:50:48]
Will Smith: Product and viewing that as a separate, a separate product really is when you.
[00:50:48 - 00:50:56]
Philip Hussey: Order your furniture today, it could take anywhere from 12 to 18 weeks depending on, you know, what you order and.
[00:50:56 - 00:51:09]
Will Smith: When you order and yada, yada yada.
But there is an experience going on with that as well. And how can we make sure we are sharing the Moser story and having a high touch luxury experience for those folks.
[00:51:10 - 00:51:11]
Philip Hussey: So not only do they talk about.
[00:51:11 - 00:51:20]
Will Smith: How amazing the furniture is, but how amazing the build process was, how amazing the delivery process was, how amazing the.
[00:51:20 - 00:51:21]
Philip Hussey: Follow up story was.
[00:51:21 - 00:51:31]
Will Smith: By the way, did you know you can go for a tour, you can meet your craftsman. All of these pieces have an opportunity to enhance what world class looks like.
[00:51:32 - 00:51:39]
Philip Hussey: So that's our process and sort of vision. I think the challenge is many of Our, I'll call them backend processes are.
[00:51:39 - 00:51:45]
Will Smith: As handmade as our furniture.
And so something tells me you've said that line before.
I have.
[00:51:46 - 00:52:00]
Philip Hussey: And so what that requires is unpacking that in a way to say, how can we make this easier so we can handle, eventually handle more volume, be more efficient in the back office, provide.
[00:52:00 - 00:52:13]
Will Smith: A better customer experience and a better workplace experience. Right.
If people are doing less sort of manually entry, manual entry, keying in data, manually processing receipts, those type of activities.
[00:52:13 - 00:52:18]
Philip Hussey: To unleash all of that talent purely.
[00:52:18 - 00:52:20]
Will Smith: On the customer or purely on the craftsman.
[00:52:20 - 00:52:22]
Philip Hussey: And if we can do that, that.
[00:52:22 - 00:52:33]
Will Smith: Flywheel is going to start spinning pretty, pretty quickly.
Can you say more about that? This was. This goes to that just introducing efficiencies right. Into. Into the operations, essentially, correct?
Yeah.
[00:52:33 - 00:52:35]
Philip Hussey: And I think it's the, it's how.
[00:52:35 - 00:52:37]
Will Smith: You deploy that excess capacity.
[00:52:38 - 00:52:42]
Philip Hussey: So pretend you have customer service manually.
[00:52:42 - 00:52:51]
Will Smith: Calling people to collect a final payment.
So, hey, your furniture is about to be done. I'm going to call you and take.
[00:52:51 - 00:52:54]
Philip Hussey: Because we, we're made to order. So when you call, when you order.
[00:52:54 - 00:52:58]
Will Smith: A piece of furniture, we're literally going to build it for you.
Right.
[00:52:58 - 00:52:59]
Philip Hussey: We're not. We don't inventory stuff.
[00:52:59 - 00:53:01]
Will Smith: There's a handful of products we inventory.
[00:53:01 - 00:53:03]
Philip Hussey: But will when you call after this.
[00:53:03 - 00:53:10]
Will Smith: To order the bed, because I know you're going to. We're going to have a guy in the rough mill go pick the boards for your bed. Right.
[00:53:11 - 00:53:14]
Philip Hussey: And we collect 50% up front, 50%.
[00:53:14 - 00:53:15]
Will Smith: On the back end.
[00:53:15 - 00:53:20]
Philip Hussey: So if customer service is spending all of their day collecting final payments, guess.
[00:53:20 - 00:53:25]
Will Smith: What they're not doing? Providing wow moments for customers in other areas.
[00:53:25 - 00:53:29]
Philip Hussey: So imagine you automate final payment collection, right?
[00:53:29 - 00:53:31]
Will Smith: Emails, auto charge, whatever.
[00:53:33 - 00:53:34]
Philip Hussey: Now you have somebody who can spend.
[00:53:35 - 00:53:38]
Will Smith: Half of their day calling customers to wow them, right.
[00:53:38 - 00:53:43]
Philip Hussey: What if you knew when somebody's birthday was? What if you wanted to.
[00:53:44 - 00:54:02]
Will Smith: The woman who runs our front office sends maple syrup to folks when we have an issue.
