How I Built This with Guy Raz - Zumiez: Tom Campion

Episode Date: February 6, 2023

Working as a manager for nine years at JCPenney, Tom Campion learned a critical lesson about how to succeed in retail: you have to keep close track of inventory. Tom’s experience navigating the ebb and flow of style, color, and size—all without the benefit of computers—gave him the confidence to launch his own retail business, aimed at teenagers. In 1978, he and his partner Gary Haakenson opened their first store, Above the Belt, in Seattle, and soon tapped into the hot new “action sports” category and the growing popularity of surf, skateboard, and snowboard culture. Tom placed his stores in shopping malls, and created spaces where teenagers would want to hang out, by leaning into “organized chaos” as a design principle. Today, with roughly 750 stores, Zumiez is the largest action sports retailer in the world.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. We were doing all right, but it was important to get your inventory right. So many retailers, they fall in love with their goods. Yeah. And I always have to say, you're never married to your goods.

It doesn't work. Got to mark it down. turn it, you've got to get cash back and buy something that a customer wants. Yeah. But then taking the risk, you're going to buy 100 or you're going to buy a thousand. A lot of people don't have the ability to do that, to see that. I mean, it's old school. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists,

and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Tom Campion saw a major market opportunity and the culture of skating and snowboarding and built Zumi's, the biggest action sports retailer in the world. I bet you know of a really cool store that for one reason or another just didn't survive. There was an awesome kitchen store here in Northern California

that went out of business not so long ago, and it's kind of hard to know why. It was beautifully curated. The store had things no one else carried, and the prices were totally reasonable. but for some reason it just didn't work. Now, this happens to really good stores every day. And part of it is the uncertainty of retail.

There is so much you just can't predict. But there's one thing, one business fundamental, that might actually give you a fighting chance. And it's not a flashy social media campaign or a buzzy redesign. It's actually something a lot less sexy. But it's the thing that enabled Tom Campi, to build Zumi's. In Tom's formula, it basically boils down to managing inventory, being obsessive about keeping

track of what you have, what you need, and what you think your customers will want next. Zumi's, if you're not familiar, is the world's largest action sports retailer. So think apparel and gear centering around skating and snowboarding culture. The brand has around 750 stores in North America, Europe, and Australia. And in 2021, they reported over a billion dollars in revenue. Tom founded the precursor to Zumi's in 1978 with his friend Gary Hawkinson. Before that, Tom and Gary both worked at J.C. Penny in Seattle. And that was where Tom learned about the nuts and bolts of retail.

And as I mentioned, how to keep a business profitable by making sure you manage the inventory carefully. Zumis started out as a teenage-oriented apparel store called, above the belt, but in the 1980s, Tom started to notice that teenage boys, particularly in Southern California, were wearing surf and skater brands, brands like O.P., gotcha, billabong, Santa Cruz, and Quicksilver. And Tom had a hunch that surf and skate and eventually snowboard culture would have a lasting appeal. And he quickly built a culture at Zumi's to capitalize on that appeal. Tom grew up in the 1950s and 60s in Seattle in a week. working class home. His dad was a mail carrier and his mom stayed at home to raise the kids.

And while Tom was still in college at Seattle University, he got an early start in retail. I'm working in grocery tours and I'm loving it. It was my first taste of retail, even though I was a paper boy for like, I think, four or five years. And a grocery store business, you're running five ways from Sunday. People are buying stuff from you. I just love, I love the energy, the action. I loved interacting with people. Pretty soon I'm, it was this pre-computer. I'm buying for a lot of store.

I'm good at math and, you know, managing inventory and stuff like that. Not managing the store by any means, just really solid worker guy, right? And doing this. And I really enjoyed this. And I'm working about 25 hours a week, 30 hours a week, some weeks. I'm paying my own tuition. And I graduated in June. And I can't remember exactly how this happened.

but I applied at J.C. Penny. It was retail. And Pennies was great training program, all that stuff. And I was hired, I think, right before Christmas that year. They had presumably like a graduate training program to, I guess, get college graduates into their management program. Yeah. Yeah. A couple of years, a year and a half, two-year training program on college graduate and management. And J.C. Pennies, at the time, it was really important. I mean, in 1970, you're talking about, you know, J.C. Pennies was competing with Sears. Oh, yeah, yeah, and the high end was the Bon Marchet here. So it was a major department store. And the funny thing is, anybody that knows me, you know, you're wearing a suit. So I had three or four suits with a white shirt, blue shirt, great tie, and you're walking around. And eventually, after a year and a half, two-year program, I stayed in that store that made me manager of the men's department in like 1971. Wow. This is the, this is the, uh, Jaycey Penny at the north. Gate Mall in Seattle. Yeah. It was probably a bustling huge place, right? Yeah.

It's a big volume. I can't remember how much it did. I was good at it. But you had inventory sent to the stores. They were corporate buyers. So you weren't really deciding what was being sold, right? Yeah, I wasn't totally in control of my own destiny. And it had always gotten a problem with inventory because he would be buying part of it,

he or she, on a system that wasn't computerized, right? You didn't know exactly where everything was and had to be written down. So pennies in the 70s, we were still in the evolution. It was high inflation, but that's where a lot of America shop. They come in there, get their auto-fix, buy a set of tires. Toy Department one year was yo-yo's, and they still buy yardage, and you had the white sale. You know, white sale at pennies was intimate apparel, and then domestics,

curtains and pillows and pillowcases. And you could measure how the economy was doing during a white sale when customers usually women come in and they stock up. So Tom, you are a young man and a young father, right? I think you got married at a pretty young age. Yeah, I was married at first time at 21. I've been married twice, you know. And my daughter came along in 74, Amy and my son in 78 right before I left for his own. All right.

