Dennis Scully: From our headquarters in New York City, this is Business of Home. I'm your host, Dennis Scully. Every week, I'll be talking to leaders and innovators from all corners of the home industry. I hope you'll join me.
Kaitlin P.: Hi, I'm Kaitlin Petersen, editor-in-chief of Business of Home. Our newest print issue is available now and offers the design industry a roadmap to the future of retail. Find out how brands like Ballard, One Kings Lane and the Shade Store are innovating to stay ahead, what it takes to design a successful storefront, and what RH's chairman, Gary Friedman has to say about the road to retail success. Subscribe today at businessofhome.com/subscribe to access the entire issue online. That's businessofhome.com/subscribe. And now, on with the show.
Dennis Scully: Since founding Pine Cone Hill in 1994, Annie Selke has abided by the credo of do the right thing and the money will follow. Her empire has since expanded to include rug manufacturer Dash and Albert, some 200 employees and more than 3,000 wholesale partners worldwide, yet the people first policy hasn't changed. I sat down with Annie shortly after her sales team retreat to learn more about her company's culture, from its creative rewards program for wholesalers, to the $20,000 bonus offered to long-time employees, as well as the strategic moves and partnerships that have been instrumental to the company's growth.
Dennis Scully: So you went to the University of Vermont.
Annie Selke: Groovy UV.
Dennis Scully: Right, okay. Had a fantastic time, no doubt.
Annie Selke: Had a fantastic time.
Dennis Scully: Pretty fun school.
Annie Selke: Pretty fun school. I learned how to hold my liquor. Important skill that comes in handy often. And I spent my junior year at FIT in New York. But I majored in textile science and I took a lot of art history, I took history of costume. It all, when you look back, it makes perfect sense because I was addicted to textiles from when I was little. Like just scraps of things. My mother said "You're such a pack rat."
Dennis Scully: So you were just grabbing all of these things and holding onto them.
Annie Selke: Like pretty thing. Like oh there's that. I like that. I don't know why, but I would just very inquisitive that way for a pattern and color. And then I would play store. I look back. I'm like "Annie, what were you doing?" So I'd go to my mother's closet, usually take an Hermes scarf and a few other things, come back to my room, merchandise them. So I was the merchant and the salesperson and the buyer. So I played every role.
Dennis Scully: Fantastic.
Annie Selke: And I loved doing the box with the tissue. You know, you would fold the tissue a little bit in half to do it properly.
Dennis Scully: Sure.
Annie Selke: That whole thing. So I would go through this-
Dennis Scully: So you knew all of this from a young age?
Annie Selke: I did because, again, you don't know it, what your superpowers are until you look back and you're like okay, not everybody is this way. So I'm very observant, very visual. And so oh, that's how they do it at Saks. I think I'll do it myself that way, as an eight year old. Let me prepare this for you with a ribbon. Yeah, no, it's pretty funny.
Dennis Scully: So and then funny enough, you actually go through the Saks training program.
Annie Selke: Training program. Exactly.
Dennis Scully: Right?
Annie Selke: Yeah.
Dennis Scully: Which was a fantastic program.
Annie Selke: Amazing. Amazing. And learning not what you think you're going to learn, but the experiences you have were kind of mind-blowing. I don't know if I told-
Dennis Scully: So what did you end up learning at Saks that you didn't realize you were going to learn?
Annie Selke: There are a couple of things, but we ... One is that you don't go to school in Saks the building. It's in the Meatpacking District. That was a little bit of a disappointment. But then they put you in the store for a month. So the thing that Saks did teach me is they have this whole dedication to quality and service. They also know who their best customer was. She died while we were in the training program. So remember those green sprocket feed reports that were like this big?
Dennis Scully: Yeah.
Annie Selke: So they knew who their single best customer was and she died while I was in the program and I'm sure that's a big "Oh shit. She died. Oh my God. What do we do?" Because she was a really good customer. So they tracked their customers very well, both from a service and financial standpoint.
Dennis Scully: So later you got to work with the [Conrans 00:04:28] operation.
Annie Selke: I did.
Dennis Scully: Which I've always been impressed with.
Annie Selke: I did. I left Saks and took a job as the PR Assistant with this lovely woman named Pat Grable. She was great. So I learned A, the importance of PR, how to work with the different editors. You know, the New York Times is in there constantly. Cosmopolitan, every magazine. And she was tremendously, just a lovely, lovely person and I learned a lot. And then I got promoted to be a copywriter at Conrans and I wrote the ads, I wrote the catalog, and that came really easily to me.
Dennis Scully: So you learned how to be a copywriter.
Annie Selke: Learned PR.
Dennis Scully: You learned PR from a great brand. And then what did you do next?
Annie Selke: Then I went to work for a licensing company in New York as the manager of product development, really with no skill to do that, I would say. But I loved that job. So the company handled Versailles, Giverny, and the Museum of American Folk Art were the big properties at the time and so we were developing products for each of those properties. So for instance, for the Museum of American Folk Art, we did rugs, lamps, calendars, food. Takashimaya in Japan was putting in a whole American country store and they were basing it on the Museum of American Folk Art. So they'd fly food over for us to taste, like key lime pie and pecan pie and chicken soup and sometimes it was a epic fail.
Dennis Scully: Really?
Annie Selke: But it was just interesting like what the process, the iterative process of product development. Did sheets and flatware. That was for Giverny. But it was really, really, really interesting and I loved it.
Dennis Scully: And another training ground for you.
Annie Selke: It was great. It was great. But it sort of planted a seed in me like oh, I loved doing that.
