Stage Stores as developed a strong foundation among its distribution team that will allow the company to continue to grow.
By Janice Hoppe
As the retail industry continues to respond to online shopping and consumer demand for expedited delivery, Stage Stores has prepared its distribution centers to adapt and prepare for further growth. “I have always believed that if I provided the tools people needed to do their jobs, placed them in the ‘right’ jobs to fit their skill set and provided continuing stimulation to improve personally that the results would take care of themselves – and they have,” says Gough Grubbs, the recently retired senior vice president of distribution and logistics.
The Houston-based retailer was founded as a family owned business in the 1920s under the brand names Palais Royal and Bealls. In 1988, Three Bealls Brothers merged with Palais Royal to form Specialty Retailers Inc. The private company in 1992 acquired Fashion Bar of Denver, a 76-store retail chain that featured a juniors’ chain called Stage.
In 1996, the company went public under the name of Stage Stores Inc. It has since acquired a number of brands and grown from 235 stores in 13 states in 1996 to about 850 stores in 40 states today.
The company started with one distribution center in Jacksonville, Texas, and has added two more centers in Ohio and Virginia to accommodate its growth. “Since we opened the third distribution center in 2008, that was the last time we had to hire any leadership talent from the outside,” Grubbs notes. “All our growth and leadership has come from inside and I don’t think too many people can say that.”
Developing a Culture
“I believe there is a huge difference between training mangers and training leaders,” Grubbs says. “We put a lot of focus on leadership. Distribution by nature deals with adapting to changing circumstances, and if people don’t understand the objective it’s hard for them to make a judgment on the fly.”
When Grubbs came to Stage Stores a little more than 20 years ago, he was tasked with redeveloping a culture among the distribution team that would lead to camaraderie and a greater passion for the job. He was successful and able to blend and establish that same culture at the new distribution center in Virginia when Stage Stores acquired East Coast retailer Peebles. When the third distribution center opened in 2008, Grubbs built the facility and culture there from the ground up.
“There are not many people who get a chance to do all those things,” Grubbs notes. “Someone could call any one of our distribution centers and they would get the same answer because I’m confident everyone is on the same page, understands the mission and the targets, and they can make judgment calls on their own.”
Stage Stores’ distribution center lives by four core values. The first value is focused on communicating in all directions – down to the distribution line, laterally because there is a lot of hand-off and up to the team’s superiors. The second value is having the right person in the right job. “We need to be able to interpret what we see as their skill set and put them in a job where they have the greatest chance of success,” he says. “They will be happy in their job.”
The third core value is to do the right thing. “Sometimes there’s not a book, manual or set of policies that give you all the answers,” Grubbs says. “If they do the right thing, the chances of them making a bad error is pretty remote.”
Finally, the fourth core value is to have fun at work. “I really believe that’s the key,” Grubbs says. “You can get people to do the bare minimum by forcing them, but the way you get the most out of them is if they enjoy what they do. They apply themselves more, put in more hours and go above and beyond if they are having a good time. Having fun is interpreted as they feel rewarded, they are fulfilling a purpose that is greater than themselves and they can see the results.”
In addition to living the four core values, Stage Stores also offers training classes that have taken the form of a company book club. “We found books that we felt were addressing problems we were having or places we needed to focus and everyone would read those books, discuss what we read and try to apply it to our own work,” Grubbs explains. “Book learning is great, but until you apply it, it doesn’t take root.”
Applying what they have learned and seeing results from it has energized Stage Stores employees to integrate those practices into their behavior. “The book club has taken on a life of its own and people were coming up to me telling me about a book I had to read,” Grubbs remembers. “It energizes them and they can see their own behavior change, and the results that follow.”
Developing a leadership culture among its distribution team has resulted in efficiencies, but Stage Stores also sees an increase in productivity by implementing the latest technology. “Technology presents opportunity for efficiencies and we have a board that has been very receptive to those recommendations and funded a lot of the automation we have installed,” Grubbs notes. “People in our organization have become expectant of change. It’s not are we going to change things, but what are we going to change this year?”
As the millennial generation moves into the workforce, Grubbs says the company stays at the forefront of technology to meet the demand for change. “Today, if you don’t change something every 90 or so days they get bored,” he says. “If you are not adding the technologies reasonably often, you are going to pay a severe price one day to catch up. Our team is very receptive to changes.”
For its size, Stage Stores has a large amount of automation in all of its distribution centers, but Grubbs says it has paid off. “Occasionally we will have a family night with cookies and punch and our employees bring their families to show them what they do,” he explains. “It’s incredible the turnout because they feel a sense of pride working in a place that’s advanced. People talk about our highly automated distribution center and it helps get people come to work there.”
The need for automation has increased because of online shopping patterns and consumer demand to get product faster. To ensure it meets the demands of its customers, Stage Stores focuses on developing relationships and innovative partnerships with its suppliers. For example, Orbis Corp. is the company’s primary supplier for its recyclable, hinged, plastic totes.
“The use of these totes to ship to our stores has not only saved Stage millions of dollars in corrugated boxes, but also the payroll required to erect them,” Grubbs explains. “They also manufactured a plastic ‘slave board’ to replace the wooden board we were using to move pallet-loads of product around the distribution center.”
Moving forward, Stage Stores will continue to focus on acquisitions while adapting to its customers’ new demands. “There is constant pressure to be more accurate and timely in our ability to respond to that order,” Grubbs says. “I left behind a legacy and something that has a life of its own with the distribution team. They aren’t replacing me because the worst thing Stage Stores could do is have someone from the outside come in and mess up the culture. They just need to make sure the team has the tools they need and let them do what they already know.”