Tom Blumenthal - President and CEO of GEARYS Beverly Hills

Hey, everybody, and welcome to the Small Business show here at businessshow.co Shannon I am stoked to share this interview with everybody today.

So am I. It's really a little different type of business owner that we've had on before, and he's got some great insight. He's been through a lot. This is a business that's been around for 90 plus years. And, you know, anything that's made it that long, it's worth listening and hearing about.

Yeah, it's interesting. He's been, he's been running it for 18 of those 90 years. And 18 years in business is a long time and commendable all by itself. And then you. And then you look at that and it's like, oh, well, it's kind of a drop in the bucket compared to how long the business has existed.

Yeah. And he's got a. Just a fascinating story about the business moving, you know, in and out of his family and back in control and everything else. So we're, we're really excited to, to talk with Tom Blumenthal of Geary's today. And I think you're going to really enjoy this interview.

I think so, too. I, I don't have anything else. I want to get right to it, if you're ready. I'm ready.

I'm ready, man.

Well, he is. Shannon Jean. I'm Dave Hamilton. We are Small Businessing and this is episode 319 of the Small Business Show.

You know, it's not often that we have a guest on the show that's running a business that has been in operation for over 90 years. You know, Crazy. Yeah. A company that, you know, they, they may have started out small, but they've grown to locations in Southern California and they've got over 80 employees. So they've, you know, it's fascinating. I love it. Tom Blumenthal, you know, he's had the challenging task of stewarding what's really a storied brand in Southern California and beyond through the coronavirus, adapting, you know, to make it through that, and also just adapting to the changing customer habits, how people want to shop, this kind of thing. So Tom is a president and CEO of Geary's Beverly Hills, and we're really fortunate to have him with us today. Tom, thank you so much for joining us on the Small Business.

Well, thank you for having me, Shannon. Happy to be here.

Yeah, that's great. I appreciate it. Before we get into some questions, can you give us a bit of history related to Geary's and then describe to Our business listeners really the business model and the business that you're in.

Sure. So I always like to say that Geary's kind of grew up with Beverly Hills. And we were founded in 1930, right in the heat of the Depression, I might add, by H.L. geary. And as you know, Beverly Hills in 1930 certainly wasn't what it is today. It was just like any other small town. USA had its drugstore and its movie theater and diners and just a lot of general businesses in downtown Beverly. Beverly Hills and on Beverly Drive, which is where our flagship store has been for over 90 years, was started really as kind of a general store. It had a little cosmetics, a little jewelry, a little home homeware. It was just kind of your everything type of store in 1930. Mr. Geary passed away in the early 50s. His wife tried to run it for a while and ended up deciding that it wasn't for her. And so she sold the business to my grandparents in 1953. And they had a little broader vision for the store then and took it to a level of concentrating really more on home entertaining and china, crystal and silver. And you know, at that point they bought the store. There were nine employees and you know, they didn't have air conditioning in 1953 and so they spruced it up a bit and added air conditioning, focused merchandising on china, crystal and silver. And then my uncle got into the business in the late 60s, early 70s, and then he brought it up several notches, concentrating more on the high end part of the business and establishing a direct mail business. And then into the 80s and 90s. And then in 97 he decided that he wanted to concentrate more on our real estate rather than the retail business and sold the business to a company on the east Coast. I was working here at the time. In fact, I've been working here since I was 18 years old throughout college and did take a few years off to get some outside experience and then came back. But I thought at that point my world was over. My family business had been sold from under me. The people that they sold it to ended up hiring me. They lived in Providence, Rhode island and weren't planning on spending a lot of time here, so they hired me to run the business. Fast forward five years later, they actually ended up selling to a venture capitalist group and they didn't want to have Gary's as part of the portfolio. So they ended up selling it back to me five years later. So everything kind of, yeah, it was very Flowers.

I mean, you know, the Way. The way that worked and that you were able to stay on and then be ready for when that opportunity came around.

Yeah, it was great. I mean, I couldn't have written the story better myself if I had to.

That's fascinating. So you. You were able to sort of take over the family business without having the family over you.