Main maple syrup when there's some type of issue. What if you could do that proactively? So now when you had an issue, but just thanks for your order, your bed's being made. We're going to ship you some maple syrup while you wait. Merry Christmas from Maine.
[00:54:02 - 00:54:05]
Philip Hussey: We're not doing that yet, but those are the type of activities that we.
[00:54:05 - 00:54:06]
Will Smith: Want to unleash our team on.
[00:54:06 - 00:54:09]
Philip Hussey: Because then you, while you're waiting for.
[00:54:09 - 00:54:11]
Will Smith: Your bed and you're going to get a package of something or a letter.
[00:54:11 - 00:54:15]
Philip Hussey: Or whatever, you're going to Tell your friends, holy cow.
[00:54:15 - 00:54:22]
Will Smith: I ordered a bed and while it was being built, I got a product or I got a note or I got a letter from this company in.
[00:54:22 - 00:54:25]
Philip Hussey: Maine with, with homemade maple syrup saying.
[00:54:25 - 00:54:31]
Will Smith: Thanks for your patience while we build your bed. You're going to tell everybody about that because Design Within Reach is not sending you maple syrup.
[00:54:33 - 00:54:35]
Philip Hussey: But in order to free up that.
[00:54:35 - 00:54:52]
Will Smith: Capacity, we need to make our back office more efficient. So that, that's what we're working on. Great.
Fascinating.
And what size business do you think.
You can get this to like, if it's at 20 million today, could this be a hundred million?
[00:54:52 - 00:54:54]
Philip Hussey: I see no reason why that can't.
[00:54:54 - 00:56:43]
Will Smith: Be a, a target given the, the strength of the brand. The markets we are not in, as you think about luxury markets. We don't have a New York showroom right now.
We don't have a Dallas showroom, we don't have an LA showroom. And, and, and, and at various points in this company's history, we've had showrooms in those places. Not in Dallas, but in, certainly in New York, in Chicago and la. And so the more you can be in the places where luxury consumers are, the more brand recognition you get and the faster you can grow. And then your constraint becomes talent and craftsman, because it takes a couple of years to get reasonably good, not let alone great at building furniture.
So, and what, and what is the retail strategy? Or maybe, or maybe how much sales flows through retail versus online? I mean, imagine. I imagine you do in some ways. There's a lot of deep.
Is this at all a D2C business? It's so premium, maybe not very much.
A D2C business, but I'd say it's more like selling a Volvo than selling a mattress. Right. So we do do some online business.
It's probably less than a third most folks. If you're going to spend $10,000 on a dining room table, you want to come in and look at it, you want to touch it. It's a sensory experience.
And so being there, seeing it, talking to somebody, ma matters.
And so a lot of the sales then are into these four markets, into Maine, D.C. boston and San Francisco. Because that's where your retail footprint currently is.
[00:56:43 - 00:56:45]
Philip Hussey: Yes, I mean, we're certainly the strongest.
[00:56:45 - 00:56:54]
Will Smith: In the Northeast and up and down the, the Eastern seaboard, West Coast.
We have a San Francisco office or, you know, location.
[00:56:54 - 00:56:55]
Philip Hussey: We do have a, what I'll call.
[00:56:55 - 00:57:01]
Will Smith: A design center here that responds to we catalogs.
[00:57:01 - 00:57:04]
Philip Hussey: We mail out several hundred thousand catalogs a year.
[00:57:05 - 00:57:21]
Will Smith: And those are getting inbound sort of inbound sales via catalog.
And they're working with folks to help, you know, figure out what they want and process the order in a way that is probably most folks aren't used to.
[00:57:21 - 00:57:22]
Philip Hussey: In a call center capacity.
[00:57:22 - 00:57:23]
Will Smith: Our team may spend an hour or.
[00:57:23 - 00:57:26]
Philip Hussey: Two with, with the team with somebody.
[00:57:26 - 00:58:19]
Will Smith: On the phone helping them configure room, go back and forth on email with different pictures, talk about length, talk about bed height.
And so it's, it's split out between all of that, but far less than you'd expect is just direct purchase online.
Mm.
