Question

The Container Store Group Inc

International Directory of Company Histories

Company Perspectives

We are the original storage and organization specialty retailer and the only national retailer solely devoted to the category. Our goal is to help provide order to an increasingly busy and chaotic world. We provide creative, multifunctional, customizable storage and organization solutions that help our customers save time, save space and improve the quality of their lives.

The Texas-based The Container Store Group Inc. is a leading specialty retailer of storage and organization products. The company claims to be the only U.S. retailer devoted exclusively to storage and organization specialty products. The Container Store's operations include TCS, which encompasses 63 stores in 22 states and the District of Columbia, along with the company's website and call center. In addition, The Container Store also owns Elfa, a designer and manufacturer of component-based shelving and drawer systems.

A New Concept

Garrett Boone and Kip Tindell decided to go into business together while working in a paint department at the department store Montgomery Ward. The entrepreneurs initially hoped to open a custom-made furniture store. However, when they tried to get a lease at Olla Podrida, a craft mall in northern Dallas, Texas, their business plan was rejected. Management believed that their furniture store was too similar to a woodworking store already in the mall.

Shortly after, Boone and Tindell noticed stackable AkroBins at a trade show. According to the Fort Worth Star-Telegram, the two men looked at the bins and sensed a potential business opportunity in the storage solutions market. Boone and Tindell knew that busy people needed more time and that having a place to keep things saved time.

The men decided to open a home organization product store. However, this idea was not easy to implement. At that time organizational products were sold only for commercial use. Boone and Tindell had to persuade each manufacturer to sell products to them so they could in turn sell the products to the general public. Eventually, Boone and Tindell succeeded. The duo opened their first store in Dallas in 1978.

Early Expansion

The first Container Store was a big hit. Boone and Tindell coupled a unique strategy of offering a wide selection of products with outstanding customer service. They amazed customers by offering many different products. Employees at The Container Store were trained to solve problems so that they could better help customers with organizational concerns.

Boone and Tindell implemented their business philosophy in their personal lives. Boone, who has been described as being "quite tidy," lived in a house full of Elfa shelves and had a Skandia, the company's modular wood shelf product, in every room. According to the Fort Worth Star-Telegram, Boone's belief was that psychological organization equaled time savings.

The Container Store succeeded in boosting sales during the holiday season. This was typically a slow time for home organizational product sales. The company offered a host of packaging products in addition to ribbons and wrap.

Rapid Growth

After carefully evaluating locations, The Container Store opened other stores in Texas and by 1989 had grown to include seven sites. In 1990 the company opened its first out-of-state store, in Atlanta, Georgia. That same year it opened another store in Texas. In time, The Container Store expanded into California, Colorado, and Illinois.

Although the company grew quickly, company leaders thoroughly researched an area before opening a store. Steps were taken to ensure that the demographics matched the company's typical customer profile. In general, the company opened stores in areas where the average annual household income was at least $50,000. Boone and Tindell believed that the company's careful selection of location contributed to its success.

In 1999 the company opened its first store in Florida. Located in Miami, the store spanned 25,000 square feet and was stocked with typical Container Store offerings. Preparations then began for the opening of the company's 22nd store, in White Plains, New York.

Recognition and Elfa

In 1999 The Container Store entered Fortune magazine's survey for "100 Best Companies to Work for in America" and placed first. Fortuneacknowledged the company's in-depth employee training program of more than 180 hours, the company's above-average wages, and the sabbaticals it offered employees who had been with the company for 10 or more years. The Container Store was also praised for having exceptional communication between managers and employees. Managers typically shared daily sales reports with employees, so everyone was aware of how and what the company was doing.

Management noted that the company's philosophy regarding employees was simple: It promised to treat its staff like human beings. In return, managers asked the staff to focus on being flexible and going beyond their regular job to help other workers and customers. Management also followed this practice. Even Boone and Tindell were occasionally seen unloading trucks and helping customers.

The company's fair management practices created an incredibly loyal staff. In 1999 The Container Store had an employee turnover of only 25 percent, far below the industry average of 73.6 percent. The company's turnover for managers was only 5.3 percent, substantially lower than the industry average of 33.6 percent. Also in 1999 The Container Store received the Retail Innovations Award from the National Retail Federation. Leonard Berry, an expert on customer service, included The Container Store in his book Discovering the Soul of Service (1999). Berry's book profiles 14 companies with exceptional customer service.

In May 1999 The Container Store purchased Elfa International, a European manufacturer of wire drawer and shelving systems. The acquisition included Elfa International in Denmark, Finland, France, Germany, Holland, Norway, and Sweden, along with working capital and brand names. Prior to the acquisition, The Container Store was the North American distributor for Elfa, which had been its best-selling product since the company's inception in 1978.