That's right. Now, that doesn't just happen. You know, at the time I was. I was. I think I was 31 years old, so 32. I mean, I didn't have the resources, obviously, to just write a check. Sure. And so. But I. So I did have to go to my family, and they were 100% supportive. My parents could not have been more supportive. So we were able to put the whole deal together within the whole thing was closed just shy of 90 days from the day they told me they wanted to sell.

That's incredible.

So you really did kind of have the family over you, in a sense, with them financing. So you weren't quite out from under that rug.

Yeah, yeah.

Yes and no. I mean, listen, I was certainly running the show and they were not micromanaging me. We had. I have a board of directors, which is pretty much all family and a few close friends, but at the end of the day, it's my show and I've been running it for the last almost 20 years. Yeah. What a great story.

That's interesting.

So I'm curious. So you took this over, like you said, 18, almost 20 years ago. The market of retail has changed. Forget about COVID or let.

Oh, my gosh. It's changed.

But that's the thing, right? Like, Amazon wasn't a thing. In fact, having the Internet in one's home was barely a thing when you took this over. So how do you survive?

We did not even have a website when I bought the company. Of course, I believe it in 2003, we were just talking about doing it. And so obviously we've done a tremendous amount in almost 18 years. We had one flagship store on Beverly Drive in 2003, and now we have five stores. Three in Beverly Hills, one in Century City, one in Santa Monica. And our website, which has grown dramatically in the last couple of years.

I bet that's wonderful. One of the. Talking about that expansion, as I was researching about Gary's. It just seems like adaptation after adaptation. And I just have to commend you for that because when I first started looking at your stores, I was like, man, I have no idea how this works. I've been in the Internet business my whole life. One way or another, technology and everything else. And I think I was just so impressed that. And so happy to see stores like yours still here. And I just know that there's just a constant embracing.

I'm not trying to toot my own horn, but it takes somebody that's got the passion for this type of a store to still be here, because, let's face it, it's. You know, we are doing quite well. But, I mean, it does take somebody that really wants to build it, run it. And I'm here every day, and I come in here like it's our first day of business every single day. And then, you know, we've been blessed to expand with Rolex specifically and Patek Philippe by opening the Watch boutiques, you know.

Yeah. Can you. That's another part of the story that's really intriguing to me is this, you know, coming together with these other brands to expand your own. Can you speak to that a little bit? How something like that, you know, how you formatted that relationship and then, you know, built an entire new store to grow that.

So when I bought the company, we had Rolex was part of the merchandise mix with the people that had bought the store from Rhode Island. They, in fact, we got Rolex for them. And so we had a. I already had a good relationship with Rolex. And, you know, when you're an authorized dealer, you don't just sell the company. It has to be approved by them for the distribution to stay. So obviously, they did approve me. And within a year of me opening or buying the company back, they decided they wanted to have a presence on Rodeo Drive, which is right around the corner from our flagship store. And I was, like I said, brand new at running this company. Only had owned the store for maybe a year at this point. I was. It was part defensive, but also partly really exciting to be able to do this on Rodeo Drive. But I can tell you 100% of the people that I went to to talk about doing this said I was crazy to open a store around the corner with Rolex because you already have it in the main store. Why do you need it on Rodeo Drive? Well, I'm so glad I didn't listen to anybody. One of those. One of those decisions where you just, you know, if you don't take a risk, you're never going to go anywhere. And I did take the risk of doing this, you know, even with all the advice I'd gotten not to do it. But something just told me it was the right move. So we did it. And since, you know, that's where the expansion really started. And then we opened up three stores later. In fact, we've moved to a bigger location on Rodeo Drive from that original one. So I'm, you know, to. I do like. I do like to say that I did make the right decision. Sure, sure.

It sounds like.

Served. It's. It's. It served us really well.

And is that, you know, was the concept okay, there. There's a dip. We want to serve a different demographic.

Or a more focused, totally different customer on Rodeo Drive from Beverly Drive. Even though they're literally right around the corner from each other, they're worlds apart.

And how are they different? I have no. I don't know anything about this. How does that work?