And so in a world where so much furniture is been offshored, furniture manufacturing has been offshored. I guess North Carolina, like, you know, used to be a big furniture making place, and I guess it still is with respect to the US but it's a shadow of its former self. The simple answer to that is that as a, you position yourself as super, super premium, so you're just not targeting a mass consumer audience anyway. As simple as that. It's kind of the answer.
[00:58:19 - 00:58:21]
Philip Hussey: Yeah, we're not trying to.
[00:58:22 - 00:58:23]
Will Smith: This isn't a volume game.
[00:58:23 - 00:58:25]
Philip Hussey: If you're doing, I'd say craft at.
[00:58:25 - 00:58:31]
Will Smith: Scale because it is handcrafted furniture. But we are doing it with more than one person.
[00:58:31 - 00:58:31]
Philip Hussey: Right.
[00:58:31 - 00:58:34]
Will Smith: This is not right. A guy down the street in, in his barn.
[00:58:34 - 00:58:37]
Philip Hussey: Like there's people ask who we compete against.
[00:58:38 - 00:58:48]
Will Smith: I'd say generally we're competing against more likely custom furniture makers in your hometown.
Right. Who are going to go build that table just for you. But we were doing that with, you know, 60 plus people.
[00:58:49 - 00:58:54]
Philip Hussey: And so the model is not to say, hey, how can we go sell.
[00:58:54 - 00:59:04]
Will Smith: This design and have somebody in China make it?
Because you lose that sort of personal, you know, approach of knowing your customer and signing the bottom of the table.
[00:59:05 - 00:59:07]
Philip Hussey: In, in so much that we do.
[00:59:09 - 00:59:27]
Will Smith: We do a customer residence program so customers can come here and build the table with us and spend a weekend in Maine or a week in Maine experiencing the process. And it's as experiential as, as it is, you know, just, just a table or just a chair.
And how many people take you up on that?
[00:59:27 - 00:59:29]
Philip Hussey: So it was paused during COVID We're.
[00:59:29 - 00:59:48]
Will Smith: About to restart it this coming spring. We always sell out.
So I hear you say that there, you really don't have competitors, so there just aren't other furniture brands that are essentially making custom pieces at scale. You're.
You're really sitting up there by yourself.
[00:59:49 - 00:59:51]
Philip Hussey: Yeah, there's, there's a handful, but it's.
[00:59:53 - 00:59:56]
Will Smith: We are truly unique in that, that perspective.
[00:59:57 - 01:00:03]
Philip Hussey: There's certainly other expensive furniture out there and there are custom shops out there.
[01:00:03 - 01:00:06]
Will Smith: We're somewhere in between because it's.
[01:00:06 - 01:00:08]
Philip Hussey: We do have known sort of known solutions.
[01:00:08 - 01:00:10]
Will Smith: Right. You can go on and you pick.
[01:00:10 - 01:00:11]
Philip Hussey: You pick what piece you're going to.
[01:00:11 - 01:01:04]
Will Smith: Order and you can order that piece.
But we are building it for you and we're doing it for you and a lot of other folks too.
Great. Philip, let's turn our attention back to the relationship with Chenmark. You had said how Chenmark's model is one of high decentralization. All the businesses kind of stand on their own two feet and succeed because of the internal operations and value proposition of those businesses themselves.
You had said something to me though about there were financial benefits to being part of the Chenmark family for Thomas Moer. Right. Working capital benefits, which of course, as everybody listening knows is just a, a very delicate feature of small business and particularly in manufacturing. So what benefit did you get there?
[01:01:05 - 01:01:11]
Philip Hussey: So sort of the, I guess financial benefits of being in Chenmark writ large.
[01:01:11 - 01:01:12]
Will Smith: Is that.
[01:01:13 - 01:01:18]
Philip Hussey: One we're interested in what we need to do to make this business great in a decade.
[01:01:18 - 01:01:19]
Will Smith: Right.
[01:01:19 - 01:01:21]
Philip Hussey: Unless what do you need to do.
[01:01:21 - 01:01:27]
Will Smith: To make it good next year?
Right. But we want to be great forever because that's how long we plan to own it.
[01:01:28 - 01:01:30]
Philip Hussey: So there's a tolerance for, you know.
