California Closets

Marty Allen speaking to franchisees at California ClosetsIn 1990, Williams-Sonoma purchased California Closet Company, then based in Los Angeles, California.
Shortly thereafter, Howard Lester, the CEO of Williams-Sonoma hired Marty to become its President in 1991.

As soon as Marty took control, he realized that the company was about to post its first financial loss; one of more than three million dollars, which caught its owners off-guard.

Marty was now immersed in a full-scale turnaround. The first thing he did was to move the corporate office from Los Angeles
to San Francisco, right next to its parent company, Williams-Sonoma.

Over the next two years, Marty rebuilt the company and returned it to profitability and record sales. He achieved these results by restructuring the entire management team, focusing on customer service at every level of the company, discontinuing all non-profitable operations, and teaching and training the franchise owners how to be better business owners and make more money. Marty’s logic was simple, but unique to franchises; the smarter they are, the more money they will make and the more money we will make.

California Closets Example
Marty brought innovation to the company by rounding the corners on the shelves and drawers, and brought in several new colors creating a warmer effect.

Pocket Power
In early 1993, at a management retreat, Allen and his staff developed a new concept in franchise team building called Pocket Power. Designed to build better communications and exchange ideas between franchisees and corporate staff, Pocket Power helped to stimulate the company, which in turn brought record sales and profits. Just as importantly, Pocket Power encouraged the franchise owners to work together toward common goals, something rare in a franchise operation.

Once the franchises knew that California Closets and Marty was invested in their future and cared about each one of them as business owners, the floodgates opened. Marty developed new product lines, such as custom home offices, complete garage storage units, and custom imported cabinets from Brazil. As sales increased, so did the amount of innovation.

To further increase profitability, Marty began making many of the components used in the manufacturing process in several factories across the country, and shipping them directly to the franchises and company stores. This reduced the waste generated by each individual operator, and moved the company to a “JIT (just in time) inventory process.

At the same time Marty was growing sales through his franchises and company owned operations, he aggressively sold new franchises. In addition to selling standard franchises, Marty developed a “mini concept”, selling smaller units in less densely populated sections of the country and began selling master franchises internationally.

Exit Plan
In 1995, with everything running smoothly and sales and profits increasing year over year, Marty wanted a new challenge. Williams-Sonoma decided that if Marty wanted to move on, they would rather sell than risk the future with a new management team. So, with Marty’s help, an exit plan was created and the company was sold, creating a great return for Williams-Sonoma.

“Marty is one of the most creative and energetic leaders that I have run across. I wish I could bottle his enthusiasm and give it to our entire management team.

He inherited a very difficult turnaround when we put him in charge of California Closets, but under his leadership he took the company to new levels and completed a remarkable turnaround. This ultimately allowed us to position the company for a profitable sale.”

Howard Lester CEO

“Marty is a genius at managing people. He can take a ragtag group and turn them into the finest team imaginable. He can get his team to move mountains. I’ve witnessed it firsthand.”

Kent Larson – Former President/COO