So Rodeo Drive is, you know, kind of the luxury capital of the world. It's very heavily tourist driven, even though we haven't seen a lot of tourists these days because of the pandemic. But it just. Even people that live in Southern California, there's very little overlap between Beverly Drive and Rodeo Drive. It's just very different.

Interesting. No, that's great.

And then, as I said, I think it was seven or eight years later, we opened up branded boutiques on Rodeo Drive. One for Rolex and one for Patek Philippe. In fact, it was the first Patek Philippe boutique in the United States.

That's.

That's awesome.

And yes, expanding with that same model is terrific.

Right, right.

That's great.

So after that, we've opened up two more Rolex boutiques.

And how has. How has Covid affected those? Because I'm guessing you don't have any option to sell that stuff online. So.

So, yeah, no, we. We show the product online, but the transactions have to happen with. Within our store, which is really a great, great model to work by when you're selling luxury like that, because, you know, they want to protect their local jewelers, their local dealers, and not have somebody from, you know, the UK Or Saudi Arabia ordering product. Or even within the United States, they really are trying to support the jeweler in every locations. So they don't allow us to sell online. And we do have to have a relationship with every customer that we're dealing with face to face.

Makes sense. Yeah. So you mentioned, you know, Covid and the pandemic. When I want to dig into this a little bit. When did you first you and your team realized that, okay, this is, you know, gonna be serious. This is gonna impact us dramatically?

You know, it's just about a year ago today. We have. Every year we Have a huge event in our main store. It's our annual sale and people line up, you know, they get here like three hours before the store opens on the first day. And there's usually lines. I mean, we have, we do well over 1,000 transactions on the first day of the sale every year. And it's always in March. It's always like the second or third week of March every year. And of course, this is a massive event that takes a tremendous amount of planning and execution. It just doesn't happen overnight. In fact, we start planning it usually six months in advance. But obviously this time last year there was a lot of nervousness about the pandemic and what was going to happen. And the week that we were going to do the sale last year was when the country shut down for what was going to be for two weeks. Right. So we decided, well, we'll postpone the sale because we couldn't possibly not have it. Well, you know, that two weeks then led to four weeks, four more weeks. And it was inevitable that first of all, we'd had no idea when we were going to reopen. And in, when we did reopen, we weren't going to be able to do the sale.

You were just completely shut down. All of your stores?

All of the stores were shut down. We were still operating our web business out of our main store. So there were a few of us that came in every day. But that was really just to fulfill web orders and customer service situations. But we had no transactions in any of our stores other than them online. Wow. And again, it was extremely nerve wracking from a proprietor standpoint where, you know, I can, I told all my employees, you're all on, you're all going to stay on payroll. I'm not laying you off again. Originally it was two weeks and then it was an additional four weeks. And I kept sending emails out to them saying, don't worry, you're still employed. We ended up not laying, you know, we ended up not furloughing or changing our key staff at all. We had a few people that we did lay off, but only a very few. And terrific. The other 75 stayed on and were fully paid throughout the whole pandemic.

Good for you. Did you.

That's great you were able to do that.

Yeah. Did you partake in any of the programs?

The PPP loan? Yeah, I did apply for a PPP loan and got it again. We certainly qualified because we were keeping our, all of our staff on. I mean, I had a spreadsheet that went like you know, with probably 25 columns to see how much longer the cash flow would be to keep people on payroll as well as pay our rents. We paid all of our rents.

Yeah. That's impressive.

So the PPP was very helpful. It did do it exactly what it was supposed to do. Keeping your people on payroll, paying your landlords and paying your utilities. Which is exactly what.

That's what. Yeah, it was, you know, pre unemployment.

Right.

Either.

Right, right. Which is smart. Exactly. And so then, you know, finally we. They allowed us to do curbside pickup, which I thought to myself, well, that's really not going to work for us all. A Rolex watch, curbside. But we were able to have people come in to pick up orders and things like that. And that lasted a very short period of time before they did allow us to reopen on May 30 or May 27, I think was the first day the stores were open for business after being closed from March 13th. Wow.