So you are at Penn. And there's a guy there named Gary Hockinson or Hackinson who's also working there. Yep, Gary Hockinson. He's, I think he's my age, year older, was in the training program. And, yep, we went through the highs and the lows. Where was he working at Pennies? Northgate. I assume you, Gary.

And Gary is important because the two of you would eventually go and start a business together. But do you remember ever talking to Gary? Would you ever sort of, I don't know, lunch breaks or, I don't know, and say, you know, we should do something, Gary. Do you remember it, having those conversations? Well, usually around lunch or you go jump in your car, you go to the McDonald's driving or whatever, or going to the Denny store, you were the highs and lows of any business, right? Oh, yeah, God, that guy's busting my chops or whatever. And you get to know each other.

I knew he was competent. I think he believed I was competent. We said eventually it was always a pressure on how much money you made. He had two small kids, too, that about my kid's age. So he was raising kids in the 70s just like I was. And, you know, it was like, are we getting rewarded for what the work we're putting in here? And he grew up in the Northwest, too. So, you know, I don't think he really wanted to move to L.A., New York or to other places to go up in the Pennies Corporation.

All right. So the two of you are working there. And you end up staying there for like seven years, I think. I was there from, you. I was there from 70, 78, so nine years. Nine years, wow. Eight and a half. Yeah, I'm wondering, I mean, here you are, you know, eight years into your time at JCPenney's.

You've invested a lot in learning about the company and growing there. And clearly you were on track to manage your own store at some point. Maybe. But what made you think, let me leave this stable opportunity and do something a little risky and start my own store. Like, what was it that got you thinking like that? where I was getting the training, I just didn't like how it looked and how they managed

without writing a management plan down guy. I mean, how you treat people, how you empower people, how you recognize people. They didn't do that. They didn't do that. Not as much. It was always, oh, my God,

what is the manager going to think? And the manager told me what he thought. Put your suit on and it looked like you're in management. And up to that point, you know, it wasn't like we came out of the blue and we were, you know, I don't know, school teachers and said, okay, let's open up a teenage clothing store. You had experience.

I had five years in grocery business, and by the time we did this, nine, so like 14 years. So you had this idea to open a store that would basically appeal to like teenage boys, more or less, right? Yeah, it wasn't called Zumi's Inn. It was called Above the Bill. Huh. And, you know, we both had experience in men's department, even though at that point I wasn't managing that. And we, you know, and then you looked at the market, what didn't the market have? And you knew what was going on, and especially in young men's teenage, because that's where it flips. I mean, you don't go into selling blue suits because blue suits don't flip.

Right. But, you know, teenage brands flip all the time. When you say flip, you sell a lot of inventory. Yeah, or the brand changes. It means if you can get in front of that, you're going to attract a customer. And that's all about managing your inventory because that puts you out real quick. And that was the secret for you. Like, you figured out that if you could understand how to manage inventory, you could probably run a stable business and maybe even a great business.

Yeah, yeah. But we had that training, which appealed to Northgate Mall, I forget who owned it, and they gave us a shot. All right. So you and Gary decide to launch a store called Above the Belt. And let me, before you even opened it, sort of help me understand how you did that. because you, both of you were sales managers at a JCPenney store. And so I have to assume you did not have a lot of capital, a lot of cash on hand. So how did you, I mean, you had to rent.

So I'll walk you through it. Yeah. We went to the bank. It was Seattle first or something. It was eventually bought out by B of A. And we had done, you know, the cost of building the store, what it was. And we did some of ourselves. We hired a couple of guys to build it out.

but the biggest expense was inventory against getting it open, starting to get cash sales coming back in. And what we needed was a total was about $45,000, which sounds preposterous. But this is 44 years ago. Yeah. But like any bank, you guys got to be friggin' kidding me, and I'm using friggin, you know, as the clean word.

But we ended up with an SBA guaranteed loan, so the bank is just filling out the documents and making points and the money comes from government. That's a great program. Yeah. And as you know, I do a lot of political stuff. And I say, hey, I got started on SBA. Yeah.

And now I employ 10, 11,000 people, Gen Z because of an SBA loan. We each put in five grand and we borrowed 35 grand, something like that. So that was a massive amount of money in 1978 to borrow. We really wanted to leave pennies. Yeah. Bigger thing was interest rates. You know, everybody talks today. interest rates are going up. Oh, my God, they're 4% to 5%. We borrowed it for the first four or five

years as we grew. I think we were paying 16, 17, 18% interest rates. But the interest rates in the 70s and early 80s were like 15%. Yeah. All right. So you and Gary have this concept because you have experience to open a store. I think it wasn't just for men. It was for young people, basically, clothing for young people. So you decide to open the store at the Northgate Mall, where the, where the pennies was. And I guess, I mean, in the 70s, 80s, that was where to be in the mall, right? You wouldn't have opened it in downtown. That was where to be. There were stores downtown. But the action after World War II is to the malls. And we're in 600 malls today. It still is for our customer. I'm curious. I mean, I'm looking at a photograph of you, and I think it's you and Gary, in front of and above the belt store in the late 70s. And it's a really cool. It's got a really cool design. Like the exterior has like these really nice like wood, this beautiful like sort of Pacific Northwest wood like blonde wood look.