Dennis Scully: Right. So you saw that you were energized by all these different things you'd been doing.
Annie Selke: and it was like bringing the frame of reference that I had. and I credit my mother for giving me a very broad frame of reference in terms of objects and furniture and rugs and quilts and that. I spent a lot of time in antique stores as a kid with her, because she was passionate about it. So it brought my frame of reference to bear on like oh yeah, well, that looks right. That doesn't look right. Like how to research different periods of furniture and things like that to come up with what a line should look like. So it was invaluable experience.
Dennis Scully: So you go back to the Berkshires-
Annie Selke: And then went to work for Country Curtains there.
Dennis Scully: Right. Which is an institution there, we should say.
Annie Selke: Well, it's out of business now.
Dennis Scully: Yes, but at the time-
Annie Selke: Just recently. But at the time, it certainly was. And it was sort of the biggest show on the road locally. So I went to work for them, not at Country Curtains. I managed and bought for a store that they opened and I did that for a couple of years. And then I had my daughter and then decided, you know, I want to do my own thing. So crazy me, leave the job with the insurance now that you have a newborn, that seems smart. But I had to do it. I look back and I think it was so foolhardy, but it was the best foolhardy decision I ever made. But you know, somebody should have probably counseled me out of that idea.
Dennis Scully: But thank goodness they didn't.
Annie Selke: They didn't.
Dennis Scully: So you decided to go out on your own. You buy an industrial sewing machine?
Annie Selke: Yep, I do.
Dennis Scully: And tell us what happens next.
Annie Selke: So I buy the sewing machine. I tell Country Curtains I'm leaving and they said "What are you going to do?" And I explained what I thought I was going to do and they said "Oh, we'd love to buy from you." "Well, what do you want to buy from me?" And they told me and I went and looked because I still worked for them at that time, at how much they were paying for it and then I charged them 10 cents less or whatever, and then, you know, and a business is born. Again, sort of backing into it, not building it from the bottom up, but backing into it. Like okay, well, I'm going to undercut and then I'll get that business and then we'll figure it out from there.
Dennis Scully: It ended up becoming Pine Cone Linens.
Annie Selke: Pine Cone Hill Fine Linens.
Dennis Scully: Pine Cone Hill.
Annie Selke: Yeah.
Dennis Scully: And so you said to Country Curtains "I'm going out on my own. And I'm going to start to make product. What can I make for you?"
Annie Selke: Exactly. And then so that first year, I was making mostly for them and I set up a network of home sewers. I would cut everything myself and I got really fast on certain aspects of the ties to something, I would make [inaudible 00:09:19]. I kind of loved industrial sewing machine, it's like driving a fast car. And so and then I had home sewers complete it and I worked things out. And they helped me figure out certain aspects of it. And then they said "Annie, we want to be important, but we don't want to be your only customer." It's like oh, okay. Got it. I will go get more customers. And they said "Why don't you do the New York Home Textile Show?" Okay. I'll do that.
Dennis Scully: And what were you showing at the time?
Annie Selke: I had all kinds of things, but pillows, window curtains, some bedding, like duvet. And so there was a bed and pillows and all of that. And I had sent out ... I spray painted pine cones and did a little press release with nice ribbon and wrapped it in a nice box and sent it to the people I wanted to have come visit me at the show and it worked. A bunch of people came and Garnet Hill came and he said "Annie, I have your pine cone on my bulletin board."
Dennis Scully: Love it. Your PR skills paid off.
Annie Selke: They definitely did, right? Because it got someone's attention.
Dennis Scully: Exactly. And Garnet Hill is exactly-
Annie Selke: They were the one I wanted. I was like "Yes, winning at life."
Dennis Scully: You caught the whale.
Annie Selke: I caught the whale and a very nice whale. Lovely whale. And they were instrumental in helping me do a lot of things. So this man name Greg [Covel 00:10:41] came to my booth and he was the Creative Director then and he said "Okay, show me what's not here. What's under the bed?" And I said "Oh, I have this thing that I think you would love." And he did love and it was the first product that they bought from me and that started this relationship of what do you love, what do you love and I'd always show it to him and he's like "Oh, that's great." So we had a very wonderful working relationship. So I got to do all kinds of different things for them and it was all private label.
Dennis Scully: And so they loved your energy, they loved your creativity, right?
Annie Selke: And that I could get it done. You know, that I'm industrious and I over-deliver. That's sort of a theme throughout my life. Do more than they expect of you. And I did.
Dennis Scully: Well, so in the beginning when they sort of placed their first orders with you, did you have the capability to fulfill those orders?
Annie Selke: Really? Probably not. No.
Dennis Scully: Okay, that's sort of ... I'm suspecting. Because everything was still being done at home, right?
Annie Selke: Yeah, yeah. And I had hired sewers, and one of them still works for me. She's been there 25 years now. And yeah, but get it done. Just get it-
Dennis Scully: Okay, so you were going to do whatever it took-
Annie Selke: I mean I was sewing, everyone was sewing.
Dennis Scully: Everyone was sewing to fill the order. Okay.
Annie Selke: And then we grew out of people ... I added a garage at my house. They were working in the garage. So I had five sewers in the garage. And then we really were growing out of that and my neighbors were getting mad because big trucks with fabric were coming, like semis-
Dennis Scully: Oh sure. You're getting big orders. Of course.
Annie Selke: And they had to take down the phone wires to get into my house.
Dennis Scully: Okay. Got it. Okay.
