How a set of bed sheets led to a success story unfolding in Utah

Almost any startup can point to the light bulb moment from which a successful business concept emerged, but Kacie and Sam Malouf may have the most humble origin story ever.

And it’s the one that started with a second-hand set of sheets.

In 2003, Sam was studying for a master’s degree in accounting at Utah State University and Kacie was working at a Logan buffet restaurant. The newlyweds were setting up their first joint home and Kacie, according to Sam, was dismayed to learn that her new husband had a bed outfitted with sheets purchased at a garage sale in Mexico.

Recognizing that a complete overhaul of sleeping gear was in order, the budget-conscious young couple bought a new king-size bed for $75 at a tent sale, then went shopping for a set of sheets – which had no previous owner.

“We quickly discovered how expensive king-size sheets were,” Kacie Malouf said. “And we couldn’t believe it.”

And not only was the bedding exorbitant, but the Maloufs were unimpressed with the way the products were packaged and sold. The experience resonated with Kacie and Sam and sparked the first sparks of an idea that maybe they had stumbled upon a market opportunity.

Sam and Kacie Malouf stop to talk with Linden Baker, founder of Fairkind, in the photo studio as they show off the different sections of their business in Nibley, Cache County, Tuesday, January 18, 2022.

Scott G Winterton, Deseret News

The Maloufs said Egyptian cotton was all the rage at that time when it came to high quality bedding and they decided it was the product worth pursuing. But where to start ?

“We started a detective process that was, really, based on no background,” Sam Malouf said. “Although I loved my accounting background, it didn’t help me know how to investigate a supply chain.

“We only had questions. Where does it come from? Where was it actually made? The research process was a huge learning experience for some young people in their twenties.

Through a combination of creativity and tenacity, the challenges of the investigation were met and overcome, and it didn’t take long for the Maloufs to find and secure a wholesale supplier and embark on what were then the days still nascent to online retail. The dotcom bubble had burst a few years earlier and, when it comes to online retail, there were far more cautionary tales than success stories when the first Malouf Egyptian cotton sheet sets went on sale in 2004. .

There was an instant thrill for Kacie and Sam when they shipped that first set of sheets to a paying customer. And it remained exciting as sales slowly increased. But with the budding success of their small startup came new hurdles to overcome and the need to find more creative solutions.

Their newlywed apartment served as both a residence and a warehouse with piles of produce slowly overtaking the living space. The couple also discovered a workaround on the packaging for shipping after discovering that many of the boxes discarded by their local liquor stores were perfect for the sheet sets. As they made money on every set sold, it became clear, as the volume of customers increased, that capital to build inventory was becoming a critical issue.

“Finding funding quickly became our biggest challenge,” said Kacie Malouf. “And I would never recommend this to any start-up company, but we did turn to credit cards.”

Kacie Malouf explained that back then you could get 0% interest credit cards quite easily and the couple relied heavily on this method to take their business to the next level. At what point ? The Maloufs were able to raise some $2 million in funding over the next few years and keep an album containing the over 100 cards they managed to get to do so.

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Sam and Kacie Malouf laugh and chat with employees in the area of ​​their headquarters dedicated to the Downeast brand as they show off the different sections of their business in Nibley, Cache County, Tuesday, January 18, 2022.

Scott G Winterton, Deseret News

As the business grew steadily and Kacie and Sam ran the entire show on their own for seven years, they achieved a bond. Should they continue to be involved in this successful, but still relatively small entrepreneurial “project”, or was it time to turn it into a bigger business?

There were plenty of signs pointing the way forward. While Kacie and Sam could still function as a couple, the company was making waves as an online disruptor, finding a niche in the wider market as a supplier of high-quality bedding products at prices that beat their biggest competitors. And the Maloufs believed it was possible to grow their customer base by expanding product offerings and perhaps even branching out into new areas.

So they took the plunge and started hiring staff, a decision that turned out to be a revelation.

“Their expertise created space for Kacie and I to brainstorm new ideas and research other market gaps that needed to be filled,” wrote Sam Malouf in a January article he wrote for Utah Business Magazine. “Shortly after first expanding our team, we were able to add mattress pads, comforters, duvet covers, and the big ticket item that found a large following to our bedding product line: mattresses rolled and compressed in a box that could be shipped directly to customers’ doorsteps.”

The success of the product expansion helped propel Kacie and Sam’s small bedding business up and out, ultimately leading to even bigger opportunities in a number of new product and service categories. . And they found ways to give back to the community that helped sustain their success along the way.

In 2012, the Maloufs moved into their first headquarters and just four years later were able to build a sprawling new headquarters just outside of Logan. In the same year, in 2016, they launched the Malouf Foundation, a non-profit organization dedicated to the fight against the sexual exploitation of children, targeting sex trafficking and online abuse.

In 2017, the company manufactured its first furniture, marking its entry into the furniture market. And 2019 saw the decision to reinforce their commitment to having broader positive impacts on the world around them when Malouf’s operations achieved Certified B Company status. The designation encompasses a “triple bottom line” mission of profit, people and planet and requires a rigorous certification process that assesses social and environmental performance metrics alongside business operations.

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Sam and Kacie Malouf, co-chairs and founders of the Malouf Foundation, welcome people to the Human Trafficking Policy and Education Summit at the Malouf Foundation in Logan on Saturday, April 17, 2021.

Spenser Heaps, Deseret News

The Maloufs saw a flurry of business in 2020 amid the worst impacts of the COVID-19 pandemic, acquiring Downeast Home and Clothing and womenswear retailer Hope Avenue. Kacie and Sam also became partners at Tamarak Capital, a venture capital firm in Springville, Utah.

Through their involvement with Tamarak, the Maloufs said they have had the opportunity to not only support exciting new ventures in various industries, but also pass on lessons learned from their successful years in business.

“Becoming partners at Tamarak has been exciting for Kacie and me because we still have an entrepreneurial spirit,” said Sam Malouf. “We like good ideas.”

“One of the companies they mentioned in (our) first meeting was Pura (based in Orem). Pura was already in their portfolio, and the fact that Tamarak found what promised to be a unicorn was definitely a reason to get involved on a deeper level.

“We were able to use our company history to advise Pura management on some of the mistakes we made early on, and how to avoid them, and provide insights into areas that could help them move faster – even are already one of the fastest growing businesses in Utah.

While the Maloufs’ core business remains focused on home goods, the business has now evolved into six key categories which include consumer products, services, technology, retail, logistics and venture capital investment. They have also established a nationwide distribution network with shipping centers in Utah, California, Ohio, Texas, North Carolina and South Carolina.

The company reports that the network supports daily sales of more than 30,000 products – more than two per second – and operates both online and in department stores in 58 different countries. They also leverage the asset as an additional source of business revenue, managing shipping costs for other retailers.

In his article for Utah Business Magazine, Sam Malouf reflected on the future of the sprawling operations he and Kacie now oversee, which include a roster of employees now exceeding 1,600.

“I’ll keep the predictions high in case anyone cites this in 2040,” he wrote. “We know we will continue to take calculated risks and make mistakes. We know full well that we will continue to invest in people, both through the company and through the Malouf Foundation. And, we hope we learn as much as we did in our first 18 years as founders.


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