And who was the sort of the person who picked the clothing or pick the design or did you and Gary do that together? How did you come up with that look and even the clothing that you would select and curate for the store? Well, you'd figure out what was on the mall. You'd figure out what was in the market. You figure out what was not suitably represented on the mall. And then you had to take the risk. Soon or later, you got to spend that money and buy it. How would you figure it out?

How would you know? So there was a famous clothing show then called Magic that used to happen in L.A. Then it went to Vegas. And we started going to that. To the trade show. Right. Oh, the trade show. And, you know, it's less of that now.

And it became an action sports show later on. We'll get into that. But you go to the show and, you know, it's like 100. thousand people and you go, holy shit, you know, how am I going to figure this out? But you did because you had the training. You could see and you knew people and you talked. Yeah. You communicate it all the time and, you know, and reps, the reps work remotely. It isn't probably as centralized as it is now a brand. So they're out. They're trying to find new places to sell their goods and we could sell. In the early days, was it just you and Gary working the store?

Oh, no. Well, we, even in the early days, You know, we both had families, and we'd split it up, work nights, work days, weekends, but we had, I think, three other employees, two or three other employees. And, you know, we hired people that could sell. We knew how to staff, too. We knew how to schedule staffing, right, when the busy time was because we worked at pennies. What do you remember when you and Gary were, like, talk about this business above the belt? Do you remember having really ambitious plans to make this huge?

Or did you think it was going to be a one-off store? Neither. You know, we achieved our first goal. We got out of pennies. And we were doing all right enough that we're comparable to what we're making in pennies. So, and you're doing it all on your own. Yeah. You're winning or losing.

You're achieving. You're driving a comp all on your own. And you go, there's nothing more satisfying. I said, I did that. I mean, I did that, you know. And it just felt right. And in retail, when you say you're driving comp, It means that you are increasing the sales year over year.

Year over year without, you know, in Zumi's, you know, it would be year over year in existing stores, not counting new stores. But it was important to get your inventory right. Yeah. And to take the mark down when it wasn't, to know when to do that. So many retailers, they fall in love with their goods. And I always have to say, you're never married to your goods. It doesn't work, got to mark it down.

You've got to turn it. You got to get cash back. buy something that a customer wants. I mean, it's old school. You know, we use different metrics now on computers and looking at categories and sizes and open to buy and it's in the tens and hundreds of millions of bucks, but it's kind of the same thing. Yeah. I'm totally fascinated with, I mean, it's, the reality is like the boring stuff of like managing

schedules, making sure, like, you know, you know where, when items are coming in, and how many items, sizes, those are the things that actually, when stores don't do those well, they might have an amazing product, but that sinks a store. So your top line is what you do every day. Biggest cost is inventory. Yeah. You know, usually half your top line. Second and third biggest costs are payroll and rent, you know, and escalating leases, rent,

and pay people adequately to keep them and incentivize them and stuff. So you've got to get that right. You've got to pay a lot of attention to it. And over time, over five or six years, it was always the inventory, but then having the hot stuff too, but then taking the risk. You're going to buy 100 or you're going to buy a thousand? Yeah. A lot of people don't have the ability to do that, to see that, and to remember how it worked

before the time of year it was and how size and colors and, you know, and fabrics and all that. Why would you, like, what was the value proposition? Why would I go to your store and buy something at your store rather than J.C. Penny's another store. Did you have things that you couldn't get anywhere else or were your prices lower or what? Prices weren't lower, but it was a lot of Northwest brands. Some genera, but a lot of Union Bay and Stel Shah Safari and they did other brands called International News and always T-shirts, almost all in guy sizes. Our junior business didn't come on until like in the 90s, but we had a lot of junior traffic, but you'd buy stuff that they couldn't find in a junior store.

Yeah. You mentioned this brand Shaw Safari, and it's interesting because this was a brand that was started in Seattle, and it was basically focused on apparel for young people. It was like a company that was actually started there, and it's still around, but, right? Yeah, and Raj and Akiel Shah. I bought stuff from them when I was at Pennies. I knew them before Above the Belt and Zumi's. they were into it and they obviously liked myself and Gary

and when it was important to have something at the right price, whether it was flannel or gauze or something in a short, they could supply it. They always knew the price point, what you could drive it and still make money, even if you had to mark it down. And so, all right, so you have this store in the mall in the late 70s, early 80s,

and it almost sounds like it was shooting fish in a barrel. Like you were just, you opened the store, doors and people came in and started buying stuff. Or am I... That's right. Yeah, it was. Northgate Mall had traffic. Oh, here's something new. Yeah, let's check this out. Didn't spend a lot of money on advertising. Interesting thing about teenage clothing business, you have two violent peaks. Got back to school. Yeah. Which, you know, it's longer, used to be longer. Then you have the Christmas season. Right. So I was very aware of that from my years of pennies, as was Gary. So you'd buy to that. And, you know, if you're worried, you're

working in, for instance, gifts or housewares, your violent peak was Mother's Day, which was a day, and Christmas, which was three weeks. In teenage clothes, it's different. You have two violent peaks, two bites at that apple to really nail it. I'm very distracted by this term violent peaks, because in 700 interviews on how I built this, I've never heard it, is that a Tom Campion term, or is that a business term? Because I've never heard it. I can't remember. I don't think it was distracting because I don't like violence. I don't like it. Yeah.