And that was unlimited.

Limited capacity, but at least in the house with customers, obviously we had gone through to prepare for that great extent to. We rearranged furniture. We bought, you know, plastic shields. We invest, you know, obviously everybody wearing masks and temperatures taken. And we're still doing all of that today, several, you know, almost six months later.

Yeah. And. Yeah, that's fascinating. So the curbside pickup, I read somewhere that you were doing some interactive shopping experiences for some customers.

Yes. Now we independent. We're still all of these, you know, it's interesting, all of these pandemic protocols that we put in place. I think we're going to keep them and maybe not the shields and the maps eventually, when we don't have to do that, but. Or taking people's temperatures when they come in the building. But, you know, it's a little personal.

Yeah, yeah.

Curbside pickup has really served us well, especially during the holidays. And then we also were doing virtual appointments with clients over FaceTime. So all of our sales associates, we provide all of our sales associates with iPhones and they can work with a client over the. Over FaceTime. And that happens regularly and it still does.

And it's something the client would request, I need some additional help or something like that. And then the salesperson sets up an appointment and they go through those things.

Or I don't feel comfortable coming in. Can we shop over the phone over FaceTime? So I can actually, you know, see the. See the merchandise as best I can.

And does that work for your partnerships with Rolex and Patek as well?

Not really. Those Those transactions really need to happen in person.

That's what I thought.

Yeah. Okay.

Wow, that's fascinating. I love the concept of you're going through this pandemic and the recovery and everything, but then you're immediately like, well, I think we're going to keep this, because if your customers are responding to it in a positive manner, why wouldn't you?

Yeah, right, right. I mean, listen, good things can come from everything, and this is certainly one of those. We've learned a lot, I can tell you that.

I'm sure. Yeah. And I think that, coming back to my earlier comment about embracing change and adapting and all that kind of stuff, is there a struggle between. You have this very long, traditional business that's, you know, got such a great reputation, but then you're trying to change all the time, to adapt to new, you know, what your customers want and everything. Do you have to balance? Do you have customers that rebel against some things, but other, you know, how does that. How does that work?

You know, when we've. When we've changed certain policies, there's been. Once every once in a while, you get a little pushback. But at the end of the day, I think people, they're just grateful that a store that's been around for 90 years, years is still here and doing the core business that we've always done. And, you know, there's not a day goes by that I don't get a phone call or I see somebody that they're just so grateful that the store's still around, because, let's face it, there's a lot of great companies, even before the pandemic, that just haven't survived. And the fact that, you know, we're still, you know, independent, we're not owned by a conglomerate. There's still a face to the store, you know, and I get involved, you know, all day long, and I'm here, you know, unless I'm traveling for business. My office is in the store.

Yeah.

And I'm happy to be here.

That's great. Have you continued that tradition? Do you have family members that, you know, I don't.

I don't have. I don't have any. I'm not married, and I don't have any children. So we. I don't know what the next generation is going to be, but we're. We'll. I. It'll be. It'll be fine.

That's great. Oh, yeah, of course. So one of the things that, you know, here you're involved in trying to keep your stores, you know, up and running, keep everybody employed. But I know you're. You're also involved in this Beverly Hills business recovery task force. Can you explain what that is or was is still going on? How is.

Well, we haven't met recently, but obviously before we reopened, about a month before, the mayor asked me to join this task force, along with other retailers, a couple other retailers and restaurateurs and hoteliers about how we can revitalize and reopen Beverly Hills the right way and get people to come back to shop here. And really from the moment we reopened, and, you know, the demand was really strong. Now I have to add that don't forget we were open for two days. And then there was the civil unrest that happened all over the country because of the George Floyd.

Right?

Yeah, yeah, absolutely.

So then we had to board up our stores and be closed for another 10 days.

Oh, my goodness.

So I always, I just refer to 2020 as the year. My middle name is adjust. I mean, I just adjust whatever hoop I have to jump through that day. And it's a little less daunting this year, but every day last year it seemed to be a different hoop. So, yeah, we were closed for 10 days after that. Luckily, none of our stores had too much damage. But, you know, then when we reopened again in early June, it was pretty much everybody was just so happy that the stores were reopening and that they could come out and be in the store. And it was, I mean, our business was very strong from that moment on.

