My friend Sarah posted about Hobby Lobby on a recent blog http://lovelettersillustrated.blogspot.com/ which reminded me of a great article that I had read. I'll paraphrase and retype quickly some of the reason Hobby Lobby is successful according to several different vendor. This is can be found on Mike Hartnett, Feb 2004 Creative Leisure New in the Business Wise column.
The article starts out like this:
From opening a 300 sq ft store to 1.1 billion dollars? They are closed on Sundays, don't have the fancy POP technology at checked counters, etc.... So how did David Green achieve such success. They asked some vendors who sell to HL and are HL's competitors.
1) manufacture much themselves and import a much larger proportion of product directly from Asia. (this is the kickers) In many cases they will buy new lines from a vendor, but once they see the sales movement, "knock it off" themselves. They are very open about this strategy and as a manufacturer you have to decide whether this type of business is worthwhile (they manufactur, distribute and retail their own product)
2) keep product on shelves
3) store size and product mix attracts a very broad consumer base
4) lease costs are lower because they tend to operate in "secondary" locations.
5) hire genuinely good people
6) buyers have YEARS of experience
7) Honesty and integrity
8) Very easy to do business with them
9) straight forward business
10) they open new stores regulary, but only if they can use their own trucks to ship goods to them
11) they don't make HUGE margin on everything they sell
12) loyal employees
I've also read somewhere that they own their own construction company, so anytime they remodel an exististing store (which as stated in #4) they use their own people, so they are making money for themselves. Hobby Lobby incorporates a lot more than just the store, they have lots of subsidary.
I think HL is a facsinating company, considering they are closed on Sunday's and still make money hand over fist!
More later!
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