I just meant that, you know, there's a lot of stuff going on, which was, it's energizing. So Tom, you have this store and people are coming in. And at a certain point, I mean, I think within two years you start to open your second store. It was in a year, and it was 30 miles north of where Northgate was, 25 miles, a place called Everett, Washington. Sure. And we opened it up at the following back to school. So it was about a year later. And could you finance that through cash flow or did you have to take out more loans? SBA loan. More SBA loans. And say, look, this is what we're doing. We had it all documented and the guys on, you know, and he goes, oh, it's great.

And we bought more inventory and opened like for back to school. And were you worried? I mean, you weren't worried at all about being over leveraged, taking out more loans? No. Because the business was doing well. You saw, you saw where it was. heading. Yeah. All right. So you have these stores and they're growing. And, I mean, were they very profitable? Were they barely profitable? Presumably they were profitable because you were expanding. They were profitable. And we're not making a ton of money, but we're making a living and we're growing. And every year, I think we were able to pay ourselves a little more. I really don't

remember. But yeah. So you're like six, seven years into this business, about. of the belt and it's doing pretty well. You're not like, as you say, you're not making crazy amounts of money, but you're able to support your family. And you've got, I think around the mid-80s, around like 85, five or six stores at this point. But you change direction entirely. Like you stopped being just a regular apparel store and you pivoted like almost entirely to action sports, like skateboarding and surfing. So what happened? Why did you make this shift? Well, you could see it. We're into shows in Southern Cal and action sports early, which was surf and skate, which was O.P.

Santa Cruz. Yeah, but that skate was always Southern Cal. Yeah. But, you know, and by the mid-80s, there's enough of Northwesterners. They vacationed Southern Cal, warmer weather up and down the coast. It's easy to get to. And you could see this shopping the market in L.A. And the first line I brought in to test this was a line called Gotcha Surfware.

Yeah. And as big fish man with his flag on, you know, on it. And it just like, it was for me a holy shit moment, man. This is evolution. And I'm doing all the buying then. And so it was immediately followed by Quicksilver. And you could see this and how the kid responded to this. So it exploded.

This shit is hot. When we come back in just a moment, why above the belt has to change its name to Zumi's and why Tom decides he can. attract more customers with a comfy orange couch. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Welcome back to How I Built This. I'm Guy Raz. So it's the mid-1980s, and Tom Campion notices that action sports are getting more popular up and down the West Coast. So he starts to change what he's selling in his stores, from traditional casual wear to clothes worn by skaters and surfers.

And so, you know, it was quicksilver. And then Bellabong and Gotcha and Gotcha came and went. You know, they couldn't do it. But then right away, I remember a clothing shirt, I picked up Rusty and body glove and mossymoe and red sand. So new brands, brand of names that were significant, which meant t-shirts, sweatshirts, and shorts and spring and hoodies in the fall. Ever three, six months, it was a dynamic time.

Kids are looking at that and go, whoa. You were sort of seeing where the kids in Southern California were going. You were anticipating that there was going to be a huge appetite for that in the Pacific Northwest, which there was. You were presumably one of the only stores that was stocking all of this stuff. Yeah, we had a competitor at the time that had about started in South Seattle and Tacoma called Mr. Rags. And I think we were managed better. They got up to 150 stores and eventually they're gone.

And we were better at doing it. And it isn't like one day you come in as a floor set all surf and skate. Right. It's gradual. It's gradual. But gradual doesn't mean you wait five years and try it. This is about, man, this shit's selling. We need more of this, right?

Yeah. And then right then I bought hard goods, skate hard goods into the mall. And when you say hard goods, you're not talking about the clothing, right, but the actual skateboard. Skateboards. Right. And trucks and wheels and those kinds of things. Like the things that people usually had to go to buy at a. skate shop? Yeah. I put them in the

back of our stores, which is the with the logos facing out, you're hanging them on the wall, you got them up on pegs or whatever. So the logos are shown. It became a whole lifestyle. You know, the skateboard kid was just frigging cooler than the

five guys that can be on a basketball team or 10 guys on a football team. Yeah. And how they dressed, how they look, how they talk to each other, the lingo. And it's about kids growing up going into adult or feeling good about being an individual and feeling good about what they do, you know, is like, I could see that.

And you were not, you, I mean, by this point, you're like a guy in your sort of late 30s. I mean, you were not, this was not you. You were not a surfer or skater, right? Neither. I always laugh. People said, oh, did you skateboard as a kid? No, this shit sells. It's just about stuff themselves.

I love it. You know, do you work for Boeing? Did you, like, fly planes as a kid? No, Boeing paid me a good salary to design the wingtip. Right. When you are, when you and Gary were running this and now, you know, the surf apparel is really driving above the belt, how did you guys divide up responsibility? Was he more sort of the business person and you were more sort of the front-facing person? What do you remember about that?

Yeah, I remember that I took over the buying. And at that point, our office was still in the basement of North Carolina. Gate Mall. Wow. That was your... It was free. It was on the lease. It's free. Oh, wow. So you could have all of your your operations there. You could have your desks and computers and whatever. Yep. No computers, adding machines. Adding machines, right? And so as you expanded, right? I mean, because you kept growing, building more stores in the Seattle area, were you doing all this again through loans? Or at a certain point, were you able to just use the cash from the business? I'm sure there was. still loans. I don't exactly remember, but they probably became less leverage and they probably

became smaller because we're working, you know, off of cash. But yeah. All right. So I know by the late 1980s, as you're really starting to hit your stride, there's like a whole new kind of boards for taking up, which of course is snowboarding. And that would become a huge part of your success, right? Oh, yeah. Towards, you know, we are, I'm a mountain guy. I'm talked about my personal life. I was always up hiking, backpacking, all that stuff. And I could see the board sports, the kid on the skateboard where this was going. And up in the Pacific Northwest, Mount Baker Ski area, I called up Vision Street where I said, I want to carry Sims snowboards. Oh, no, no, you know, you know, you can't do that.