That's great. Yeah, I mean, it's just like, I'm sure people just love to be able to go back, you know, to, you know, go in the store again. Something they've seen there forever, basically. So.

And one of the things that I, that we did do is, you know, the holidays are a really special time for us at Geary's. I mean, we, you know, we've always been a huge holiday centered business, whether it's Thanksgiving, Halloween, Christmas, Hanukkah, all of them. And we decorate. We always do a big, you know, big job of decorating. And I, and I said to my team, I said, look, I want to, you know, go all out this year. I mean, spare no expense. You know, I called it. We're not decorating to the nines, we're decorating to the tens. And we really, we wanted the store to just look as festive as it could be and really put people in the spirit of the season and get them excited about being in a store that's fully decked for the holidays. And that really served us well too.

Yeah. Because, you know, everything I'm hearing as we've been talking for the last 20, 25 minutes, I mean, Geary's is really a part of that local community.

Right.

Especially maybe your flagship store. And people, that sense of stability, of being able to go in there and see decorations and the holiday, like it's part of the normalcy that we've been lacking for so long.

Exactly. And I wanted to portray that we aren't cutting back at all. We are doing just the opposite. We're stepping it up to really get everybody excited about the season and put them in, in a better frame of mind. Because, you know, if you recall, during November and December, people were, they were telling us to not go to family and don't travel and don't get together for the holidays. And I mean, all the stuff nobody wanted to hear, but we really wanted us, you know, at least do as much as we could to make the store look festive and beautiful for the holidays.

That's great. So I have a couple of questions left and one of the things, we had a guest on the show a few years ago who ran a similar multi generational business and he made a comment and I wanted to see whether you agree. It was Rick Stewart with a company named Listo that been around for basically forever as well. And as a kid growing up in the business, you know, he felt it was very challenging to take over and to ultimately become the president, you know, while working among people that had seen him grow up as a kid. And he said, I think that's more challenging than starting a business on your own. Did you have any experience like that?

Oh, plenty. Let me tell you, there's a couple people that are, that still work here that worked for my grandfather. Is that right? So, and as, as time has gone, we've, we've lost a few of them, but to retirement. But my director of operations has been with us over 40 years, so she has seen, you know, as I said, she worked for all, all three of us. And you know, I wouldn't say it's harder to start a business, but I think if you're going to be the one to take over, you've got to have it in your blood. Not just because it's your birthright or because you're the eldest and you're the one that has to do it, you have to want to do it. And for me, it was always something I knew as a kid growing up that I wanted to be a part of the store and a part of this company. And so it was maybe as it was different because I bought the store five years after it had been sold, but I didn't have a problem with people that had worked for my uncle or my grandparents respecting the fact that I was in charge now.

Yeah, well, and I think you proved yourself. I mean, it's one thing we can sit here and have a casual conversation about the last 20 or so years of your life earning that, but it's full of difficulties, I'm sure, and very tough decisions. And one of the things that I just keep hearing is that you've just taken action. You know, you took the action to buy the store. You may not have had the money. You thought, you know, you were young and try to get things going. And then the expansion and the partnership and all those things, you know, it takes really a bias to action. And we love that here on. On the show. Is. Is there one? And we always like to ask our guests advice for others. You know, small business owners that are aspiring to be as successful and as large as. As your business. Is there one action item that you could kind of leave our. Get our listeners with that you would recommend they embrace to be successful, you.

Have to go with, I mean, as much as, you know, when I opened that first store after buying the company a year later and with everybody, all the people who are still on my board and I still deeply appreciate their opinions, they were all telling me not to do this. And I knew I had to do it. Just my gut told me, you know, we did a business plan and we did all the numbers and the break even looked like it was going to be doable. But I always, my attorney, who's a great personal friend when you're signing a lease and at a certain level, it was going to go into percentage rent. He made a comment to me, well, if you do that kind of business, you'll be happy to pay percentage rent. And I was thinking, wow, he doesn't have a lot of faith in what I'm doing here. But let me just tell you, we exceeded that number threefold after about three years of being open. So it gave me a lot of confidence that I did the right thing. And it's not that I don't listen to their advice today. I listen to their advice all the time. And nine times out of ten, I take it. But this one, that first leap, I really, I had to search deep and I did it.

