The Ledger
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Segal offered half of Crate & Barrel for $10,000 before opening
“I spent six months running around to everyone I knew who had any wealth and offering them half the business for 10,000 dollars.”
Segal: Youth and lack of wisdom are advantages in entrepreneurship
“The value of being very young is you have a lot of energy and passion and no wisdom. And so being that young was a great advantage”
Segal: Direct European importing enables significantly lower retail pricing for unique goods
“Obviously, the motivation of going into business was to find beautiful things for other young people, but if we could buy things from Europe directly and just mark them up normally as if you bought them domestically, not take a big margin, but take a short mar…”
Gordon Segal failed to sell 50% of Crate & Barrel for $10,000
“And I spent six months running around to everyone I knew who had any wealth and offering them half the business for 10,000 dollars.
There was no such thing as venture capital in those days.
There was no such things as startups in those days.
Yeah.
And I litera…”
Segal: Youth and lack of wisdom are great advantages for entrepreneurs
“I mean, the value of being very young is you have a lot of energy and passion and no wisdom.
And so being that young was a great advantage, and we had no children.”
Crate & Barrel's core thesis: direct European sourcing with standard domestic markups
“Obviously, the motivation of going into business was to find beautiful things for other young people, but if we could buy things from Europe directly, and just mark them up normally as if you bought them domestically, not take a big margin, but take a short ma…”
Segal's father provided a $7,000 loan to launch Crate & Barrel
“The only person who gave us the money was my father, who lent us 7000 dollars.”
Segal: Crate & Barrel accidentally sold half its early inventory at cost
“And we had ended up, because we didn't know how to price merchandise, about half the product we sold at cost.”
Segal: Landlords funded store build-outs during Crate & Barrel's expansion
“And what happened starting in that big expansion was landlords started paying for a lot of the build out of the store.
Building of the building and whatever.
So we didn't have to take as much of our financial risk ourselves, because the landlords built these s…”
Segal: Crate & Barrel sold two-thirds to Otto Group in 1998
“And in 98, we sold them about two thirds of the company.
And 10 years later, and the contract was for 10 years, we sold them the rest of the third company.”
Crate & Barrel generates about $1.2 billion annually with 7,000 employees
“It's about 1.2 billion a year. And we went from one employee and out of 7000.”
Segal: Crate & Barrel sold half its initial inventory at cost
“And we had ended up, because we didn't know how to price merchandise, about half the product we sold at cost.”
Segal: Every store opened from 1962 to 1971 was a bet-the-company risk
“Every store we opened between our opening in 62, our first built store in 65, our Plaza de Lago store in 68 our Oak Brook store in 71, every time was betting the company.”
Gordon Segal: Crate & Barrel needed massive scale for exclusive distribution
“Well, we reached a different era where it was important to have scale to do the things we had to do with buying merchandise. So you had a guarantee to a factory you'd buy a certain amount of a product to make sure we were the only people in the United States t…”
Gordon Segal: Crate & Barrel's 1990 flagship made them a mall anchor
“In 1990, we built a flagship store in Chicago, which really helped launch our expansion because then every landlord, every shopping mall wanted a crate and barrel building. And we were a big attraction because we drew in a lot of customers. And what happened s…”
Segal: Crate & Barrel sold two-thirds stake to Otto Group in 1998
“In 98, we sold them about two thirds of the company. And 10 years later, and the contract was for 10 years, we sold them the rest of the third.”
Segal: Crate & Barrel tripled size and quintupled profits post-acquisition
“And our success was we tripled the size of the company, we quintupled the profits of the company, and we were able to grow.”
E-commerce drove 40 percent of Crate & Barrel sales by 2017
“And early on, then we started developing our internet business, which today represents about 38 to four percent of all the sales at Crate and Barrel.”