You're a skateboard shop. Well, I'm a skateboard shop because when they told me I couldn't carry skate, I did it anyway. And we sold a ton of the darn things. And so... Wait, wait, just to back up for a sec. You're saying that you called up one of your suppliers' Vision Streetwear, which sells snowboards. And the person on the other end didn't want to sell any to you, like they just refused? Yeah.

And we started... He wouldn't sell me hard goods. I said, well, look, I'm a huge dealer of Vision Streetware. you owe me, you're going to give me a snowboard for every store. We're going to have a contest at Christmas. You fill out your name and address and a phone number. There's a be a winner of a Sim snowboard. We had like seven of them they sent us.

We put them in the front of the store, and the kids were like, look at this. And so we had like bags and bags these entries. This is before computer. It isn't like you enter your email and get on the list and all this stuff. It's just old school hard work, and we're creating buzz. And so I right away then, you know, after Christmas, call up Burton. And I had Burton reps in. I forget the reps name.

But I always thought, or I know I was close, be the first Burton retailer to bring product into malls in the United States. And this would have been 1989. So you're talking about snowboards and snowboards, but really sold the clothes. You sold. You didn't make money on the board. You made little money on the boards and the bindings and the boots. And so fall, you sell a pair of pants, pair of jeans, but then they go, oh, you got a new category called snowboard pants. So the kids in the Northwest were like, oh, look at that kid on a snowboard.

And I got skis in there, you know, they're in there buying instead of red, white, and blue on their jacket or sweatshirt. It's orange and brown or black and, you know, and lime green or neon and the pair of. goes, what the hell are you doing, right? That kid that wanted to be the individual that just like, oh, man, it's different music and more skulls on teas, and the beanies became hugely important. Right. In the early 80s, we never carried beanie. Suddenly had a beanie with Burton on it or Sims are hugely important, and kid, he'd wear

them for style, not just to keep his head warm. And you would discover a lot of these things at trade shows and say, we've got to get those into the stores. Yeah, and eventually you became, they came to you, right? The reps would come to you. So you're curating all the time, trying to what's next, what's understanding. You'd have kids working with you and, you know, and then you'd have all the logistics of managing inventory, all the paperwork or whatever. So, Tom, 1993, you've got roughly 12 stores, and your co-founder, Gary Hockinson, he decides to leave and you buy him.

him out, and he eventually became the mayor of Edmonds, Washington. He was just tired. He was done with it. He was wanted to move on. You know, we built it up. I never said, give me the five reasons you want to leave. We still were friends, and getting along. He says, I'm ready to do something else. And so we had to put a value on it. We were able to work out a contract where I bought him out. And then I became, he kept a little bit of it, I think, but I became like 95% and the ownership. And at that time, I brought a met through a mutual friend,

a guy named Rick Brooks, who was in between jobs, who was an accountant. And I said, you know, my founding partner, he wants to get out. I've thought about it. And he joined me, bought in for a little bit, and I gave him a bigger option. But there's a big aha moment for me here, Guy. And I go, I can take money off the table. And money's always tight. And I've never made money off this.

You mean, you could have sold, you could have sold to, too. Oh, yeah. So you basically had a decision to make because, I mean, how much do you think the company was worth in 1993? It's worth some money. That, you know, it's never been made public so we don't need to do it now. And he took. But you could have sold too and you would have had a couple million bucks on the tail of your own? Yeah, probably not that much.

And I was all agitated for a month. It was just, you know, I was just like, and I'm working with a coach, shrink or whatever you want to call it. And he goes, this is really bothering you. Maybe you, I'm going to get emotional here. Maybe you like what you do. And it was just an aha moment. I love this stuff and what we were doing. And I go, man, we need to do this.

I need to help keep growing this. I like this. You know, wherever it goes, I don't know where it's going to go. But I love doing this. and Rick came in. He took half off the table and I stayed. I've always loved everything I've done. What a privilege. 74, I still say. I love this. So you, so you're, you know, your co-founder, Gary, is out of the picture. You've got about 12 stores. You're now approaching your mid-40s. So you've got, but you've got a new partner, Rick Brooks, and this is 93.

And not that long after, 94, your brand above the belt gets. sued by another clothing store that had the same name. I mean, at this point, you had an established brand with like 12 stores. I mean, weren't she kind of worried about, oh, my God, we got to completely start rebrand this thing? No, it was a women's apparel store called Above the Belt in California. So they were going to sue us. So we had to come up with a new name. And the first couple years, when we changed it, didn't make a difference. Where am I? What's the name of the It didn't matter. It didn't matter.

It didn't matter. And how did you come up with the name Zumi's, by the way? I did. And we didn't hire a branding and blah, blah, blah, and all. I had a meeting with some of my most creative people one night. We were thinking about this. We knew we had to do this. And, you know, we couldn't figure it out.

And I was reading a Smithsonian magazine about Zuni Indians. And I go, oh, Z. Oh, man, Z. Young and Fun Z is a great letter for graphic and on teenage clothes. You know, some words start with Z, N with Z and whatever. So I go, Zoom, Z-E-Z, young and fun, Zoom fast. And we had a design guy that had working with us then named Doug, and Doug screwed up the spelling, Z-U-M-I-E-Z.