Annie Selke: So that wasn't being a very good neighbor.
Dennis Scully: Right.
Annie Selke: So we moved and we ended up moving like seven times in seven years because we kept growing out.
Dennis Scully: Got it. Okay, the business kept expanding.
Annie Selke: Kept expanding and when we moved, I guess it was the first or second move, this product that took off for Garnet Hill ... I had found this fabric which was toweling fabric, linen fish toweling, so it was only 18 inches wide. And knowing how hard it was to cut fabric ... It's kind of a pain, just saying. Precise. And it's like, oh, it's precut. Bed skirts are 18 inches. Let's make bed skirts out of this. And I did. And I said "Oh this is so perfect for Garnet Hill because they're going to love this." And they did. And I got a call from them saying "Annie, we've got a runner." Meaning it was selling like crazy.
Dennis Scully: Taking off.
Annie Selke: Taking off and it was probably the most hectic Christmas. Because I remember, we were in there Christmas Eve, Christmas Day working probably 12 hours. I was working in the ruffler, ruffle, ruffle, ruffle.
Dennis Scully: Making all those bed skirts.
Annie Selke: Making all the bed skirts and Barb was in there stitching them. My daughter who's like two at the time, I'm teaching her how to put the SKU label on.
Dennis Scully: Some sweatshop labor was being thrown in.
Annie Selke: My family was in there packing boxes. It was crazy. But a good problem to have.
Dennis Scully: How exciting.
Annie Selke: So exciting.
Dennis Scully: Right?
Annie Selke: Really, really really exciting. And yeah, it was great. That was great.
Dennis Scully: And you knew you had a real business now.
Annie Selke: Yeah. And that something I conceived of was so instant hit and just couldn't get enough of it. And then from there, then Garnet Hill trusted me and also wanted to help. I said "I'd really love to do sheets too." But sheets, again, tricky. Sheets are wide goods. It's 120 inches wide. You can't do that at home. You just can't. It's too big. It's a whole other operation. It's minimums and I didn't really understand that business. I wanted to understand that business better and Garnet Hill introduced me to a sheet vendor from Israel actually and ended up doing a tremendous amount of business with him and through him. So that was ... They helped me get into that business.
Dennis Scully: So they really helped you along.
Annie Selke: Yes.
Dennis Scully: And ended up being this incredibly valuable partner for you.
Annie Selke: And then I started doing quilts and they were like "We love your quilts. We'll do that." And then I had almost every mail order company buying-
Dennis Scully: Buying your quilts and your bedding.
Annie Selke: Yeah.
Dennis Scully: Okay.
Annie Selke: And it was private label. I wasn't, again, didn't need my name on it.
Dennis Scully: Right. So it was all their labels that you were putting on it, but you were the one that was designing the product?
Annie Selke: Yeah. Designing it and always wanting to push it. So I would work with the different, whether it was L.L. Bean, Garnet Hill, Eddie Bauer, Cuddledown in Maine, a bunch of them. Like okay, I get your brand. Here's what I would do. Not taking them out of their box, but just pushing the limits of what would be sort of an update on their brand. And I continued to do that for a number of years, and successfully.
Dennis Scully: And successfully, right. So how are you managing the business at this point? You don't have a business background, perse.
Annie Selke: Well, now I feel like I've got four MBAs and then some.
Dennis Scully: Right, but at the time how were you managing the growth of the business?
Annie Selke: It's tricky. You're adding people and capacity and it's like how you handle financing and how you handle getting paid for things. And my husband did join me about a year and a half into starting the business and I was like "You know what? I think I'm in a little over my head, just saying." Because we were doing the show in New York and he had always wanted to run a small business. So it was sort of a natural, he was sort of better at operations and I did design-
Dennis Scully: Mm-hmm (affirmative). Okay. What was he doing at the time?
Annie Selke: He was working as a broker. He worked for Smith Barney.
Dennis Scully: Okay, so he was a stock broker.
Annie Selke: Mm-hmm (affirmative).
Dennis Scully: Okay.
Annie Selke: And he had worked in New York for years and years and that's what he was doing up there, but he hated it. He really, really hated it.
Dennis Scully: Okay.
Annie Selke: And I was like "Honey, I would rather you flip burgers than come home hating what you're doing every day because life is too short to have that approach."
Dennis Scully: So come help me in my newly, wildly-
Annie Selke: Come help me.
Dennis Scully: Successful bedding business. It's really taking off.
Annie Selke: Yeah, it was exciting. It was very exciting.
Dennis Scully: Okay. So today everyone talks about scaling, right? So how you were scaling this business. So you had to hire the people, you had to figure out the accounting, you had to get paid from all of these places who were buying your product. And so you started hiring some key people?
Annie Selke: Yes. I mean, you start hiring what your immediate need is. So you have sewers. And then after you have so many sewers ... I knew immediately the second I had an employee, I was like "I'm getting a payroll service. I do not want to mess with the IRS." Just like I know what I don't know. Let's get that handled. And then mostly I was adding production people. And then when you have a lot of production people, you need a manager of the production people. You add people as you need them and continue to. But now I have 221 employees, which is kind of crazy. Started asa party of one-
Dennis Scully: Really remarkable. A home business and now you've got 220 employees.
Annie Selke: 50 of whom are in India.
Dennis Scully: 50 of whom are in India. Yes. So tell me about that. When did that come into being?
