Cabana Home. Seamless style, inside and out
Kristine Ellis -- Casual Living, March 1, 2008
and wife Caroline
When Steve Thompson’s seventh grade math teacher called his mother to complain that he was drawing house plans during class, her first comment was to ask if the plans were any good. It was the right question. The seeds of his life’s work had already been sown; it was just a matter of how they would manifest.
Since then, Thompson’s talent for creating beautiful homes has grown into a variety of professional successes. The latest is Cabana Home, a home furnishings retail business that offers indoor and outdoor products for high-end customers.
Thompson and his wife, Caroline, opened the first Cabana Home location in Santa Barbara in May 2006. A second store opened in Mill Valley six months later, and a third is already under consideration.
“I have always wanted to have my own store, and my wife and I love working together. It’s a dream come true,” Thompson said.
The Thompsons opened Cabana Home after working and living in Dallas for 25 years. There, Steve was in real estate development and Caroline ran her own events planning business.
Indoor and outdoor product sales are evenly split at Cabana Home, which Thompson credits to a 'designer approach’.
Over the years the couple built or redesigned nearly 30 homes, several of which have been featured in national and regional shelter publications. They decided to open Cabana Home when building a home in Santa Barbara and not finding what they wanted locally.
It wasn’t a decision made lightly. The Thompsons spent a year planning the opening and more money than they care to admit.
“We fully intended to come into the business and be successful from day one, so our planning was very extensive,” Thompson said. “Fortunately, we had the resources from our last business to be able to do it in that manner.”
Part of that planning was hiring a leading publicist who helped them customize every detail of their look, told them what publications they needed to be in, even what charities they needed to support.
“She didn’t miss a trick,” Thompson said.
In fact, the launch was so successful, they were selling product before it was priced.
“During our opening night, party people wanted to buy when we had wanted them to have a drink and have fun. We didn’t expect them to buy then,” Thompson said. “Nothing had a price tag. It was horrible but a good horrible.”
The Cabana Home showrooms reflect the Thompsons’ designer influence. Floors are concrete, walls are white and ceilings are blacked out with spotlights.
Given the name of their business, Thompson expected the outdoor category would outsell indoor, but it has proved to be about a 50/50 split. Thompson credits their designer approach.
“I thought we’d do more outdoor than that, but it has evolved into people letting us do both outdoor and interior.” he said. “We’re not a patio store, we don’t sell matched sets. And when you start deviating from the norm, which is buying in sets, people rely on you more heavily, like they would with a designer.”
Within its half of the business, the outdoor category breaks down to 35% dining and 45% seating. Outdoor lighting sales are minimal, at less than 1%, while umbrella sales are under 2%. Accessory tables account for about 10%. In materials, synthetic woven is far and away the largest seller, followed by cast aluminum and wrought iron. Only about 10% of seating and 2% of dining is teak.
Outdoor fabric is proving to be a huge business at Cabana Home in and of itself, accounting for about 17% of outdoor sales.
“It grows daily. We are already seeing repeat business in outdoor fabrics. People try it first outdoors, then come back and ask if they can use it inside,” Thompson said, adding that although people tend to first balk at the price, they become sold on its value.
“We really have to sell it. It doesn’t sell itself,” Thompson said.
Thompson estimates 99% of the customers who walk into the Santa Barbara store buy. Located in a warehouse district, the destination store has gotten a lot of press and is well advertised, helping draw people who like to shop in out-of-the-way but trendy places. Customers tend to be wealthy and established, and most already have beautiful outdoor furnishings.
“We do a lot of fill in, working with what they have and adding what they need,” Thompson said.
The Mill Valley store in Marin County draws a younger customer who has money and a big home, but who is in need of furnishings for indoors and out. Their tastes tend to be more contemporary.
“We might show a sofa in Santa Barbara in a truly traditional style, whereas the Mill Valley will show a contemporary version of the same sofa,” Thompson said.
Outdoor merchandise is kept on the floor at both locations year-round. Nothing is ever marked down. Even damaged merchandise is donated rather than put on sale.
With the Mill Valley store located just 30 minutes from San Francisco, the Santa Barbara store in easy driving distance of Los Angeles and the many high-end markets in-between, the Thompsons shop far and wide for product.
In addition to Chicago, they attend markets in New York, Atlanta, High Point, L.A., San Francisco and Dallas, along with markets in Belgium, Italy and France. This spring they plan on going to China as well.
As a result, Thompson says, by the time a new product shows up in a shelter or even a trade magazine, it is often already on his floor.
Cabana Home’s highly trained employees, called associates, also help set the business apart, he said. All are on salary and are paid exceptionally well.
Part of their edge comes from the weekly training adjunct to the sales meeting. Thompson starts by going through stacks of magazines he receives to point out brands and pieces carried by the store. That is followed by a presentation by an associate about a vendor — when the company started, who owns it, what it is known for, why it is good, how it compares to other vendors and so on. Every associate participates at one time or another, including the delivery staff.
Customer service is another priority. The retailer keeps picture files for each customer that can be accessed by all the sales associates. As a result, even if the associate working with a customer is not available, any question the customer has can be quickly addressed.
Customers are always right at Cabana Home, even if they aren’t.
“We might decide not to do business with someone again, but we always solve whatever issue there is immediately,” he said.
In addition to lots of advertising, Thompson relies on special events to draw new customers. Last fall, for example, he brought in his outdoor vendors for a full day of events. Local interior designers were invited to a breakfast and preferred customers to lunch, giving them an opportunity to hear about the latest fabrics and furnishings. At 4 p.m., a high tea was served, giving the public a chance to do the same.
“The day cost me about $10,000 in catering, but it was well worth it. It was very effective,” Thompson said.
He also has been planning a fashion show to highlight the outdoor fabrics, and was surprised and excited to see a similar event presented by Casual Living at the Chicago market last fall.
“It was so well done.” he said. “Ours will include a runway with great music and great fashion. We’ll also have the furniture being strolled down the walkway some way.”
Honing on success
“I expect that we will always have just a few outdoor vendors.” Thompson said. “We have also been honing the price point as it turns out that we have a higher price-point customer than we expected. So we definitely have gone to the higher-end vendors. But we examine their product. It can’t be just a name without the quality.”
His biggest frustration with outdoor vendors in general is their lack of inventory stock.
“A lot of companies have no back stock,” he said. “They only order from their Chinese manufacturers once they have their market orders and they are carrying very lean inventories. In my opinion, their inventories are based on returns or cancelled orders and that makes it very tough for us mid-season if we find we need 10 more chaises say and we can’t get them.”
Thompson isn’t opposed to buying containers. In fact, last year he bought a container of a Schou dining chair to help sell higher priced tables.
“This year, we’ll probably order two containers. We sell a lot of those chairs,” he said.
Thompson started developing his retail skills early. He worked in a furniture store owned by a family friend from the seventh grade until he graduated from college. At that point, he started at Neiman Marcus where he met Caroline in the executive training program.
That was also where the couple met the people who would become their best friends and eventual business partners, Michael and Leisa Snyder. Although they hadn’t planned on opening a second store so soon, when Thompson learned that Michael was available, the Mill Valley store fell into place with the Snyders as managers.
For their third location, the Thompsons are looking south to markets that would draw from north and west L.A. However, Thompson’s concern at this point is more about maintaining the high standards and deep expertise he’s created for Cabana Home as the company grows.
“It isn’t about location as much as it is about having the merchandise and being able to withstand the inspection,” he said. “If you’ve got that, they will come.”