And I look at it and I go, that's it. And it means nothing. It means everything. It means brands. It's action sports. It's fun. It's individual. It's just a completely made-up word.

Z-U-M-I-E-Z-Z-M-E-Z-M-E-Z-M-E-Z-M-E-Z-M-E-Z-M-E-Z-M-E-Z-M-E-Z-U-M-E-N-U-M-E-Z-U-M-E-SU-M-E-M-E-SU-M-E-RU-M-M-E-SUmies. I mean, at this point, it's 1994. what do you remember about the ambitions at that point? Because I think around that time, you had about 20, maybe 25 stores, a lot. all in the Pacific Northwest, but at this point, was it clear to you that this has to become a national brand? No. No. The first store in the Rockies was Boulder, Colorado, Crossroads Mall.

I think that's gone now. And then we worked our way down into Denver. And it was all malls. The strategy was open in malls because that's where the teenagers are. Yeah. Yeah. America shopped in malls. And we were doing this.

And there would be people in these new malls, retailers that carried this. but they weren't authentic like us because of the hard goods, because of, you know, the detail we spent with the stickers and the look of the store and the colors and the kids we'd hire. And we just worked the lines and the categories and the evolution. It wasn't until the late 80s, early 90s, we got into shoes. And the first one was Airwarks, but then Etnies, which is still around us, and Vans.

And Vans is a huge part of our business. I'm curious about something that you had in the stores, and you have in the stores today, which is a couch. You very consciously put a couch in the stores. Eventually, you put things in like video games, all really designed to keep people in the stores longer. Yep. Yep. It was part of the lifestyle. And I remember the first store we did that in.

It was, I think it was in Belbue Square, Alderwood Mall. In Seattle. We had a creative guy, one of my lead buyers in Seattle. His name was Art. A great friend. It was all part of this. And we set up the orange couch and just old furniture. You'd buy it, St. Vinny's or something, a couple chairs and funky lamp.

And it was all about hanging out, right? Yeah. Then we'd buy an old TV and you put a new TV in it and you'd play the snowboard of the skate videos. And the kid had come in and he'd be sitting down hanging. It would create a couple of dynamics. There's always kids in the store hanging out. You're walking by a mall. If there's a lot of people in the store, you go, oh, what's going on in there?

So he had the energy. driving them in. Also, the parent would sit there while the kids working around, you know, or maybe trying on a pair of shoes, but the parent might be sitting there talking to the employee and you're creating a dynamic with the parent, you know, we want you to feel comfortable in here and just, you know, what's going on? Yeah, I want to ask you about culture for a moment because you're in a business and you were growing a business in the 90s that really relied on a lot of teenagers and young adults, sort of college-age kids to make it work. I mean, and there's a lot of turnover and they're not always so reliable. And so would you hire a

specific type of person? I mean, you're looking for a kid who can hustle and sell. And so who was that kind of kid you were looking for? You know, sometimes he or she was in of the sport. And sometimes they weren't, but they had that, you know, if you have that natural talent, you can, you can see it. It isn't whether you're introverted or extroverted. You figure out if you're introverted how to overcome that. Obviously, I'm pretty extroverted. You can hear me yaking and getting a passion and falling into this. And you learn over time how to curate that kid to get the right kid that wants to work for you. And I go back, guy, and I could tell you it was a time in a grocery store when my store manager pulled me aside and I was just working really hard and he goes,

you're really good at what you do. I remember where I was in the store. His name was Bud, and it was in the produce aisle. I go, fuck, this is really important. Yeah. And we're getting towards the end of Christmas, and we're just like, come on, you've got to go, let's go, let's go. And I go, I got to create an event where I thank kids for what they do

because everybody's just leaving it and on the sales floor, right? They're just working, you know, retail hours, working to late, straight in the store, coming back the next morning, rotten weather. Sometimes you've got a cold and stuff and the pressure. So I decided, we decided, any kid that sold $100,000, I'm going to take them out to dinner. You know, basic thing to say thank you. $100,000 in a year? In a year.

One kid, $100,000. Wow, okay. Yeah, well, that was way back then. That was like five U.S. presidents ago. Yeah. And we built that up, became known as 100K, and the next year it was whatever. And then we said, oh, we're into snowboards. We're going to take them snowboarding.

we'll do an event on a mountain. So it was a, and this last year I had over 2,000 kids that sold over 100 grand. Wow. My number one employee sold over a million, a million, one employee. And so it's like two days of great parties, fun, a lot of prizes and a lot of stuff from action sports company. Saying thank you, but acknowledging you're good at what you do. I want to ask you about what happened in the sort of the late 90s because I feel like, kind of skater culture really exploded. I mean, there was Tony Hawk and, you know, obviously he's kind of the LeBron James of skateboarding, but things like the X game started, right? And so all of a sudden, and, you know, you start to see skateboarding events on ESPN and it becomes much more mainstream. You guys are really riding this. I mean, you're, you're out in front of it, but you're out there growing. And I wonder, I mean, around this time, and it may have started a little bit earlier, you guys got some.

pushback from skater culture, right? There were some people in the culture who would say Zumis isn't for real skaters, it's for posers, it's for people go to malls. It's not for the real authentic skaters who go to skate shops. Yeah. There was pushback. Usually it was from a competitive core skate shop. And I'm going to say it again, we weren't cheaper. The brands we got and the hard goods we got. We taught and trained our kid who was just as Core is a kid that worked in the local skater, snowboard shop, and skated or snowboard and rode the big mountain. We were not cheaper.