Annie Selke: So we've had an Indian office for I want to say 12 years. And it was the brainwave of my then husband. We're not married anymore. But we had an agent in India. Again, one of my customers, Eddie Bauer was a customer. I said "We're going to India because I find a lot of the fabrics I'm using are from India so I think I should go to the source." So I went and she said "Oh, let's hang out." And she introduced me to our first agent. And that was like oh, wow. This is fabulous. And that's where I was looking for a specific type of boutique quilt thing. Found the vendor, found this. That was really exciting. That opened up a whole other world instead of us physically making everything, having other people make it for you to your specification, which brings with it its own headaches, but it's really pretty amazing to conceive it and say "I see that and here it is." I still get a kick out of that. I do because you're like cool. It was in my head and now it's on your bed.
Dennis Scully: And now it can be made over in India and I've got a whole team of people who, once you train them and once you show them what your standards were, they were able to produce it for you.
Annie Selke: Right. So we worked with agents and that can get a little tricky because you're never sure where money is changing hands and for what and if they send you bad product, it's very expensive to get a quilt, for instance. It costs $17 to get it. That was way back then, but $17 to ship it from India to here. Then if you have a problem with it, if there's a hole in it, if there's something like you can't sell it, you shouldn't have spent all that money to ship it here. So we opened an office in India to do quality control. So it went through everything. So it was our employees. There were no agents. And our employees. And if there was something wrong with it, it was sent back to the vendor. If it was good, it was shipped to us. So that saved a lot of time and effort.
Dennis Scully: And was that very challenging, setting up an actual office in India and having your own employees in India?
Annie Selke: There's a fair amount of bureaucracy around it because they were based on British system. They have a Parliament and all of that.
Dennis Scully: Right, the Raj system.
Annie Selke: But we did it, we did it. We figured it out. And have the same head of office. Have had him for 12 years. He's amazing. They're part of the family. And we had a 10 year anniversary party of there. It was great. It was so lovely. For all these people who have been with me over there for so long. And they love the company and they love it when we come over and they come see us. And yes.
Dennis Scully: We're going to take a quick break for a word from our sponsor, but we'll be right back.
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Dennis Scully: So people on Wall Street always say "Oh, the market hates uncertainty." So there's all this recent volatility in the markets because A, people were already concerned that we were perhaps approaching the end of perhaps this business cycle, right?
Annie Selke: Mm-hmm (affirmative).
Dennis Scully: So we've had one of the longest bull markets in recent history, as well as one of the longest economic expansions. And so people are waiting for some shoe to drop and whether it's the Fed raising rates or whether it's the slowdown in China, you can point to a whole host of issues that might turn out to be what finally tips the scales. But then suddenly you have our own administration creating all of this doubt and confusion around again, tariff issues or we've never had an administration that singles out particular businesses. GM announces they're closing a plant-
Annie Selke: Oh, I know. Like you could be a victim of an angry tweet.
Dennis Scully: Right. Well, that's the thing. So it has left a lot of businesses feeling very, very uneasy and you're doing ... You've got 50 employees in India. So you're doing a great deal of business in foreign countries.
Annie Selke: And we import from other countries as well.
Dennis Scully: Exactly. So you're importing from all over the world. And so you no doubt have your vendors saying "Hey, what's going on in that country of yours?"
Annie Selke: It's interesting. On my last trip to India, I said "What do you guys think about what's going on in our country?" And they said "Annie, we have enough going on here that we're really not paying that much attention." I was shocked. Again, being so sort of self-absorbed that it's like oh my God, everybody must be watching what's happening here. And frankly, they have their own complete mess ups as well. So they're following that. So that made me feel a little better because I want ... I want to be a good global citizen. And I want any business I conduct to be of good global citizenship. Yeah, but they have their own issues so they weren't focused on-
Dennis Scully: Yes, sadly India has quite a few issues at the moment.
Annie Selke: Yeah, they do.
Dennis Scully: Yes. And so does that ... Some of the issues India is facing with their economy and with their government, does that create concerns for you, having so many employees on the ground there?
Annie Selke: No.
Dennis Scully: No.
Annie Selke: They have, I mean, probably more stricter labor laws than we do in the United States. So my people are very, very, very protected. The vendors I've been doing business with, I've been doing business with them for a very long time. We're an important customer of theirs. We have, you know, really lovely, long-standing relationships with them. So they would let us know if something really bad was happening and they do. We have dialogues about a variety of things, but I feel like they've got our back, we've got their back. And we're reasonable people. Like let's talk this out. If there's going to be a price increase ... If linen, the price of linen goes up X, how are we going to manage that? What do you want to do about it? It may reduce how much linen we're buying. Every situation is different, but you work through it with the people-
Dennis Scully: So you've got good relationships-
Annie Selke: Excellent relationships.
Dennis Scully: Right. And you'll work through it.
Annie Selke: Yep.
Dennis Scully: And as you were saying earlier, people have come to learn that they can count on you to deliver.
Annie Selke: Yes. And pay them.
Dennis Scully: And pay them. And be a good partner.
Annie Selke: Exactly.
Dennis Scully: It also sounds like it would be difficult for a big private equity company to step in and make an investment in your organization because they might want to get rid of much of that part of your culture. What do you think?
Annie Selke: Well, that would be ... It would be a bad move. We don't have any debt. So I don't need PE.
Dennis Scully: Right. You don't need their investment.
Annie Selke: Don't need their investment. And I think you want things aligned, you want like-minded ... You can be a kinder, gentler company. You can do that. You can do it. You don't have to be all things to all people. And again, it's just not about the money. The money is great, that's lovely, but that's never been my motivation ever.