[01:01:30 - 01:01:33]
Will Smith: Investments that may have a little longer time horizon.
[01:01:33 - 01:01:37]
Philip Hussey: So, so that's one, one component of.
[01:01:37 - 01:01:43]
Will Smith: Just access to reinvestment capital is I've never done it in a regular business.
[01:01:44 - 01:01:45]
Philip Hussey: Or sort of outside of the Chenmark.
[01:01:45 - 01:01:55]
Will Smith: World, but I imagine more more readily available because interests are aligned in building something for the long term.
[01:01:55 - 01:01:57]
Philip Hussey: I think the other piece, and this.
[01:01:57 - 01:02:02]
Will Smith: Is probably more just an outcome of all of us in the Chenmark world.
[01:02:02 - 01:02:09]
Philip Hussey: Learning from each other. But we end up sharing stories or outcomes from focusing on working capital and.
[01:02:09 - 01:02:16]
Will Smith: The impact that can have on a business when you can find ways to be more efficient and as you know.
[01:02:16 - 01:02:22]
Philip Hussey: Peer will do it in another company. I'm like, oh, that's interesting.
How can I drive on that in our own business?
[01:02:22 - 01:02:37]
Will Smith: And you can find ways to fund, you know, we can find ways to fund some of our own growth or our own investments just by pulling out working capital to free up, free up cash to put in other places. And I give you an example if that's, that's helpful, please.
[01:02:37 - 01:02:41]
Philip Hussey: There sort of two examples actually found.
[01:02:41 - 01:02:42]
Will Smith: Out that we were sitting on probably.
[01:02:42 - 01:02:44]
Philip Hussey: More lumber than we needed.
[01:02:45 - 01:02:51]
Will Smith: Sort of how we ordering lumber is we had too much of it. And so the opportunity is, hey, can.
[01:02:51 - 01:02:55]
Philip Hussey: You do the same with sitting on less lumber inventory?
[01:02:55 - 01:02:57]
Will Smith: You can you resort it, can you.
[01:02:57 - 01:03:05]
Philip Hussey: Get, send some of it back? Yes. And talking several hundred thousand dollars worth of excess lumber that great, you can pull that out.
[01:03:05 - 01:03:15]
Will Smith: Where can you reinvest that in the sales process, in the tech process, in sort of a number of other areas to drive some of those efficiencies that we talked about earlier.
[01:03:15 - 01:03:16]
Philip Hussey: That's one.
[01:03:17 - 01:03:19]
Will Smith: Let's, I guess let's also use the.
[01:03:19 - 01:03:40]
Philip Hussey: Example of final payments. Hey, what if you could collect those faster and sooner to pull final payments a month forward? So now we automatically send final payments a month before your furniture is going to be ready. So you get all that cash sooner.
But it also has the benefit of as soon as that piece comes off.
[01:03:40 - 01:03:50]
Will Smith: The line, we can get it on a truck and sent to the customer so they're not also waiting for their furniture because of back and forth calls for payments.
[01:03:50 - 01:03:51]
Philip Hussey: So those are just two examples of.
[01:03:51 - 01:03:58]
Will Smith: How you can look at where, where there's cash tied up in the business and figure out how to pull it.
[01:03:58 - 01:04:01]
Philip Hussey: Out and stick it somewhere else that drives more value.
[01:04:02 - 01:04:33]
Will Smith: Yeah.
Wasn't there also an example of your own ability to process cards or something? So when an order comes in, it's 50% upfront. And then of course, course you, Thomas Moer sits on that 50% because it needs to be deployed into the cost of producing the good. But that's over of the piece.
But that's over some number of weeks. But wasn't there a benefit of not needing to hold on to all of that, that 50% deposit or something like that?
Yeah.
[01:04:33 - 01:04:38]
Philip Hussey: So credit card companies, if you're taking.
[01:04:38 - 01:04:42]
Will Smith: A large chunk, they're going to want to show that, you know, it's a.
[01:04:42 - 01:04:43]
Philip Hussey: Liability on your books that you still.
[01:04:43 - 01:05:05]
Will Smith: Need to deliver this piece of furniture. If this was being run out of one off, you need to make sure you have sort of the cash right to deliver on that liability to make that piece of furniture. We're part of a larger ecosystem, so have the benefit of, you know, a larger balance sheet. So we can tell the bank or the credit card company, the processor in this case.