Clustering in 2000

Around the turn of the century The Container Store executives believed that malls were declining in popularity and that people would rather shop at a cluster of specialty stores. The company began "clustering" its stores with other stores in the same category. It announced plans to open stores near Crate & Barrel locations in Chicago, Dallas, and other cities. Crate & Barrel was a popular home furnishings store that sold quality-made casual furniture, bakeware, and cookware. Crate & Barrel products complemented The Container Store's products, and the two companies believed they could attract more customers if their freestanding stores were located side by side.

In 1999 The Container Store generated sales of $160 million. By 2000 the company faced growing competition, however, from home improvement stores, discount stores, and even grocery stores selling organizational products. The Container Store continued growing, establishing a second location in Houston, Texas, after a five-year search. Two years later a two-story location opened in downtown San Francisco, California.

In late 2002 the company leased a new 1-million-square-foot headquarters and distribution facility in Texas. Initially, The Container Store utilized only 650,000 square feet of the new complex, 75,000 square feet of which was devoted to office space. By 2003 The Container Store continued to focus on establishing new locations on the East Coast and the West Coast. The company's first store in New York City opened in November 2003 in the Chelsea district.

By the middle of the decade, The Container Store was experiencing annual growth of approximately 25 percent. In 2004 the company's retail network included 32 locations. The following year a gift card line was introduced in partnership with Stored Value Systems, a company based in Brentwood, Tennessee.

Continued Coastal Growth

More growth took place in New York City in early 2006, when The Container Store established a second retail site at 58th Street and Lexington Avenue. The location offered customers the ability to shop with a device called GoShop, with which they scanned merchandise instead of picking actual goods. At the end of their shopping experience, store personnel shipped merchandise to any address in the city for a $15 fee. The company's coastal strategy was furthered with the establishment of a Los Angeles store in 2006 at Century Park West and Santa Monica Boulevard.

By 2007 The Container Store had received "100 Best Companies to Work For" honors for eight consecutive years. In addition to New York, San Francisco, and Los Angeles, its chain of 39 locations had grown to include other metropolitan markets, including Boston, Chicago, and Washington, D.C. A major development took place that year when the private equity firm Leonard Green & Partners, based in Los Angeles, acquired the majority of The Container Store's stock, providing the company with the funding needed for long-term growth.

The Container Store continued under the leadership of Tindell, and sales reached $650 million in 2010. The company continued growing at a compound annual rate of 24 percent, a pace it had maintained since its founding in 1978. By mid-2012 The Container Store's network of stores had swelled to 54 locations nationwide. To accommodate additional growth, the company began an initiative to expand its distribution center from 720,000 square feet to 870,000 square feet.

Going Public

By 2012 more consumers were visiting The Container Store's website using mobile devices. That year mobile traffic increased 62 percent. To improve mobile experiences for consumers, the company partnered with the mobile technology company Usablenet to develop a new mobile site.

A major development took place on November 1, 2013, when The Container Store went public and began trading on the New York Stock Exchange. The company experienced strong demand for its stock. Initially priced at $18, shares quickly soared to $36.20, and the initial public offering generated $225 million. Investors were excited about the company's goal to increase the size of its retail network from 62 locations to 300. Moving forward, The Container Store appeared to be positioned for growth.

This case is about the history and culture of The Container Store, “the original storage and organization specialty retailer.”

Answer the following questions: Describe The Container Store’s (TCS) mission. TCS has continuously been recognized as one of the best companies to work for, and in Inc.’s recent ranking of The World’s 10 Top CEOs, TCS’s CEO, Melissa Reiff, made the list at number eight. Based on the reading, why is TCS receiving such positive recognition?

Answer 1

Their missions help social and business community to fulfil their core goals and aspirations. As per given text based on TCS context , we can say that its offer of  creative, multi-functional, customizable storage and organization solutions that help its customers save time, save space and improve the quality of their lives. Ultimately, it is one of the best missions which show its existence for socially desired needs fulfillment.

Based on reading, we can say that the following are the main points for its positive recognition:

1) A new concept in commercial markets as well as public domain

2) Only U.S. retailer devoted exclusively to storage and organization specialty products.

3) Early expansion and rapid sales growth laid it to abnormal profit in long run business operations

4) Best workplace policies which includes career development and sound pay and progression schemes

5) Its owned business named Elfa, which offers creative and innovative   designing and manufacture of component-based shelving and drawer systems.

6) Focused on client based design and product offerings

7) Committed to rapid growth in US and related markets