A Chat with July’s Profile, Howard Flax, CEO, FLAX art & design

© Profile of Success, Catalog Success magazine, July 2007

Interview by Gail Kalinoski

Catalog Success: When was the catalog established?

Howard Flax: We mailed our first catalog in 1984 to a file of 10,000 names.

(Editor’s Note: The firm was started by Howard Flax’s grandfather, Herman Flax, who opened an art supplies store in San Francisco in 1938. Herman’s brothers also ran art supplies store in New York City, Los Angeles and Chicago. Other family members later started stores in Phoenix, Orlando and Atlanta. They are all independently owned and the San Francisco store is the only one with a catalog.

After Herman passed away in 1952, his sons Philip and Jerry ran the business. Philip is currently the chairman and his children, including Howard, are the third generation to run FLAX Art & Design. The retail store is located at 1699 Market St. in San Francisco. In 1985, as the catalog’s success grew, the company moved its distribution and customer service centers to nearby Brisbane, Calif.)

CS: What is your primary merchandise?
HF: As our name implies, the items we sell contain either an ‘art’ or ‘design’ component. Our strongest category is arts and crafts supplies, though we have become a gift destination with strength in a number of different categories, including wearable art and home décor kits. Wearable art designs include apparel and accessories such as socks, ties and jewelry.

CS: What are the number SKUs?
HF: Catalog 600, Web site 3,000.

CS: What is the current number of employees at the company?
HF: 70.

CS: What was your biggest initial challenge?
HF: Finding that balance between the product offerings and markets into which we mailed. It’s a constant challenge. We’re always trying to have consistent and strong metrics to put forth the merchandise that the customers are looking for.

CS: How did you overcome that challenge?
HF: Time and testing. Twenty years ago to today we have always put a product or two into the catalog to test a new category. The product mix constantly evolves in tune with our perceptions of customer needs. It is an ongoing challenge, otherwise you become predictable. You need to break out of the mold and test the waters sometimes.

CS: What would you say are your keys to success?
HF: Having an open mind and an open door. In order to make the best products available and extend the best service, I think it is critical to remain receptive to everyone. Also, we genuinely try to be different. The mailbox is a crowded place, and we like to think that things like our catalog cover contest help set us apart. We run the contest once a year and we get hundreds of entrants. From those entrants we select three different winners. Each will have their cover during one of our seasons – winter, spring, summer or holiday. We’ve been doing it for 20 years. It’s really fantastic. It builds a lot of loyalty to that segment.

CS: What about the business appeals to you?
HF: The creative process of putting a catalog together, and managing the various initiatives that push the company forward.

CS: What is your current biggest business challenge and how do you plan to resolve it?
HF: Increasing the level of self-sustaining business generated by the Web site. We’ve entered into new relationships to expand PPC revenue; a new data feed is improving sales results in shopping search engines; we’ve begun targeted e-mail marketing and we’ve taken a more hands-on approach with the affiliate program.

CS: How do you deal with the increased postal rate increases?
HF: Our mailings will not increase over last year, and we expect that the additional revenue from Web sales will offset the higher postage costs.

CS: What’s the biggest mistake you ever made in the business, and how did you recover?
HF: When catalog sales started to decline about three years ago, we reacted late because we blamed external factors instead of internal. In truth, the catalog had become dated and stale. We recovered by going through a rebranding exercise that left us with a fresh, newly designed catalog and a new companion Web site that wound up winning a Webby award. Our customers responded quite favorably to the change.

The catalog took on more structure; the product groups were more thematically oriented or departmentalized. So there was a more logical feel as one went through the book.

The catalog is typically 56 pages. The amount of catalogs we do each year varies, but recently it has been about five. We do one big holiday catalog with three different covers for every drop. There is a mix of house and prospect in each of the drops.

CS: What sets your company apart from the others?
HF: Our product mix. We have a very eclectic, fun assortment. The goal, of course, is to inspire one to keep flipping the pages.

CS: What do you do to keep things more fun at the company?
HF: We have a basketball hoop and ping-pong table that get surprising little use. Most of the staff has been here for years and they are a close group, so there are a lot of potlucks and birthday celebrations.

CS: Have you had any mentors?
HF: We are a family-run company with my father, brother, sister and myself working together. My brother, Craig Flax, is our executive vice president and works primarily in marketing. My sister, Leslie Flax, helps out in numerous departments and together we represent the company’s third generation. For the better part of 20 years, I was lucky enough to work alongside my father, who was a mentor and more.

CS: What are your hobbies?
HF: have two young daughters and tend to spend my free time playing with them, tending the garden or exercising. To keep me young, I like to do a couple of adventure races a year, usually mountain biking and an open water swim in the San Francisco Bay.