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Firing up a national chain of craft stores

Carla and James Froehler:
Firing up a national chain of craft stores

Some say nothing pays off more than hard-earned experience.
Carla and James Froehler, owners of People’s Pottery Inc., would agree.
Last month, thanks to their combined 30 years of retail experience, the Froehlers secured $17.4 million in financial backing from OnBank & Trust Co. and private investors. The funds will be used to roll out dozens of high-end American craft stores throughout the United States.
Any mall shopper probably has seen the Froehlers’ work before. James Froehler started consulting with the San Francisco Music Box Co. when it began with eight stores. It now has 179 permanent stores.
The Michigan-based Borders Books and Music Inc. became a client when it had only four stores to its name.
Locally, the husband-and-wife team are best known for their stint at World of Science Inc., where in five years they helped grow the company from a $2 million business to a $37 million retail chain. James Froehler was president and chief operating officer of World of Science from 1990 to 1996, and Carla Froehler held a vice president’s post from 1993 to 1995. At the same time, they continued their consulting work.
Now at People’s Pottery, the Froehlers envision store after store of handmade pottery, art glass, woodwork and jewelry, all made by American artisans, and believe this will be their best venture yet.
Retail chains are their specialty and malls are their domain. The Froehlers say they know their way around the best malls in the United States like the back of their hands.
“There is not a mall that I haven’t been to,” Carla Froehler says.
James Jenkins, an attorney at Harris, Beach & Wilcox LLP, recalls meeting with the Froehlers in the basement of their home to discuss the People’s Pottery acquisition plans. The Froehlers’ track record of success and their knowledge of industry is even more persuasive when you hear it directly from them, Jenkins says.
“The ability to convey the fact that you know what you’re doing” with enough confidence to elicit trust from investors is a rare skill, notes Jenkins, who has seen many more failures than successes in attempts to raise capital.
The Froehlers looked to private investors to back the acquisition of People’s Pottery from founder Robert Dein. This kind of “country-club financing is not an easy route to take,” Jenkins notes.
But success is something that seems to follow the Froehlers’ actions naturally.
With the help of more than $1 million in private equity financing and a “substantial personal investment,” they acquired People’s Pottery through the Froehlers’ newly formed private firm, CJF Holdings Inc., in the summer of 1996.
At that time the company had two stores, one in Ithaca and another in Syracuse’s Carousel Mall. By the end of 1996, two more stores had opened: in EastView Mall and in Albany.
Just in time for this year’s holiday season, eight permanent stores and four seasonal locations will be open for gift shoppers.
In 1998, the Froehlers expect to launch 20 more locations east of the Mississippi. And by 2002, they expect the company to boast 72 permanent and 100 seasonal locations, and to generate more than $100 million in annual sales.
People’s Pottery’s aggressive rollout plan to invade upscale malls in North America could compete with Carl Lewis’ time for the 100-meter dash. But in retailing, an industry whose dynamics are in a continuous state of flux, “striking when the iron is hot” is crucial, James Froehler says.
“Consumers’ desires and their shopping habits are always changing,” he explains.
Cultural trends shape styles and fads; likewise, the state of the economy influences shoppers’ inclination to spend.
These variables, coupled with the make-it-or-break-it holiday season that stores depend on to bankroll expansion in the upcoming year, make retail a “capital-intensive industry,” Jenkins notes.
“It’s a tough tightrope,” he says, “(and) the Froehlers run it. They don’t walk it.”
Carla Froehler started her career in retail as a training manager for Hickory Farms Inc. in Pennsylvania, and worked her way up to district manager and then district supervisor. Her future husband began a similar path at Hickory Farms in Rochester, advancing from division manager to vice president of store development.
Carla Froehler says she knew from the start that her skills and satisfaction would be maximized in retail.
“You either love it or you don’t,” she says. “I think it kind of gets into your blood.”
Eventually, the pair met at an industry trade-show function. They were married in 1992.
When Hickory Farms began to fade, James Froehler started a consulting firm in 1990. Froehler and Associates specialized in real estate deals for retail firms.
By then Froehler had earned a reputation in the industry. That, and relationships forged at Hickory Farms, led to clients such as Borders and Nike Inc.
