Question: What was the need The Container Store set out to meet?
Kip Tindell: It’s interesting; you asked what was the problem? What was the need because we’re joyful about the fact that we’re the rare solutions-based retailer as opposed to an items-based retailer? We want you to come in and say, you know, my closet is driving me absolutely crazy. I have to do something. Or my kids’ toy storage area is just – can you help me? And that’s what we’re all about. I mean, it’s storage and organization. The Container Store, everything to organize your life. Organization is more and more important as we all have not only less and less space, but even more importantly, less time. And so we created – these are big 25,000, 30,000 square foot stores filled with everything imaginable to organize your kitchen, your pantry, your office, but really your life; saving space, keep things organized and ultimately save you time. And I think of all the commodities that one can be selling, time may be the very best. So there’s a Zen quality to being organized, to saving time. Even in the way that you pack your luggage on a trip.
And you know, we started with one tiny little store in Dallas, Texas in 1978 and well, I like to joke, but that was my dad, but it really was me. And $35,000, you know, not much capital at all to start with, even in 1978. And we’ve grown a little over 25% a year since inception. In fact, our compounded annual growth rate is still 26%, 27%. Not helped by this great recession, but we’re back to a strong 11% or 12% sales gains now, which is delightful after going through single digit declines during the recession.
Question: What is a solutions-oriented business?
Kip Tindell: Well solutions-based just means that there’s extraordinary service. No one had ever done a store devoted to storage and organization. It truly is an original concept. We were excited by that, but it was all really driven by the product. We got so excited about these storage and organization products. Most of which were commercial or industrial in nature. Nobody had ever done this for consumers, but businesses were kind of aware of the need to save space and time, so we would take products that were usually never been sold retail before from the commercial or industrial areas and you would wind up with some really exciting things. These egg collection baskets that were really designed to collect eggs, you know, chicken eggs, and we would use those as a gardening organizing tool or leaf burning bins that were designed to burn leaves in and that became something that you would store swimming pool toys and apparatus in. It was the most unusual collection of products that I think had ever been put together in a little 1,600 square foot store.
And when people saw them, they went nuts. And when we saw them we went nuts. And so the product actually drove the concept. We were thinking about furniture at one point and we said, “Oh no, this functional stuff that saves you time and space, that’s a neat idea. Let’s do that.” And it was such a great relief that we were so busy after the second or third week that we missed that whole entrepreneurial terror of if we were going to make it or not. We knew this thing was going to be successful right off the bat.
When you hear a great song for the first time, you go, “I bet as soon as they recorded that they knew they had a hit on their hands.” We were very fortunate by the second or third week that the store was so crowded that we said, “Ah-ha, this is what we thought would happen.”