[01:05:05 - 01:05:07]
Philip Hussey: Yes, we like we will be able.
[01:05:07 - 01:05:14]
Will Smith: To fund building that furniture down the line and able to benefit from that, that factor.
I see.
[01:05:14 - 01:05:14]
Philip Hussey: So.
[01:05:14 - 01:05:19]
Will Smith: So credit card processors say might have been, might have rejected more purchases in the past.
[01:05:20 - 01:05:22]
Philip Hussey: Not, not rejected, but they just, you.
[01:05:22 - 01:05:23]
Will Smith: Need to prove to them that you.
[01:05:23 - 01:05:27]
Philip Hussey: Have the, the, that you're not taking.
[01:05:27 - 01:05:35]
Will Smith: Those deposits and putting them somewhere else and going to shut down and you know, somebody's going to be left holding the bag that these shirts are like.
[01:05:35 - 01:05:38]
Philip Hussey: Hey, you left with my 50% deposit.
[01:05:38 - 01:06:07]
Will Smith: I have no furniture.
And.
And the credit card processors are need to get comfortable that somebody can fulfill on that liability to actually build the furniture. Sure.
Right.
I. I get it in concept, but how did it actually play out in terms of something got better.
Yeah.
Under Chenmark's ownership where it sounds like before credit card processors would slow down payment processing to call in with you guys and make sure that you're legit or what.
What.
What is the actual.
[01:06:07 - 01:06:11]
Philip Hussey: Essentially just forced the previous company have.
[01:06:11 - 01:07:02]
Will Smith: To sit on those. All those deposits and they couldn't put them to work somewhere because there was no balance sheet behind it guarantee that there were. That furniture was going to be able to be built.
I see, I see.
Okay. So you can. You can work with that. The cash that comes in any way you want. You have the freedom to deploy that cash anyway.
Correct.
Okay, great.
So Philip, just if you can. I know of course this is a very unique business. This all businesses are very unique. But this is your first time in a. Running a manufacturing business, although you did have the family business experience.
So you saw a manufacturing business up close.
But for anybody, any searcher out there.
Listening who might be interested in manufacturing any What's. What's been your experience kind of just as an entrepreneur running a. Running a manufacturing business really for the first time.
[01:07:03 - 01:07:11]
Philip Hussey: Yeah. And I'd pro. I. I'd love advice from your audience actually, because I feel like I'm still. Still very new in this.
[01:07:14 - 01:07:57]
Will Smith: My initial approach to specifically our production process has been not to touch it. I know how unique what we're making is and how special the skill sets are. And so I'm very. I've been very hesitant to come in and pretend like I know how to build a chair better or faster and afraid that if I put my thumb on the scale there, it will take the humanity out of what we're doing. And so we're very much not a production line.
Right. We are one person, one piece. And I've tried to reinforce and respect that. And how this business grows is not through building a chair in half the time.
[01:07:58 - 01:08:01]
Philip Hussey: That is to me, that's a race to the bottom.
[01:08:01 - 01:08:05]
Will Smith: Chasing efficiencies on the manufacturing side here.
[01:08:05 - 01:08:06]
Philip Hussey: Because of what we're doing.
[01:08:06 - 01:08:10]
Will Smith: I'd rather figure out how to honestly.
[01:08:10 - 01:08:20]
Philip Hussey: Give people more time. Right.
And make this chair furniture even better. Not sure that's Possible because it is truly world class. But that's just not a, not a.
[01:08:20 - 01:09:38]
Will Smith: Focus early on for me is on digging the manufacturer, digging in and trying to improve or change. But more just make sure I understand so as I'm engaging with customers I can speak to how it happens and sort of the magic behind the curtain.
Yeah, I have to say Philip, that that seems challenging because when I hear you say that the you what one area of improvement for the business or opportunity I should say is the user experience. And probably the most frustrating part of the user experience of buying a piece from you guys is how long it takes. Now, now in some, in some ways you might, you might argue that that's like creates scarcity, creates desire. It almost, it reinforces the whole, the whole emotional experience of, of, of this thing being created for you. At the same time it's 2025, everybody's impatient, everybody just wants it now.