And this was the Rolex expansion, is that right?

Right, right. The expansion onto Rodeo Drive, which was very expensive. I mean, I was signing a lease that was, you know, greatly expensive building. You know, it was a small store. The first one was small, but still was going to be a lot of money to build and, you know, just had to happen.

That's great. Well, Tom, I mean, there's just some real gems here and the adaptation and, and, you know, embracing tradition and getting through Covid and everything. And I really appreciate you coming on the show and, you know, sharing your story today. What's the best way for our listeners to connect with you and to learn more about Geary's?

Well, our website, Gary's.com and there is. You can. If they have any questions, there's an email link on the website that goes to our customer service being forwarded to me.

That's great. Well, you know, again, congratulations. Making it through, keeping that, you know, that stable part of the community going and that business that. I have no idea how you do it, but I'm totally impressed that you're still here and I've really enjoyed talking with you today. You know, come back from time to time and let us know how things are going.

Well, thanks for having me, Shannon. Dave. Appreciate it.

Man, what a. What a kind guy. I mean, he's really thoughtful. You know, here he is running this big company, but, and I think it. I mean, it's who he is, but coming from it being a family business and now again, being. I mean, I guess it's always been a family business. It just wasn't always his family. But, you know, he sees it that way. He. It's clear he treats all the people that work there and even his customers as part of this extended family that he is the steward of, if you will.

Good point. Yeah, that, that word, I would agree. Steward. Because the more I learned about Geary's and Tom and everything, that. That's the word, you know, because it is this kind of storied brand down the. In Southern California, and they've. They've kind of protected it, but at the same time, they're just, you know, just like every small business, they're just making changes all the time, maybe behind the scenes or how they do things, and they're adapting. And it impresses me, especially since if you go to their website, the. The things they sell are incredible. You know, things that I look and go, wow, how does that business work?

Yeah. Right.

So I love getting a little piece of it today on the show, and there's a lot of great lessons there for all of us.

I agree yeah, no, it's fantastic. And really, you know, somebody, we talk to a lot of small business owners and, and to talk to someone that's, you know, on that next notch up from small business and hear how thoughtful he, he still is about his business. I mean, he, he, he's not running a small business, but he very much treats it like a small business in terms of just, you know, his thought process or at least the way I would like to see a small business treated. Of course, there's some small businesses that aren't treated nearly that well, so, you know how it goes. But, yeah, fantastic. Yeah. Really? Yeah.

Wonderful.

Great stuff.

So we, you know, we hope you enjoyed the interview with Tom. We'll put the links to Gary's and everything in the show notes. I encourage you to learn about the business. It's fascinating.

He said something come in like it's our first day in business. Every day I come. He says he comes in like it's our first day in business every day. That's a lesson every single one of us should take home.

That's difficult after 20 plus years.

Yeah, yeah.

As a president, even longer just working there. So being excited to come in and, and I, I think that I got the sense I could hear an. His voice like, you know, when the pandemic hit and everything else, it was just one more challenge for him to figure out that's right, his, his team and everything. So he just looked at, looks at things the right way. We talk about story and how you frame things and, you know, he's got the right framework on it to succeed. Clearly.

Totally. Totally. Yeah. No, it's great stuff. Yeah. Very glad to talk to him. Yeah, for sure. All right, folks, well, well, you know what to do. Send us your questions, thoughts, anything you want. You want some business therapy, whatever it is. Feedbackusinessshow Co and go to businessshow Co. Reviews. Leave us a review, please. It really makes a big difference. We love it. So thanks for hanging out and keep leaving that. Keep leaving. Keep living that charmed life. Don't leave the charmed life. Live that charmed life. See you next week.