WOW LEADER

Peggy Traub

Interview by Stephanie Lowder

Harvard. It's really funny, my degree - which no longer exists, at least by that name - is in Near Eastern Languages and Civilization Studies. The Near East - known to the rest of the world as the Middle East. I spent my junior year in Israel. It was absolutely fantastically wonderful, with international students from all over the world speaking French, English and Hebrew interchangeably to each other. It was cultural, it was global.

I never wanted to be in retail, or so I thought because of my father's rather illustrious career (Traub's father is credited with "reinventing the American department store.") Nevertheless, I was intrigued by many stories and challenges my father shared with us around the dinner table. For instance, he'd have a new shop in the works and he'd ask us three children to suggest a name for the shop. We'd go to dinner and theatre and afterwards he'd need to pick up something from his office, so about 11 PM we'd go through Bloomingdale security and I'd go with him to the seventh floor. We'd walk through those dark departments - I'd always volunteer to join him--I thought it was very exciting.
 
After graduation, I didn't have a job. I didn't know what to do with myself; I was really at a loss. I definitely didn't want to go into retail, but I didn't know what to do. That year I went to work at Bloomingdale as a "Christmas Executive" at the Chestnut Hills store in Massachusetts, in home furnishings and apparel. I ran two Christmas shops, and was really surprised to find that I liked it. In January, I went to see the store manager and said, "I really loved my work, but I don't think I want a career in retailing. But can I stay here and work while I figure out what I am going to do?"  I was really conflicted; I was determined not to stay at Bloomies. 
He smiled, said yes, and a few months later, that store manager, who was a real mentor to me, said, "Peggy, if you leave now, you'll never know if you made a mistake," and suggested I enter the company's NYC training program. I'll never forget his last words. He said "Because of your last name, you'll have to work ten times harder than the next person."
 
So I accepted that challenge. Instead of leaving Bloomies, I moved to NY and entered their training program. My first job was assistant buyer in ladies swimwear. There I was on Bloomingdale's main floor pushing racks of ladies swimsuits around. It was so funny, such manual labor after my fancy education. I mean I loved the work, but it was so unexpected.

I know a lot more than anybody needs to know about men's inseams and men's waist sizes, because in my second year I managed men's sportswear at the White Plains branch. This was the first time I had a job managing with authority, the first time I ran my own business, and I loved it. I discovered my mentor had been absolutely right. This was the career I wanted.
 
There I was in my 30s running a $20 million business. I spent three years buying ladies hosiery, a very analytical business, all about sizes and quantities and numbers. During that time we launched Donna Karan hosiery which was a huge success, just huge, so I was lucky in that way. But this was another major turning point in my career. I had this huge success, but I felt I'd really missed an opportunity to travel internationally and develop a really interesting, creative product.

I was in Paris on a hosiery buying trip when I was offered a new job as Bloomies' Lamp Buyer, which I had to accept or decline that day. I accepted. One day I was buying hosiery in Paris with my luggage packed full of winter clothes, the next day I was in India as a lamp buyer in need of clothes to wear in a much warmer country.
 
In India I was totally overwhelmed. The business was vertical - a unique arrangement at retail, which certainly doesn't exist today. I would go to different countries to buy vases - India for brass, Thailand for wood carvings, China for porcelains, and I'd send them back to Queens to be made into lamps. Every week I'd give the people instructions on what to make - the shade, the height, the quantities, everything. It was like being a manufacturer. I would source parts all around the world, plan production, sell it back to myself at retail and be responsible for margins and retail sales. It was really hard; the first 6 months were really tough.
 
My biggest challenge as a leader came several years later when I accepted a promotion to a division merchandise manager. There I was back at retail, with 8 or 10 department managers reporting to me. This job was about managing people, rather than producing a product. I learned the importance of being positive and supportive.

The more you're willing to get your hands dirty yourself, the more people appreciate your leadership.

I finally left the company to work at Conrans Habitat as group merchandise manager in lighting and bath. New owners were trying a new approach to turn the company around, but we were saddled with expensive real estate problems and ran out of money. This was the first time since college that I didn't have an idea about what to do with my career. I couldn't decide what to do - go into management, retail, what?

So I was walking through a Wal-Mart in Salt Lake City, during a ski vacation with family. I was walking through the store with my father, and we were commenting on the operation. I thought there was a very impressive hosiery department, but I didn't think the lighting products were well chosen or presented.  My father said, "Why don't you do something about it?"

I said, "What can I do about it? I'd have to have my own lighting company to do anything about it."  As we were walking out of the store he said, "Opportunities don't fall into your lap. You have to make them happen."
 
I didn't want my own company, I didn't want to be an entrepreneur. But I began to think about this market niche opportunity. I became convinced that someone should be able to produce affordable contemporary lighting; and I thought I could maybe do it, but I'd need a business partner since I didn't know manufacturing and design. I began to try to come up with the very best person I knew in sales and product development, and that was Lee Schaak, who had been a supplier

We'd never had a meal together, I didn't know him personally, but I knew he was the best. So I called and said I have to meet you as soon as possible. He was about to travel for a month, so he said, "I can't"... "I can't"... Finally I said, "How about breakfast?"
 