Dennis Scully: No, no. It sounds like it hasn't, but I'm sure you've had people approach you-
Annie Selke: Oh constantly.
Dennis Scully: Right? Who are interested. And you sort of turn them away. You haven't taken ... I know that at one point, unfortunately you and your husband got divorced.
Annie Selke: Mm-hmm (affirmative), yep.
Dennis Scully: Right? And you had to buy your husband's interest out, if I recall.
Annie Selke: Yep. So I have a lovely partner.
Dennis Scully: So you brought on a partner.
Annie Selke: Partner, but not a PE firm.
Dennis Scully: Okay, so this was someone who was going to help you buy out your husband's interest and then ... And is this an active partner?
Annie Selke: Yep, mm-hmm (affirmative). And they've made a tremendous amount of money.
Dennis Scully: They've done very well.
Annie Selke: They've done very well. You know, really, no, they're like "Annie, you're driving the bus. Drive the bus."
Dennis Scully: Okay. So they recognized that you knew what you were doing by this point and-
Annie Selke: Yeah, and when I don't know what I'm doing, I added an advisory board a few years ago because it gets bigger and bigger and I know what I don't know. Passion can get you pretty far, but you know, you need advice. I've never done a bunch of these things that we're doing.
Dennis Scully: And so what kind of people did you bring into your advisory board?
Annie Selke: So I have a female CEO of big ... She just actually transitioned, but of a shoe brand, footwear brand. And she is a tremendous operator. She's a CEO. She sold Cole Haan to Nike. She just has a bigger view of how things ... How you need to grow. Because when you get to our size, the decisions you're making are bigger decisions. The investments are bigger investments. Like every purchase order is ... It's a lot of money. So you just have to have other people looking at it.
Dennis Scully: So have you structured it as sort of a board of directors? Or is it really an advisory board?
Annie Selke: It's an advisory board. It's an advisory board.
Dennis Scully: It's consulting with you and giving you advice along the way.
Annie Selke: Yeah. And so when I have a question ... And I will always seek ... Oh, how do you do this? How do you do this? I'm interested in this. Because I can see sort of always far ahead. Like oh, I want to do that. And then it's like, oh, you know what? I don't know how to do that. I can see it. I know people do that. What are the steps to get there. And that's why I have the advisory board, is to help me with those steps.
Dennis Scully: With the next sort of big steps.
Annie Selke: Mm-hmm (affirmative).
Dennis Scully: And do you have an idea of what some of the next big steps might be for you?
Annie Selke: Well, right now, I mean, I'm trying to ... We're becoming sort of a multi-channel retailer ... I mean, wholesale and retail and trying to figure that out, you know?
Dennis Scully: Okay, so tell me about that.
Annie Selke: How to best navigate that, because two years ago we added a mail order catalog. So we're in the mail. We still have the 4,000 wholesale accounts and then we have a rapidly growing E-commerce business and how to have all of that coexist happily where we're all boats rise together instead of having channel conflict. So figuring that out. That's really important.
Dennis Scully: And that's really the challenge of the day, right?
Annie Selke: Yes.
Dennis Scully: So you want to be able to sell directly to consumers through your website.
Annie Selke: And it's not to take it away from somebody else.
Dennis Scully: No, no. And you've made that very clear. So you created the Dash Dollars to compensate whoever is selling your product on the ground from whatever area that order came from. So you recognize that. And as you were saying earlier, these are the companies that helped build your business in the first place. So you're always going to reward them, but at the same time, you want to be able to tell your own brand story and have all of your product available on your own site, right?
Annie Selke: Mm-hmm (affirmative).
Dennis Scully: So and putting up a website is no small feat, right? And the execution. And recently you've talked about free shipping and the issue around that, right?
Annie Selke: Yes. So we are now going to be offering free shipping to the wholesale channel. There are some exceptions.
Dennis Scully: Got it.
Annie Selke: Just a few. But yeah.
Dennis Scully: But that's big.
Annie Selke: Huge. Huge, game changing. And I've wanted to do it for three years because I understand that is the pain point and now we're doing it.
Dennis Scully: And what did you have to change to make that possible?
Annie Selke: Just a policy.
Dennis Scully: Just decide you were going to do it.
Annie Selke: A policy-
Dennis Scully: So you didn't feel that you had to make an adjustment to price, or you didn't have to lower your margins?
Annie Selke: I mean, it's all going to be okay. We look at it really carefully and I believe, again, do the right thing, the money will follow and I'm doing the right thing for that channel. That will engender more loyalty. I'm saying to you "Guess what? I hear you. You want free shipping too. I'm not trying to compete with you." They'll buy more from me. That is my firm belief.
Dennis Scully: Okay. So your wholesale accounts were coming to you and saying "Listen. You're offering free shipping on your own website. Why can't I have free shipping?"
Annie Selke: Exactly. And it's not ... I can't say "Oh, you're crazy." I'm like "You're right. And it's wrong. And I will make every effort to right that wrong."
Dennis Scully: And culturally and the business landscape today is such. And whether it's Amazon that's created this or whatever it is, people just have this expectation now of free shipping.
Annie Selke: Yeah. They do. And fine. Okay. Great. I'm an avid Amazon shopper. I won't sell to Amazon, but I'm an Amazon shopper.
Dennis Scully: And you won't sell to Amazon, right?
Annie Selke: No, no.
Dennis Scully: And tell me why not.
Annie Selke: And I love Amazon-
Dennis Scully: No, no. Sure, and we're all big shoppers. I get it.
