In 1970, 28-year-old David Green, who worked full-time at a retail store, noticed that women who came in looking for picture frames often couldn’t find what they were looking for. Armed with a $600 loan and a bit of rented garage space, Green and a partner started making their own frames. Forty years later, Hobby Lobby – which now sells everything from arts and crafts to fabrics and, of course, those legendary picture frames – has over 450 stores in 39 states, carries no long-term debt, and saw same-store sales rise six percent in 2009 (yes, the same year retail industry sales declined by 2.7%). Clearly, these folks in Oklahoma are doing something right.
To kick off an NRF blog series featuring retail executives during the holiday season, we reached out to Hobby Lobby founder and CEO David Green to talk about holiday trends, why the company remains closed on Sundays, and what he’d do if he had to start all over again.
An NRF survey conducted last holiday season found that one in six consumers planned to make more gifts as a result of the economy. As an arts-and-crafts retailer, did you see that trend play out among shoppers, and do you expect that trend to continue?
That trend will certainly continue. Because of layoffs across the country, people may have more time on their hands so they are using that time to make crafts and turn them into gifts for the holiday season. During weak economies the crafting industry usually does well. In addition to people making their own gifts, there is a group of people who will also sell their crafts and projects to supplement their income.
In spite of the economy, Hobby Lobby surpassed $2 billion in sales for the first time last year, and saw same-store sales rise 6% year over year in 2009. The company also has no long-term debt. To what do you attribute this success?
We try to honor the Lord in all we do. I think he has brought us the best employees and I would contribute a lot of our success to our great people. We’ve also learned from our mistakes, we listen to what products our customers want, and we strive for growth without rushing into expansion.
Your company has made news by instituting a starting wage of a least $11 an hour for full-time employees and $8 an hour for part-time employees. What was the rationale behind this decision, and what has been the employee response?
We are a very successful company and we feel like we should share that success. It is just the right thing to do. It’s also good business. We have loyal employees because we try our best to be loyal to them.
Hobby Lobby is very much a family-run business: one son serves as company president, your daughter is VP of the art and creative department, and another son heads up Mardel, a Christian bookstore and Hobby Lobby affiliate. What advice can you offer other business owners on how to successfully work so closely with family members?
When you are dealing with your family, I think the main thing you should do is not decide where you want to place them. Put them where their strengths are even if it is totally different than what you had in mind for them as they grew up. I think each one of my children – and now grandchildren – work in positions that highlight their strengths and passions. We are hoping that their places in the company will continue to reflect their passions and the gifts that God gave them.
Of course, not all of Hobby Lobby’s 18,000 employees are family! So, what do you look for when hiring new talent at your headquarters?
What we are looking for most are employees who have integrity. If they have integrity, we can teach them what they need to learn in most positions. We want to have employees who have a sense to serve and not to be served. Hopefully, that attitude stretches from the very top to our newest employee. We should serve our employees just as much as we serve our customers.
Hobby Lobby is one of the only national retailers that remains closed on Sundays. Talk about your philosophy behind this decision.
It has really been a key to our success. Closing on Sundays and giving our employees time to worship or be with their families has been a real positive for us. It really allows us to recruit the very best people.
Which area of retail do you enjoy the most?
Without question – merchandising. I always tell people that I am the vice president of merchandising. I spend most of my time with the merchants. We would like to be the greatest merchants ever. I think our buyers do a phenomenal job and we put together a tremendous selection of product. We have about 100,000 items going to our stores within a 12-month period.
Your company is celebrating its 40th anniversary this year. What accomplishment makes you most proud?
Probably the thing I am most proud of is our minimum wage policy. Before we increased the full-time hourly wage to $11 an hour this year, we instituted a $10-an-hour policy in 2009. I think that gave me more joy than anything that I have ever done. The employees received it well. It’s not good to make people cry, but we made a lot of people cry with joy when they received their raises.
As an Oklahoma native who chose to keep the company’s headquarters there, give me your best sales pitch for visiting The Sooner State.
Oklahoma has four beautiful seasons and one of the strongest economies in the nation. It is a great state and we are just proud to be here.
Complete this sentence, “If I had to do it all over again, I would…”
I would not grow as fast during the beginning. In our initial years, we experienced some difficult times because we grew too rapidly. Because of the impact the 80s oil bust had on Oklahoma’s economy at that time, our positioning really hurt us. We learned a lot from that period and we are positioned much better now. For example, we carry no debt. But back when we first started, we had expanded too quickly and had a debt load. If we had just expanded a little slower and minimized our debt, we would have done a lot better during our infancy stage.