So if I'm told I need to wait for 12 weeks for a piece, the thing that's really going to move the needle for me on improving that experience is I only have to wait nine weeks.
And isn't there going to be the.
Temptation that you kind of crack the whip, Hurry up guys. Obviously tongue in cheek, but something there maybe.
[01:09:38 - 01:09:44]
Philip Hussey: I think it's how else you can satiate that need or not to the.
[01:09:44 - 01:09:46]
Will Smith: Point of creating scarcity.
[01:09:48 - 01:09:52]
Philip Hussey: Give you an example. We launched a seconds program, essentially pieces.
[01:09:52 - 01:10:07]
Will Smith: That were returned or had to be repaired or didn't quite meet first quality. There's always been a seconds program.
It lived here in our freeport location, found a way to put it online so people have more easily, you know, access to that.
[01:10:07 - 01:10:13]
Philip Hussey: And hey, if you want a piece and you want it today, guess what? Here, here's what you can get today. If you want something built for you.
[01:10:14 - 01:10:16]
Will Smith: You know, you gotta wait.
[01:10:16 - 01:10:18]
Philip Hussey: And well, people say hey, can I.
[01:10:18 - 01:10:19]
Will Smith: Pay more to jump the line?
[01:10:19 - 01:10:24]
Philip Hussey: The answer is no, you gotta wait. And actually during COVID we were up.
[01:10:24 - 01:10:32]
Will Smith: Over 30 weeks of waiting and people would and wow.
And that's too long.
I think 30 weeks.
[01:10:32 - 01:10:34]
Philip Hussey: Yeah, yeah, that, that is too long.
[01:10:34 - 01:10:37]
Will Smith: There is a certain period and I'm.
[01:10:37 - 01:10:39]
Philip Hussey: Not exactly sure what that is, but.
[01:10:40 - 01:10:43]
Will Smith: To optimize your supply chain, we are high mix, low volume.
[01:10:44 - 01:10:48]
Philip Hussey: And so you can't get really within.
[01:10:48 - 01:11:03]
Will Smith: You know, two to three months, you start having to like hold, you know, hold more material probably than you need because you don't know when that order is going to come. Given our wide range of SKUs, we've.
[01:11:03 - 01:11:04]
Philip Hussey: What we have done Is we've switched.
[01:11:04 - 01:11:37]
Will Smith: Shippers to accelerate the time it actually lands in your house that we had various shippers picking up sometimes every two, three, four weeks. And so that's adding to the wait time. We have a new shipper they pick up every single week, and that's cut shipping time in half. So where else in the value chain can you provide value that accelerates when a customer gets to experience our furniture?
And what about some giant order from Harvard University?
How does that. Does that play nicely with little old me buying a $10,000 dining table?
[01:11:37 - 01:11:42]
Philip Hussey: Yeah, so it depends what they're ordering, when they're ordering, what our schedule looks like.
[01:11:42 - 01:12:02]
Will Smith: We have outsourced partners that we can pull in to help build large orders. So we have a partner in Ohio that helps build.
Build some of these large scale institutional orders if we need it. And that really just depends on the capacity of our shop and our different work centers at any given time.
[01:12:04 - 01:12:04]
Philip Hussey: We're.
[01:12:06 - 01:12:26]
Will Smith: Doing a job for New York public library. We do all the chairs in. We have a custom design that was commissioned by the New York public library, the Manhattan branch of the New York public library. And so most of the branches in New York are our chairs.
We're about to build some of those in house. We're already get a 500 chair job.
[01:12:26 - 01:12:28]
Philip Hussey: You probably wouldn't suck up all our chair capacity.
[01:12:29 - 01:12:51]
Will Smith: And we'd work. Work with a partner in Ohio to help sort of source the wood, get them, you know, get them the design, inspect the quality.
But it would be made externally.
I see. I see. I was just there weekend before last, actually, so. So your chairs are not yet in the New York public Library.
[01:12:52 - 01:12:53]
Philip Hussey: It depends which branch you are.
[01:12:53 - 01:13:04]
Will Smith: There are a number of branches. Branches that have our chairs. As they're refreshing branches, they can continue to send pos our way.
Oh, okay.