We had great product because I paid bills and we had perception what was coming. And our kids sold because they were units per transaction, dollars per transaction, dollar per hour. And there was a measure and a reward and a recognition around how they did that. You didn't care when people said you weren't, you weren't cool. You just thought that was just competitors trying to. People tell you you can't do stuff all your life. You keep doing, you know, look at it.

You keep pushing until they tell you no. And then you go back and, you know, always had a famous line. An old friend of mine, when the customer says no is when the sale begins. When we come back in just a moment, Azumi stayed alive during the pandemic. And why Tom thinks customers will keep coming to the store, even though malls are supposed to be dead. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz.

So it's around 2002, and Zumis is doing nearly $100 million a year in sales. And then it does two things a lot of growing companies do. It takes on its first big chunk of private equity, and then a few years after that, it goes public. I'm curious because you went public in 2005, and I think the IPO, raised about another $30 million. Yep, I think we had 250 stores. And Rick's running by then, so I'd go. And as the founder, I'd tell pretty much a different version or similar points what

you and I've been talking about. And then Rick talk about the vision. Yeah. You know, it's interesting because I've interviewed so many leaders and founders in the retail space over the last, you know, 10 years. And I remember I interviewed a former C of Macy's. And, you know, that's a tough business, right? It's JCPenney's where you started your career, right?

I don't, that's barely a shadow of itself today. People don't go into department stores in the United States as much as they used to. And this started to really happen, obviously, in the late 2000s when e-commerce really started to take off. And this inevitably was going to challenge a business like yours that was in shopping malls, right? Yes. and no. And the yes, of course, some of it went online, but we had a cultural experience inside Zumi's, and we were still fun and we were engaging. And it wasn't just the cheapest price. Right. And it wasn't just a convenience thing. That teenager, our 12 to 20, 12 to 24 year old

action sports kid, the art, lifestyle, street, whatever you want to call it. They still want to go into the shop. They still wanted to interact. know the mall traffic has dwindled, you know? Yeah, I mean, I tell you, March 2020, we closed all our stores around the world. One day, March 21st, whatever. We were one of very fruit retailers because we have a good balance sheet that we paid all our full-time employees. We still paid them.

All the part-timers, you furloughed them. They got unemployment in our country and, you know, they had to sort it out. And, of course, our online business went up, but not to make up for what we did in store. And we knew that. And after, you know, April and then middle of May, stores started to open it up again. That middle of May, we were the first ones open because we didn't lose our employees. We paid them and we worked at it. Kids want to hang out in stores.

They want to talk to an employee that thinks like them, dresses, you know, whatever. What's the music? What's going on? What's a sport? Yeah. You know? And we probably sell more skateboard product than anybody in the world now with them. Wow.

And it was our different stories in Europe and in Australia and U.S. and Canada. I know that you've got a Zumi's product line. And it's not the main driver of your revenue by any means. Yeah, it doesn't, we don't use the word Zumi's. We've never put Zumi's on it. You don't put Zumi's on, right? But I wonder, like, there must have been a time where you were really pushed to do that, where people said, we've got to just really lean into this because look at Abercrombie,

look at Arrow Postout, look at the gap. They've all, but in actual fact, it worked out well because those other brands had their own line and, of course, have problems, had trouble. You lose points on the margin, not being vertical, but you gain on the assortment plan where it's more diverse. And if this shit stops selling, you mark it down, you get rid of me, you don't go forward. We measure that. We measure new brands and how long we had on how many stores. We're measuring this stuff now all the time. and who can grow from 50 stores to 500 stores

and how it's different in Europe, you know, and there's brands that won't sell us, you know, still because, you know, they want to be more exclusive, which is fine. But we do a lot of private label in certain categories, like in denim and outerwear and stuff, and they're labels that, oh, my God, you know, I've got very cool pants.

Pants are really big with this right now under our gene label, Empire. because we pay attention to the action sports to the kid, the skater kid. Yeah, it's organized chaos, little like life. Tell me about this concept of organized chaos, this idea inside the store. Yeah, I think I was, I can't remember that was my term. Yeah, I've used it forever, you know, like a kid's bedroom or whatever. Just crap everywhere, stuff everywhere.

Yeah, we have a lot of product in our stores. If business is going good, you got, oh, you've got to add, you know, you started. with less categories. Then we added shoes and we added juniors and we added skate and we added snow. So organized chaos would be a store. There's a lot of action. There's a lot of color.

There's a lot of screens, you know, imprints of screens of what's going on. There'd be signage and something in store. But it's fun. It's edgy. It's trend right. We have a whole routine. We teach chaos.

Life a lot of times is chaos. We've learned how to love that, embrace that, use that, and grow, the chain. You have devoted a lot of your time and your dollars to different conservation efforts in the Arctic and Alaska and the Pacific Northwest, really, and on Capitol Hill and working with politicians to preserve the natural world. But I have a sort of a question about it that I wonder whether you sometimes something

you might wrestle with, which is the apparel business is one of the most postageal. polluting businesses in the world. It is full stop. I mean, and it's not just to make it and dumping all the pollution into rivers and streams, but to ship it across oceans to the United States. When people buy things, right, when people buy a lot of stuff, just by default, me, you, everybody listening, we produce carbon emissions because to make something, you've got to burn something, right? And I wonder how you wrestle with that. And I'm not asking you this to make you feel guilty, Tom, because I also eat meat and I pollute. I just being a human, you do that, right? So let me tell you how I think about it. I always say when I may be lobbying Congress on

climate, you know, I may be the biggest hypocrite in the room, but this is what we need to do. Yeah. I make stuff, oil-based products like shoes and clothing in Asia, put them on a diesel freighter, send them to Southern Cal, put them in my distribution center, split them to six, hundred stores, every state in the union. And then to go in and buy the product, you've got to get in a gas-fired car to go in there. So, well, I'm a hypocrite. I know my employees and my customers will tell you, yeah, but we need to do better, which turns out this year they did.