I told him I had a really crazy idea to design, manufacture, and wholesale contemporary affordable lighting. I said "I know it's really a long shot, and you're traveling for a month and don't have time, but think about it, I think there's really a fantastic opportunity." In June 1994 we shook hands, and in August made our first trip to Taiwan. We didn't even have a business plan, we didn't have an accountant or office space, but we developed 18 skus and started begging High Point for showroom space.
 
Asking in September for High Point showroom space in October? It wasn't going to happen. But two weeks later Ann Richards at Market Square gave us 200 square feet of open space between lanes of traffic in a hallway.
So Lee goes to Lowe's and buys extension cords and light bulbs, strings up the electrical to hook up our lamps, finds thrown away pedestals in the hallway to display our skus, gets two thrown away chairs for us to sit on, and hand-letters a big cardboard sign with our name on it.

Thursday morning comes. We had no ads, no announcements, no business cards, nothing. But a lot of people walking by knew us and were surprised to see what we were up to. We got a few orders, written on blank scraps of paper, and there you are.
 
Now 14 years later we have 30 fulltime employees in New York and Minneapolis, plus 50 independent sales reps, another 50-60 employees at our two independent warehouses, and many more at the factories in China and Taiwan manufacturing our goods.

Felix and Oscar, or the Academic and the Lamp Dude is how the NY Times labeled us. People think we're the most unlikely business partners. I like order and some structure so I handle operations, financing and marketing. Lee is not a slob like Oscar, but he always wears Hawaiian shirts, every day, Hawaiian shirts. He's unconventional, so talented and creative. We couldn't be more different, but we bring many things and very different things to the table, therefore we bring everything to the table.

Some of our top customers: Target - we're their number one supplier of portable lighting and we supply them other accent furniture. Wal-Mart, Bed, Bath & Beyond, Home Depot, Rooms to Go, American Furniture and many others. We work with furniture chains, catalog companies, Mom and Pop furniture and lighting stores in the U.S. plus a very nice business in Canada, some in Mexico and South America.
 
With China and Taiwan, we work as business partners. In our 10+ year relationship, we've established a level of trust and commitment. Lee travels to China every 10 weeks or so and really appreciates and respects the people he works with there. He even speaks pretty good Mandarin now. We make lots and lots of productions samples for our customers to consider. Where there's a problem, we try to address it with a level of understanding.
 
The fastest growing segment of retail in the U.S. and for us is eCommerce, drop shipping. Consumers place an order at the retail web site and we ship to the consumer directly. It's not easy, but it's important, it's really about customer service.

Customer Service is now as much or more about technology as it is about a friendly voice on the other end of a phone. Shoppers expect products almost immediately; customers expect shipping information almost as soon as we get the order.
 
Even bad business news is an interesting challenge.

At the beginning, I was working with a sea of men, some really great men. For all of my career most of the senior people I worked with were men. So one time I went to a CEO summit held by HFN magazine, and of the 50 or so CEOs there the only women were me, Jena Hall and one other. I was really struck at the lack of senior women in our industry.

Then I attended a cigar event Kim Wray hosted in High Point, and I met women with positions of authority - not necessarily all at the same level, but all in positions of authority. I began to think, wouldn't it be great if we could have some kind of more organized group? Kim and Jena and I met in a Manhattan diner for breakfast, and we all felt the women in our industry needed to support one another.
 
We sketched out on a napkin plans for what was to be WithIt - which was Kim's great name for the organization. Now it's more than ten years later, and I serve on the Board of Governors. I'm so impressed and delighted with the current board, their budgets, revenues, activities. And the Conferences are amazing. Sara Lyke has given so much direction and stability. I'm confident the organization is in a wonderful position to keep growing.

The Women Presidents Organization - I've been a member of one of the founding regional groups for 10 years, and in the Platinum group  (sic: annual sales of $10 million plus) since its inception. It's all about advancing your business by focusing on long term issues, exit strategies, HR subjects, networking and peer roundtables addressing a member's particular business challenge.
 
Getting to the point where you're working on your business, and not in your business- that's one of the key points I think we have all taken from the WPO. It's about developing a staff that can run the business without turning to you for everything. It's about trust. It's about working from the big picture viewpoint.
 
In a wooden box - that's my macabre exit strategy, which I think is really funny. Because I love what I do. I look forward to going into work tomorrow as much as I look forward to taking off next weekend. I find what I do exhilarating. And, I have a really dynamite team.
 
But my real passion is skiing. I enjoy hiking and biking in warm weather. But nothing - nothing - gets me more exhilarated than skiing through a foot of fresh, ungroomed, Utah powder. I guess if I had to retire I'd love to become a ski bum.
 
Peggy Traub Is President & CEO of Adesso Inc., and a co-founder of WithIt.