While compiling the article, “Family Ties: Craft businesses pass their torch from generation to generation,” which appears in CHA’s magazine, Craft Industry Today (Fall 2012, Vol. 1, No.3) we were fascinated by the amount of family-owned companies, each with their own unique stories, within our industry. In the upcoming weeks we will be expanding on this article and sharing CHA member stories on our Blog. In the coming weeks we’ll be featuring stories from the following members and more: Dee’s Delights and Beacon Adhesives.
By Mike Hartnett
Hobby Lobby is one of the most remarkable success stories in American business – and it’s remarkable in many ways.
Hobby Lobby started as an outgrowth of Greco Products, a miniature picture frame company founded in a garage by David Green in 1970. David’s sons, Mart and Steve, began gluing frames together for seven cents per frame when they were nine and seven.
Hobby Lobby officially began operation on August 3, 1972. Size of the store? 300 square feet of retail space.
Today there are 514 stores from coast to coast, averaging 55,000 square feet and selling more than 65,000 craft and home décor products. Other divisions include Crafts Etc., the wholesale division; Mardel, a chain of Christian bookstores; and Hemispheres, a chain of high-end home décor stores. As a result, Forbes magazine has included David on its Forbes 400 list of the richest Americans since 2004.
The growth is attributable in part to his loyal employees, who have good reason to be loyal. Three years ago, at the depth of the recession when the unemployment rate was skyrocketing, Hobby Lobby raised the starting minimum wage, which was already higher than the federally mandated level. The company has increased the starting minimum wage $1/hour four years in a row. The company also built an extensive medical clinic for employees at the headquarters in Oklahoma City.
The family has strong religious beliefs, and they put their money where their mouth is. The company probably loses millions in sales because the stores are closed on Sundays. Each Christmas and Easter, Hobby Lobby takes out a full-page ad in the major newspaper of each town with a Hobby Lobby store. The ads have a religious theme, not the typical “50% Off!” ads that are so common for retail advertisements.
Half of all pre-tax earnings are given to a variety of evangelical causes. The list of donations is almost endless; Forbes estimates David has donated “upwards of $500 million,” including property to help the late Rev. Jerry Fallwell, and tens of millions to save the almost-bankrupt Oral Roberts University, etc. The company is planning a national Bible museum to house the more than 44,000 religious artifacts that have been purchased and saved.
The ministry reaches around the world, too. The company has printed and distributed almost 1.4 billion copies of Gospel literature to more than 100 countries.
Hobby Lobby is remarkable in other ways, too: Despite it size, one of the largest privately owned company’s in the country, it is still a family-run business. Mart, David’s oldest son, is CEO of the Mardel Stores division, and Steve, David’s younger son, is President of Hobby Lobby. David’s daughter, Darsee Lett, is VP of Art/Creative Department overseeing approximately 70 artists and crafters. Stan Lett, David’s son-in-law, is VP for Manufacturing, International Dept., and Buyer Resources. Randy Green, David’s nephew, is head of the wholesale division, Crafts, Etc. And yes, David’s grandchildren are working there, too, or with the company’s numerous charitable and religious efforts.
A succession plan is in place. When David is gone, Hobby Lobby will operate as it has and to continue to donate to evangelical causes. The company has been set up as a managing trust with Green family members as the trustees to see that it remains true to its operating philosophy. If succeeding generations were to decide to sell the company, 90% of the proceeds will go to ministry causes – an incentive to not sell the company, but see that it continues to fulfill its purpose.
The current generation certainly can’t foresee Hobby Lobby being sold. Randy Green, David’s nephew and head of Hobby Lobby’s Crafts Etc. division, said, “We see Hobby Lobby as much more than just a business, but as a ministry that ultimately belongs to God, and as a family we are just stewards over it. If the company were ever sold and taken public, we would not be free to donate to and support various ministries at the level that we have done and continue to do.”
(Note: Forbes magazine recently profiled David. Read the article HERE. In 2004, when David made the Forbes 400 (richest Americans list), Hobby Lobby vendors were asked to explain the keys to the company’s success, given the fact that the stores are closed on Sunday, no fancy scanning equipment at the check-out counters, etc. Their answers are HERE.)