I. I assumed we were talking about the one at Bryant park with the lions.
[01:13:04 - 01:13:10]
Philip Hussey: I. I don't know off the top of my head. Okay, I'm gonna have to go check now, so. Okay.
[01:13:10 - 01:13:15]
Will Smith: All right, Philip, anything else that is key to this story that we didn't hit?
[01:13:15 - 01:13:17]
Philip Hussey: I can't say enough about our craftsman.
[01:13:17 - 01:13:19]
Will Smith: Honestly, I think that's this. If you were to ask what the.
[01:13:19 - 01:13:21]
Philip Hussey: Secret sauce is here. It's our.
[01:13:21 - 01:13:35]
Will Smith: Our team building the furniture. As soon as a piece of furniture gets out into the world, it has to last because that's what your brand rests on. And the team here makes sure it's perfect every time.
[01:13:36 - 01:13:37]
Philip Hussey: So the rest is all just moving.
[01:13:37 - 01:14:06]
Will Smith: Chess pieces around on the board, right?
That's really the secret sauce.
Well, on that, Philip, thank you for mentioning that. You're based in Maine and, you know, not a state with a big population, so I imagine finding new craftspeople. You've also already mentioned that it takes some number of years for somebody to train up and be capable to produce a Thos. Moser piece. How are you thinking about increasing capacity with people?
[01:14:06 - 01:14:09]
Philip Hussey: Yeah, we, we launched a training room.
[01:14:09 - 01:14:12]
Will Smith: It actually was Tom Moser's workshop here.
[01:14:13 - 01:14:19]
Philip Hussey: And when he passed, we set up a training center and actually our shipping. He was our director of shipping.
[01:14:19 - 01:14:22]
Will Smith: He'd worked here for 40 years.
He'd done a number of roles.
[01:14:23 - 01:14:25]
Philip Hussey: He'd built custom furniture.
[01:14:25 - 01:15:03]
Will Smith: He'd build various stuff in the work centers. His name is Dan. We asked him if he'd lead the training center.
And so now he is training the next generation of Thomas Moen Mosher cabinet makers. And the idea is that we can bring people in, teach them traditional joinery, and then continue to add tools to their toolkit, if you will, skills to their skill set to be able to build beds and case pieces and tables and continue up, you know, continue up and across our entire product catalog.
And is the pool of people who might be a good fit for this in Maine large enough?
[01:15:03 - 01:15:07]
Philip Hussey: We have yet to recruit from a wider field yet. We occasionally we've had folks come from.
[01:15:07 - 01:15:10]
Will Smith: Varys woodworking schools in Massachusetts or Vermont.
[01:15:10 - 01:15:15]
Philip Hussey: But generally I'm bullish about the, the.
[01:15:15 - 01:15:51]
Will Smith: Talent pool in central Maine here.
Great. Phillip.
Well, what a neat business. I love, actually, I love furniture. I don't claim to be a, a, an expert on it or, you know, know much about it, but I, I, I appreciate a beautiful piece at least, and I love a business with a really strong brand and a legacy business. So there's so much about, and of course, I so admire what Chenmark is building broadly. So there's just so much to be excited about here.
It's a really neat acquisition. And was it fair to say that this is kind of an unusual one for Chenmark?
I said that earlier.
[01:15:53 - 01:16:05]
Philip Hussey: I think you could, you could say that from a industry perspective. But if you actually look at what Chenmark looks for is brands and companies.
[01:16:06 - 01:16:08]
Will Smith: And goods and products and services that.
[01:16:08 - 01:16:23]
Philip Hussey: Are going to be around for several more decades. I actually think it fits incredibly well within our, in our story because this is a brand that's only proved to grow. And if I was a betting man, I'd say people are going to continue.
[01:16:23 - 01:16:26]
Will Smith: To want furniture in 25, 30, 50 years.
[01:16:27 - 01:16:28]
Philip Hussey: So from that sense, no, not at all.
[01:16:28 - 01:16:32]
Will Smith: Great.
Good note to end on. Philip Hussey, thank you very much for joining us.
[01:16:32 - 01:16:32]
Philip Hussey: Thank you Will.
[01:16:33 - 01:17:17]
Will Smith: Hope you enjoyed that interview.
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