Annie Selke: What they do is essentially predatory because they're not doing anything to lift the brand up.
Dennis Scully: Help you build your brand.
Annie Selke: And I believe it's some crazy number, like 80 percent of all product searches, all, start on Amazon. So if you went in and said "Oh, there's Jo Malone perfume. I like that. Let me see if it's available on Amazon." Because A, it goes right to your door, it's the next day. Dah, dah, dah, dah, dah, dah, dah. I also have shop with points. Love that. So and I'm guilty of the behavior that would happen if somebody's in a store and there's a rug and it's a lovely rug and if I can go on Amazon and get it with Amazon Prime or whatever it is-
Dennis Scully: With all the incentives and ... Right.
Annie Selke: Yes. And that is inherently putting that store ... It turns them into a showroom for Amazon and they bid on your terms, so they're going to buy the term Dash and Albert so that they're siphoning off shoppers who would have been buying it from whether it's from us or from a brick and mortar wholesale account. So it's just not ... They're not brand enhancing. They're just a delivery system.
Dennis Scully: Right. And so you see them as predatory and you've ...
Annie Selke: Yeah.
Dennis Scully: Surely they've approached you.
Annie Selke: Oh, yeah, yeah, yeah, yeah, yeah. All the time, all the time, all the time.
Dennis Scully: And you say "No, thank you."
Annie Selke: We say "No, thank you."
Dennis Scully: It's not how we're going to-
Annie Selke: Yeah.
Dennis Scully: Okay. Okay.
Annie Selke: We say "No, thank you."
Dennis Scully: So you figured out through your own website and through your own internal operations the logistics of delivering your product. And is most of your product in stock and ready to ship?
Annie Selke: Most of it, yep. And we have, yeah, excellent, with a few exceptions because some things sell much better than you anticipated. You never know with the first thing. You're like whoopsy. Like it's a good problem to have.
Dennis Scully: And so you've had that issue recently.
Annie Selke: Oh, we definitely. Yeah. We do. Right now our holiday catalog is in the mail and it dropped, I want to say maybe two weeks before Thanksgiving. And we-
Dennis Scully: You're already sold out on some things.
Annie Selke: Oh my God. Yeah. Of a lot of the Christmas stuff, which we didn't really know how much of it to buy. We don't manufacture that. We buy from other vendors.
Dennis Scully: Right. Okay. And you didn't know how much to carry, and so [inaudible 00:33:57].
Annie Selke: It's like oh my God. The felt reindeer. Gone. Like completely gone. And I got this lovely-
Dennis Scully: And you didn't even get a felt reindeer.
Annie Selke: Exactly. I wanted the felt reindeer. And this woman who wanted the bottle brush trees in the multicolor, she sends me an email, it came straight to me, her name was Edie, and she said "Oh, I just want to say how much I love the brand and love everything that you do, and I really love those bottle brush trees and I couldn't get any. And I spoke to your customer service people who were just lovely. They were lovely." She was so ... Everybody was lovely. And she said "I just want to put a plug in for you to order those again next year." And so-
Dennis Scully: Well, thank you, Edie.
Annie Selke: I emailed her right back and I said-
Dennis Scully: Of course you did.
Annie Selke: "Well, I am so sorry. And guess what? I wanted them too and I couldn't get them." Like completely ... I'm not getting them either. And again, it's a good problem to have, but they were gone in a week or two weeks. So who knew? And so now we know. But it's a good problem to have.
Dennis Scully: It's a good problem to have.
Annie Selke: We strive to be in stock and there's certain products that are just ... And you could sell them now and 10 years from now and just like we need to have more of an in stock. So we're constantly evaluating that process.
Dennis Scully: You're figuring it that.
Annie Selke: Improving it. Yeah. Always. I mean, it changes. Because then you have more people, you have more customers-
Dennis Scully: Well, and it's interesting that catalogs have come back as such a powerful vehicle.
Annie Selke: Well, it's a path to purchase. So they can really sort of sit and enjoy it. And I love doing it because I sold to every catalog under the sun and-
Dennis Scully: Sundance and Garnet Hill and-
Annie Selke: And still sell to both of them.
Dennis Scully: Cuddledown and you name it.
Annie Selke: Yeah. And so it was really, like getting an MBA again. Like okay, well, how do we do catalog? What is our mark to make? What is going to set us apart from other people? And I was delighted to get feedback from people that I had done business with years ago at different catalogs and they said "Annie, the catalogs great. It's fabulous, it's lovely. You did a really good job."
Dennis Scully: That's great.
Annie Selke: Yeah, loved that. Loved hearing that.
Dennis Scully: So what did you decide? How were you going to do catalog differently?
Annie Selke: Well, I mean, you want to show the whole story because yes, we sell rugs, we sell bedding, but how do you put it together and I think that's what the consumer really wants help with. So it's a content thing. But finishing the thought. Here's how I would do it and I'm not saying you have to do it my way ever, but this is ... Let me finish this thought for you and different themes each season and building those themes out with furniture, with accessories, things that we don't manufacture necessarily, but trying to complete the thought. We've just added wallpaper, which is cool. We're adding window. Also cool.
Dennis Scully: So and at what point did interior designers or some collaborators become a part of the mix and what led you to that? Like Bunny Williams, for example, who has got a beautiful collection with Dash and Albert. Tell me how that came about.
Annie Selke: So I've always been a fan of Bunny's work. She's an icon, amazing, right? And she was friends with my stepfather and mother. I had never met her, but she knew my parents.
Dennis Scully: She knew extended family. Okay.
