Rite Rug Celebrates 75th Anniversary Article Number : 4588

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Date	6/22/2009 7:40:04 AM
Written By	LGM & Associates Technical Flooring Services
View this article at:	//floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4588
Abstract	The year was 1934 when brothers Duke and Stanley Goldberg opened a corner store in downtown Columbus, Ohio, selling carpet and used rugs. Much has changed since then, but the principles on which the company was founded have not wavered: provide the best price, service and integrity. Today, Rite Rug is a diversified $80 million business with...
Article	The year was 1934 when brothers Duke and Stanley Goldberg opened a corner store in downtown Columbus, Ohio, selling carpet and used rugs. Much has changed since then, but the principles on which the company was founded have not wavered: provide the best price, service and integrity. Today, Rite Rug is a diversified $80 million business with 25 locations and among the 10 largest flooring retailers in the U.S. Ninety-nine percent of American businesses disappear within 75 years of their founding (Cardozo and Borchert 2002). What sets the other 1% apart? In the case of Rite Rug, the Columbus, Ohio, flooring retailer that celebrates its diamond anniversary this year, the answer is staying true to the principles on which the company was founded and still operates: honesty, ethics, fair price, wide selection of good products and customer satisfaction. Add to that strong leadership and smart business decisions, and you have a formula for success and longevity. The Rite Rug story began in 1934, when brothers Duke and Stanley Goldberg opened a corner store in downtown Columbus. Duke’s son, Michael, entered the business in 1962 at age 15, eventually taking the reins upon Duke’s death in 1989. And the business has seen unprecedented growth ever since, navigating through economic booms and recessions. “Duke and Stanley laid it out,” Michael said. “It’s pretty simple. They were honest, honorable and worked hard. They taught me everything I know. They also taught me to never take anything for granted. I had to earn their respect every day.” Because Duke and Stanley were “Depression kids,” they developed certain values that became the hallmark of Rite Rug. “They believed in buying low and selling low,” Michael Goldberg said. “They tried to give the customer the best deal they could. And my dad imparted that on me. I don’t think it’s any more complicated than that.” Giving the consumer the best deal means more in today’s world than ever before, he said. But the “best deal” is just the beginning. “It’s price, it’s service, it’s delivery. You can’t give the customer a low price and give her [crap] on top.” While many flooring retailers strive to give their customers the lowest price, Rite Rug is one of a handful that consistently delivers. And exceptional customer service is the cherry on top. And Rite Rug makes money. How does it succeed where others fail? Many ways. 1. First and foremost, Rite Rug shops the market to find products that represents the best value for a particular price point. “We sift through everything,” Goldberg said. “That’s our job for our customer, whether it be in builder, retail or commercial. It’s not about having dinner with someone and letting him put his product on your floor. If we are going to offer a builder a piece of carpet for $9 a yard, it better be the best product for $9 a yard no matter who the manufacturer is. It is our name that is on every sale.” 2. Rite Rug is consistently reinvesting in the business. “If you make $50,000 and take $49,887 out of the business, what have you done?,” Goldberg asked. “So one of the things we have done is put our money back in our business. For example, we stock a lot of inventory. If you can buy a roll vs. a cut, that helps keep prices down.” 3. Rite Rug is well capitalized. “If you have money you can afford to do things,” Goldberg said. “It allows you to pay your bills on time. If you pay on time, you get your cash discount. And when you pay on time the mills respect you more.” 4. Rite Rug is strong at the negotiating table and then stands by its word. “I’m 61 years old and have been watching my father do it or doing it myself for 41 years,” Goldberg said. “I think I’ve learned things. I’ve learned we’re a big company. I’ve learned money talks and BS walks. I’ve learned there are a lot of people to buy from and a lot of products to buy. I’ve become more perceptive. Everyone we deal with is different. The one constant is everyone is looking for a commitment. If you give someone a commitment, you better live up to it. That’s how you can get a commitment from the other side. You don’t get anything without commitment.” To say Rite Rug has evolved over time is an understatement. It has grown in every way imaginable: organically, geographically and through diversification. The company now does business in Dayton, Cincinnati and Cleveland, Ohio; Louisville and Lexington, Ky., and Indianapolis. It has also expanded from its retail roots into new construction, commercial, property management, floor care/maintenance, on-site hardwood staining and refinishing, window treatments, and the Michael David Design Center, Realtor Direct and Trade Professionals Wholesale divisions. Of course, Rite Rug has been successful for 75 years because it excels at the fundamentals of retail, the blocking and tackling if you will. It starts with a massive advertising investment to get the customer in the door. Rite Rug uses a combination of TV and print with a smattering of radio and direct mail. The ads stay true to the Rite Rug mission: that it guarantees the lowest prices and has been around for 75 years. “Our store is our brand,” Goldberg said. “Anything that lasts that long you can have faith in. We are part of the community. We are going to be here tomorrow. We like to pound our name to stay first and foremost in customers’ minds, so when it comes time for them to make a flooring purchase, we are top of mind awareness.” Next is selection. “You need to give the customer a broad selection so she can eliminate things without being confused and then feel as though she had a good experience with the process.” It continues with customer service, which begins and ends with the employees. “The ultimate goal is the satisfaction of the customer,” Goldberg said. “Customer service is a function of the employees. We made adecision that we can’t accept employees who can’t make the customer happy. Those who do are rewarded; those who don’t are gone.” Erin Appleman, a vice president with the company, agreed. “Your people have to want the company to be successful. Through hard work and believing in the work you do, it is easy to be driven toward success personally and on a company level.” Customer service also means being honest. “We do not cut corners. We are straight up. If we tell a customer she is getting a particular carpet, that’s what she gets. We have no unresolved issues with customers. I want to be proud of my business.” But probably the greatest attribute contributing to Rite Rug’s longevity is how it continues to evolve and improve every day. “If you took a snapshot of the company five years ago and today, we are totally different,” Goldberg said. “How are we different? Our buying, selling, corporate consciousness and awareness are better. As an example, over the last five years I have allowed the mills to go to the respective divisional vice presidents, rather than having them go to me. If it’s a builder product line, they go to my son Mickey. And he makes most of the decisions on what we buy. The vice presidents understand their markets better than I can, so they can buy better products. “How else are we better? In our builder division we have inspectors that pre- and post-inspect. Now those people inspect retail jobs. And for the purpose of customer service, the divisions work more as a team as opposed to individually. We get better by sitting down and talking as a group and coming up with the solutions.” But it’s Goldberg’s competitive spirit that continues to drive Rite Rug. “Being competitive is key to our culture. We have a drive to sell every single customer. We are never satisfied with our buying, service, selling, systems, marketing and advertising. We know we can get better at everything. Lots of people want to be the best, but most just talk the talk. You have to have good people to be the best.” Goldberg summed it up: “We’ve had our ups and downs, but we’ve been here 75 years. So at the end of the day we must be doing something right.”