Few retail stories embody the spirit of entrepreneurship and resilience quite like that of Tom Sullivan and Lumber Liquidators. From humble beginnings to industry dominance, through challenges and reinvention, Sullivan's journey is a testament to the power of customer-focused business and determination.
I saw this image above with Tom's all-caps message on LinkedIn Sunday: YELLOW AND BLACK IS COMING BACK!! THANK YOU ALL FOR YOUR SUPPORT!
I'm covering him today because of a very high-profile, last-minute purchase of LL Flooring, the brand he started famously several decades ago. He shared many details with me on my podcast a few years ago, and other information comes from a recent interview he and Jason Delves, CEO of F9 Investments, did with Flooring Retailer.
And before I get too far, here are the details of the purchase: Under the terms of the asset purchase agreement, F9 Investments will acquire 219 stores, inventory in those stores and distribution center, LL Flooring’s intellectual property and more. The transaction is expected to be completed by the end of September, subject to approval by the Bankruptcy Court and other closing conditions. Since F9 put down an escrow deposit of $4.1 million, all signs point to this being completed.
Seizing Opportunity: The Birth of Lumber Liquidators
Sullivan's entrepreneurial spirit emerged early at age 12. "I built a couple of bike ramps," he recalls. Inspired by Evel Knievel, young Tom charged 50 cents for neighbors to watch him jump his bicycle between his homemade ramps. This early venture foreshadowed a career built on seizing opportunities and delivering value to customers.
The birth of Lumber Liquidators came from Sullivan's keen eye for opportunity. While running a construction company in Boston, he noticed surplus building materials at a warehouse. "I started seeing some leftover stuff that wasn't bad. The packaging was a little ratty, but the product itself was good," Sullivan explains. This observation led to weekend sales of discounted building materials, eventually focusing on hardwood flooring.
Customer-Centric from Day One
Sullivan's customer-centric approach was evident from the start. "I was in the store, every customer that came in, I asked them how they heard about us." This direct customer engagement on the sales floor shaped the company's marketing strategies and product offerings. Many retailers lose their way because management doesn't connect with the front line—ever. Store one is pictured below with its bold graphics and promise of "Hardwood floors for less."
The growth of Lumber Liquidators was marked by Sullivan's ability to spot and seize opportunities. When considering expansion, he placed classified ads in different cities. "The phone rang off the hook from Hartford, so we went to Hartford for the second store," he recounts. This data-driven approach to expansion helped Lumber Liquidators grow rapidly.
Data-Driven Expansion
Sullivan's leadership fostered a unique company culture characterized by a can-do attitude and strong employee loyalty. He implemented a commission structure that rewarded hard work, explaining, "I basically set it up how if I were running a store, how I would like to work and the harder I work, the more money I make."
Fostering a Culture of Hustle
Lumber Liquidators culture of hustle and opportunity is perhaps best illustrated by an anecdote Sullivan shared with me. Tom watched pennies so much that the managers had to save the metal clips that bound the flooring to reuse on shipments. "One day the Hartford store got its own box of clips and the manager called me and said, 'So I see we made the big time.' What are you talking about? 'I got my own box of clips today.'" This story, about a simple box of metal clips used to band pallets of lumber, exemplifies how Sullivan's frugal, opportunity-seeking mindset permeated the company culture. It is a hallmark of entrepreneurs.
Investing in People
As Lumber Liquidators grew, Sullivan recognized the importance of investing in people. He recalls a pivotal moment when an early employee, Jerry Madden, considered leaving due to lack of health insurance. Sullivan's response was characteristic of his approach: "Well, get your health insurance and I'll pay for it." He found a way to provide 100% health coverage for employees early on, demonstrating his commitment to retaining good people.
Upgrading Sales Operations
It was during this period of growth that Sullivan's path crossed with mine. As a retail consultant specializing in sales training, I received a call from Tom in 2008. He was looking to upgrade their sales operations, recognizing the importance of continual improvement even as the company flourished. Over several years, I worked closely with Lumber Liquidators' District Managers, helping to refine their sales strategies and reinforce the customer-centric culture Sullivan had instilled.
That Stupid Name Change
However, the journey wasn't without its challenges. After taking the company public and stepping away from day-to-day operations, Sullivan watched as subsequent leadership made decisions that strayed from the core values that had made Lumber Liquidators successful.
The most glaring misstep came with the decision to rebrand the company as LL Flooring. This move, intended to distance the company from past controversies, effectively erased decades of brand recognition. The familiar yellow and black logo, reinforced through what Sullivan describes as "over a billion dollars in advertising," disappeared overnight. It became a softer sand color logo that was easily forgettable. And it was.
Sullivan's perspective on this decision is clear: "If you were going to change the name, just keep it within that same color, same logo and all that." The rebranding not only confused customers but also diluted the strong identity that had been a key factor in the company's success. They had spent millions each year to deliver that brand everywhere their customers were.
The Comeback: Reclaiming the Yellow and Black
That misstep, among others, set the stage for Sullivan's dramatic comeback. In a testament to his enduring connection to the company he founded, Sullivan recently emerged victorious in a proxy fight for control of LL Flooring. As he took the company private, his victory paved the way for a return to the core principles that made Lumber Liquidators a household name in flooring.
Vision for the Future
Sullivan's vision for the company's future is rooted in the same customer-focused, opportunity-seeking approach that drove its initial success. "Yellow and black is back, and so are the great deals," he declares, signaling a return to the brand identity and value proposition that resonated so strongly with customers.
The comeback story of Tom Sullivan and Lumber Liquidators is more than just a tale of corporate control. It's a reminder of the enduring power of entrepreneurial spirit, the importance of staying true to one's core values, and the impact of putting employees and customers at the heart of business strategy.
Lessons for Entrepreneurs
For entrepreneurs and business leaders, Sullivan's journey offers valuable lessons. It underscores the importance of maintaining a strong brand identity, the value of a customer-centric approach, and the power of fostering a company culture that empowers employees and rewards initiative.
You could see the loyalty to Tom - years after he was gone from Lumber Liquidators - in 180+ comments on Tom's original post - many from current associates, "Thank you! Ready to do big things - Let's get to work!" and "Black and yellow!! 💛 🖤 I tell stories of it, and now I get to do it again! Amazing and blessed! Thank you for the relentless pursuit to claw it back!"
As Lumber Liquidators embarks on this new chapter, one thing is certain: with Tom Sullivan at the helm, bringing his trademark hustle, customer focus, and eye for opportunity, the flooring industry is in for an exciting ride.
The return of the yellow and black may just signal the beginning of a new golden era for Lumber Liquidators.