Annie Selke: And because they were friends of sister parishes and she worked for Parish Hadley all the way back. And we had the same ... Still have the same PR person, Elizabeth Blitzer.
Dennis Scully: Absolutely. Elizabeth Blitzer. I know her well. Long time friend.
Annie Selke: And she said "Oh, Bunny wants to do rugs. What do you think?" And I'm like "With her? Yes."
Dennis Scully: You bet.
Annie Selke: You bet. And it was probably the quickest, easiest ... It wasn't even a negotiation. It was just like done, done, done, signed, quick, not painful at all. And we've made some beautiful rugs together and made some money together, which is great. We got to shoot at her ... She sold it, but the house in Punta Cana, which was an exceptional one. And we've shot at the house in Falls Village. She's really generous with her beautiful spaces and places. And I love her. And she said "Oh, you're like family. Let's just do this." So we did it and it was very easy, continues to be easy. So we have a new collection of hers coming out in January.
Dennis Scully: Well, and she says very candidly that she only partners with people that she really likes. So it speaks well of you.
Annie Selke: Ditto.
Dennis Scully: And also, I mean, that's obviously worked out well. And I know you've got a collection with Mark Sikes that's coming up.
Annie Selke: Make Sikes debuts in April, high point. And then for retail it will debut in June in the catalog. And we also have a collaboration with Laura Park, who is a fine artist from Charlotte, North Carolina and I saw her work and loved it and she had started doing her own textiles and I saw it and I said "Oh my God. That's really, really cool." It's the thing that stopped me in my tracks and the Atlanta Gift Show a year or so ago and I said "You know what? I can make her life so much easier." I can make the stuff better than she because I have more contacts and more ... And she's an artist. Textiles is a whole other thing for her. And I said "You know what? We can do this. You don't have to do this. But I would like to offer you that opportunity." And so we have a really gorgeous, groundbreaking collection coming out of ... It's bedding, rugs. The rugs are crazy good. So that's launching in January.
Dennis Scully: That's really exciting.
Annie Selke: Yeah.
Dennis Scully: And tell me about this recent tile collaboration that you've got.
Annie Selke: So that ... Like there are people for whom essentially we license them. This is the Tile Shop licensing me. I've done licenses for furniture, fabric and for now tile. And they approached us. We worked with them in 33 Main. They were our tile sponsor, so I got to know them and did a beautiful job. They were really happy with how it all turned out. And then they said "We'd like to do an Annie Selke tile collection to adapt our textiles to tile." Which at first I thought "Huh. I don't really get it." And then I had a light bulb. I'm like "Oh, yes. Bed and bath." People usually put the tile in first before they choose their bedding or their rugs. So then it made perfect sense to me. And then we had a great collaboration of ... You know, I showed them things that I thought would be amazing for tile and it's like "Yeah, I think we can do it." And there was a lot of technology around how you can get a tile to look. And they have texture to them. They're amazing. There are 200 different tiles. They're beautiful, beautiful, beautiful.
Dennis Scully: It looked beautiful from what I've seen of the product and it looked like your designs translated really well.
Annie Selke: Really well.
Dennis Scully: Onto tile.
Annie Selke: Yeah. It's great and I'm in the process ... I'm renovating a barn right now and I'm going to be using some of the Annie Selke tile. But it's really ... I've never seen anything like it and that's what you love, right? Is something that's not ... Let's not make another gray tile. Let's do something ... And it's not all ... There's some definite some color, but there's also some beautiful neutrals. There's things that look like they're from a Tuscan farmhouse and then there's some really contemporary things. Yeah, it's a beautiful collection and they're amazing to work with.
Dennis Scully: So as we wrap up, you've talked about the incredible culture that you've built and the value system that you've put in place at your organization and that really, that's your great legacy.
Annie Selke: Yes.
Dennis Scully: Where did those values come from for you? Who taught you that?
Annie Selke: Oh boy. Barb, this woman who's worked for me for 25 years. When I interviewed her, she said "Well, my last job, they weren't paying my social security and they weren't this." And I made her a promise and I said "Barb, I will pay you before I've put food on my table. Promise. From here to forever." And she loves to tell that story. And I said "Barb, have I ever missed a paycheck?" And she said "No." She's so proud of what the company has become. She's thrilled. Yeah, so it's lovely to have. And then I have somebody else who just had their 20th anniversary last week. I'm like oh my God, it keeps ... Everybody gets $20,000 when they hit 20 years.
Dennis Scully: Is that right?
Annie Selke: Yeah. Because people are ... I didn't plan like oh, I'm going to be a 50 year old company. Sort of make it up as you go along. Like what would be the right thing to do for people who have been with me for five years, for 10 years, for 15 years and 20 years? And at 10 years we give everybody two weeks off and $3,000 that they can't pay a mortgage, car payment, nothing. They have to go do something-
Dennis Scully: They have to use it for a vacation-
Annie Selke: Well, something that is life affirming, whatever that-
Dennis Scully: Whatever that means to them.
Annie Selke: One person bought a parrot. One person went to Paris for the first time. One person got a plane for the first time. But you know, it's like take the money, take the time, do that. Do something for yourself.
Dennis Scully: Can I say how much I love that one person bought a parrot? Did they bring the parrot in to the office?
Annie Selke: Oh, we know the parrot. We know the parrot.
Dennis Scully: Fantastic.
Annie Selke: This is someone who doesn't particularly like to travel, but that's a life affirming thing for her, having a parrot. So cool. My mother had three parrots, so I'm all about the parrot.