The biggest climate bill in the history of the world. So you have to do it as a country, and we have to do it as a world, like we have the big conferences around the world. And you see it in the auto industry and see it in transmission, lines, you can see it, and now we generate energy. And now that's happening with fabrics and inks on fabrics. For instance, now we do a lot of, it's called DTG Direct to Garment Printing, where we use sustainable inks and stuff and more a sustainable t-shirt. I am not St. Thomas. I am working, trying to shape this with the influence in Zimmies. We have a team that works on this,

but I think we can do better. You know, I know you, I, Listen to your interview with Shannard, Patagonia. He's the same way, right? He's doing it and trying to make it more sustainable. All our products, and we carry so much high percentage of brands, are not totally sustainable now, but they're working in that direction. One of the things I remember Yvonne Shinar said to me when I interviewed him was he doesn't want people to buy. And I believe him when he says this, he does not want people to buy a lot of his stuff.

He wants people to buy a jacket once and get a repaired. Yeah, it's a very different market strategy. He's totally vertical. He's his own brand. I could say, I'm going to be carbon neutral, and you're going to pay an extra $10 for every unit of clothing in our stores. And because how consumerism works and our markets works and economies work, it would be a very noble thing to do,

but you wouldn't be able to sustain that. You're in a mid-70s. I know you're not running the day-to-day of the, Sumis, but you're still very much involved. Like, how involved are you? Do you go to regular meetings? Do you get, you know, updates? So I do all the, I'm, I call myself the charge of the culture still, even though that's

not even total accurate. I'm following it all the time. Rick and I have great friendship. We're communicating on a regular basis. I'm the chairman of the board, so I'm in all the board meetings. I do all the major cultural events, the 100K and the managers retreat. And with the head of stores, with the head of buying team, I don't travel as much to stores because of my age, but still very, yeah, I'm still very engaged in what's going on. When you think about, you know, this brand and this business, I mean, culture around skating and around snowboarding is just grown and evolved.

And it's also a lot more diverse now. I remember when I was a kid, it seemed like most of the kids who were skaters were white. and now it's very different. Like I go to skate parks and you just see kids from all backgrounds and cultures. Yeah. So it was white

when we got into it in Pacific Northwest in the mid-80s. Now it's 600 stories. Zimmies with, I think we got 10, 12,000 Gen Zs this month, probably 10,000.

We are so multicultural as Hispanic, black, Asian, indigenous, pretty much 50-50, men, women, very welcoming place for LBGTQ and talking about all that. And because that's America, I'm really proud of that.

You know, you look in America, you're under 30. It is a minority-majority country now. We argue about the wrong things. We should be arguing about how we all become better, you know, how to grow this country with an incredible opportunity. If I can drive that employee to feel good about his or herself about what they're doing, you know, as the world changes and evolves and kids coming up have maybe an experience like I did, it would be a good thing.

Yeah. Tom, when you think about, you know, all that you've accomplished and achieved in your 74 years now, you know, starting pennies and above the belt and into a company, you know, a company with more than 700 stores and countries around the world and thousands of employees, I think 10,000 employees, most of them part time, of course, but it's a lot of people that's employed by the company. And then all the work that you've been able to do with your money, with the resources that you've made from this, you've been able to really spend it in ways that you've wanted to around conservation. How much of all of that do you attribute to how hard you worked in the intelligence and the strategy that you put in place?

And how much do you think has to do with just being lucky, just catching the skate surfway? This isn't luck. It has nothing to do with luck. That's not arrogant. It's not luck. It's about measured discipline, hard work going forward. Luck may be a very small part of it. It's hard work.

It's why not a lot of people do it because, you know, it's hard work. I mean, bad luck would have been a competitor that thought about it like I did. So two of them coming up at the same time. But it's, you know, America's got credible opportunity. My old man was a mailman. And now here I'm talking about, oh, yeah, I've got 700-some stories like Big Whop. Yeah. And I'm still here sitting there talking to you in this cold wet morning because I've been to retail 56 years.

I still love what I do. And, I mean, that goes to this day. I mean, I'm looking at comps what Zumi's did yesterday at 5 o'clock this morning. 44 years later. That's Tom Campion, co-founder of Zumis. And by the way, speaking of luck, in 1970, Tom had to register for the draft during the Vietnam War. He remembers his draft number. It was 248.

But that year, only men with numbers up to 219 were sent to fight in Vietnam. So Tom stayed home. And eight years later, he launched what would become Zunis. Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is H-I-B-T-I-D-Wondry.com. If you want to follow us on Twitter, our account is at How I Built This and mine is at Guy Raz. And on Instagram, we're at How I Built This and I'm at guy.org. This episode was produced by Casey Herman with music composed by Rumtine Arabley.

It was edited by Neva Grant with research help from Susanna Brown. Our production staff also includes J.C. Howard, Kira Joaquin, Carrie Thompson, Alex Chung, Sam Paulson, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. I'm Guy Raz and you've been listening to How I Built This.