“You never burn your bridges with a former job,” he advises.
Carla Froehler joined the company a year later, adding her expertise in merchandising, store design and construction.
James Froehler credits the blossoming of People’s Pottery, where he serves as chairman and CEO, to the energy and passion of his wife, the firm’s president and COO.
“The idea was Carla’s,” he says. “She isn’t like other retailers. She sees value in things that not everyone else sees.”
The Froehlers’ first contact with People’s Pottery came when a mall landlord brought the Syracuse store to their attention in 1990. Although they became “good customers” of the store and thought it had potential, they deferred interest because of other commitments.
A few years later Carla Froehler revisited the idea of buying the business, and she was unable to stop her retail mind from spinning.
She designed the layout of the stores so that “you feel like you’re in someone’s home.” The earth tones, soft lighting and attractive fixtures showcase the high-quality pieces, which range in price from $10 to $1,500.
When asked where he learned his work ethic, James Froehler recalls a lesson that a sergeant major drilled into his head while in the Army: “The five p’s are: Prior planning prevents poor performance.”
The Froehlers’ combined skills create the basis for a diversified management team. Carla Froehler wears the “fun hats” of the business–from merchandising and store design to managing the sales force.
“I love sales,” she says.
Good luck trying to catch her for the next year or so. She also orchestrates all store openings.
By contrast, her husband spends his days with lawyers, accountants and computer systems.
In line with the couple’s expansion plans, People’s Pottery’s headquarters will move from Henrietta to a 60,000- square-foot location in Brighton–a sixfold increase in space.
People’s Pottery founder Dein rejoined the company as vice president of merchandising. Dein had been consulting with the Froehlers since the acquisition.
The business began 25 years ago when Dein hung a shingle outside a converted grocery store near Ithaca and began selling his pottery. The Purdue University graduate took an elective pottery class while earning a degree in political science.
After he started presenting his work at craft shows, Dein brought back other artists’ wares to his store. Thus began a solid network of craft vendors that the Froehlers were eager to keep within the company.
“(It’s) a good marriage of expertise, talent and background,” says Dein of his relationship with the Froehlers.
Dein has little doubt that People’s Pottery soon will become the “premier American craft retailer.” He knows of only two similar companies in Boston and one in Portland that have two or more stores.
But no one can compete with the variety of merchandise offered in People’s Pottery stores. Dein works with some 600 vendors around the country.
Skeptics wonder about the problems of mass merchandising unique, handcrafted items on such a large scale, but the People’s Pottery team says that is not an issue.
The concept the Froehlers have sold so successfully is that the independent mom-and-pop craft retailers and galleries–which have catered to the needs of well-to-do consumers looking for high- quality and original gift items–can be adapted and replicated in high-end malls to serve a much larger consumer market.
Thomas Markusen thinks the Froehlers’ marketing plan is right on the mark. Markusen, whose work crafted from metal has won numerous accolades and has been displayed in the White House, boasts 200 accounts with stores and galleries.
The craft industry boomed in the mid- 1980s, enabling craftspeople to begin higher levels of production, Markusen says. Even though the popularity of handmade goods has waned at times in the 1990s, he thinks as long as the economy stays strong and if consumers are educated on the value and uniqueness of its offerings, People’s Pottery can tap into a large base of potential customers.
The Froehlers have years of experience shaping and growing retail chains, but this is the first time, notes Carla Froehler, where, as owners and managers, they make all the rules.
Those rules include casual dress for employees and Friday office cookouts. The first company picnic was held at the Froehlers’ home in Pittsford.
Carla Froehler says she once heard that 85 percent of workers do not like what they do.
“We want the other 15 percent to be working at People’s Pottery,” she says.
The Froehlers say they do not have much time for leisure these days. But the pleasure they derive from filling in the details of their plans for People’s Pottery, while simultaneously watching their vision come to life, is crystal clear.
“I think that sometimes things happen for a reason,” James Froehler says. “Sometimes they don’t happen instantly, but (you) will reap the rewards.”

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