Dennis Scully: So you're no stranger to the parrot.
Annie Selke: No stranger to the parrot.
Dennis Scully: Okay. Well, that's fantastic. So this again speaks to the incredible culture that you've created at your company. So it sounds like you have a lot of people who have stayed with you-
Annie Selke: A long time.
Dennis Scully: For a long time.
Annie Selke: A really long time. And we did a workshop ... God, it's like 15 years ago now. And it was a DISC, if you know what that is. It's sort of a personality testing thing. Which, oh my God. It was so enlightening. I wish I had done it way, way, way back-
Dennis Scully: Years ago. Okay.
Annie Selke: I guess I always ... Again, I don't want to be selfish about it, but I sort of see the world through my lens and doing that it made me realize oh my God, everybody has a different lens. Not everybody wants to be promoted. They don't. I assume they do, but they don't. I've come up against that. And what I recognized going through this was I wanted people to wear a hat with what they are. They're a DI, or an SC, or an DC and what that meant and what their personalities were. And going through it and the woman handed me back my ... The facilitator. And she's like "Annie. You have the right job. You're 100 percent D and 100 percent I." I was like "Oh, good. I'm glad I'm doing the right thing." But understanding how different people want to be spoken to, what they want. It was so enlightening, it changed the way, really, the course of the business for me and now anybody we hire does a DISC and you would have access and you can know-
Dennis Scully: Explain for our listeners who might not be familiar. Just briefly explain the DISC program and what it teaches you.
Annie Selke: It teaches you about how you handle anything. So dominance ... What is it? D-I-S-C. S is steady. C is conscientious. Dominant influencer. I is influencer. And what sort of quadrant, how you break up. And how this person likes ... What's the best way to deliver information to that person? What's the best way to get information from that person? Here's their make up.
Dennis Scully: Exactly. So it not only goes into people's personalities, but it also sort of educates you-
Annie Selke: Approaches to that.
Dennis Scully: About how these different personalities hear things and how they can best be instructed and how you can best partner with them.
Annie Selke: And giving everybody the ... If you're like "Oh wow. You're a DI. Well, I'm an SC. We're different." It's not just my way. It's everybody's way and it takes every type to make an organization move forward. And it's so interesting. And so the last time I did it might have been a year and a half or two years ago. My D and my I are lower now because I have more people. I spread more of my D and my I out. So I have other D's and other I's who are-
Dennis Scully: Who can dominate for you.
Annie Selke: Yes, exactly.
Dennis Scully: Right.
Annie Selke: Yeah, so that's been really, really interesting. And what it taught me is that people ... So somebody may want to be promoted, but somebody else in the warehouse, when I tried to promote, he's like "Annie, I don't want to do that. I don't want to be the boss of my friends." And I said "You're really good at this. You will excel at this and wouldn't you rather your friends had someone like you as their boss than somebody who might come in off the street?" So like cajoling people into these roles. But when you find out what they love about the job, it's not necessarily advancement. We have cookouts every Friday in the summer. We have Easter egg hunts. We have bowling. We do all these other things to create community and people come there every day and are really happy to be there. It's a self-selecting group. We have a lot of people who are brothers and sisters work there, husbands and wives work there. Cousins ... Like a lot of ... It's a lot of ...
Dennis Scully: So you have a lot of internal referrals.
Annie Selke: Yes, yes.
Dennis Scully: And you have a lot of people who have brought many people on to the organization.
Annie Selke: Yes.
Dennis Scully: And you've kind of created this sort of summer camp like atmosphere at the place. Cookouts ... Do you sing Kumbaya? Are there-
Annie Selke: We do karaoke, I will say. And you know, at the Christmas party, which is coming up this week, it's on Friday, and people ... I get up and talk and I always get verklempt. I can't help it because it's so personal, it's so personal. And I'm deeply grateful to all of them every day for what they do. They make this possible. You can't do what we do without having someone packing a box and shipping a box and caring about the box getting there. All of it. Every step of the way, you have to be invested in it. And my people are and it's because we give back to them. Let's make your world as great as it can be. That's sort of my mission. That's what my eulogy is. I don't care about the money. I really don't. I really don't. If everybody could create ... And I don't want to call it a utopian society because it's not that, but a community where you take care of your people, you pay their health insurance, you give them 401K. And you create ways in which they can cross-pollinate, warehouse and offices and that's why we do all these other events so that people know each other in the building. We have an excellent wellness program, we have a great fitness center. I mean, smoking cessation, Weight Watchers. You name it, we do it.
Dennis Scully: So you're helping your staff in all sorts of ways and this is what you've found has helped to make your business so successful and make your employees care so much.
Annie Selke: Yeah. And tremendous loyalty. I mean, these people, they don't leave. And that helps an organization. They have the DNA of the company and how you ... Because with 201 people, I can't be in every situation all the time. I have to trust that people that I've worked closely with and now who are working closely with them have the DNA of the brand and how we treat people.
Dennis Scully: Right. Yeah. Well, thank you so much for making the time to come and see us.
Annie Selke: Thank you.
Dennis Scully: I've really enjoyed getting to speak with you. My guest has been Annie Selke, founder and CEO of Annie Selke Companies.
Dennis Scully: Thank you again for joining us. The show is Business of Home and I'm Dennis Scully. If you like what you hear, please feel free to subscribe and tell a friend about the show and most of all, leave us a review on iTunes. Thank you again to our sponsor and our producers. You can find us at businessofhome.com or on Facebook or Instagram. We'll see you next week.