The Container Store is SOLD!

Well, it happened. I guess the rumors were true. The Container Store, many an organizer's favorite retailer, has been sold to Leonard Green & Partners, LP.  The Los Angeles based private equity firm, which also holds 35 other companies, has promised to "preserve [The Container Store's] unique culture" which I suppose remains to be seen. Cynical, aren't I? Sadly, and too often...

companies whose brands are carefully crafted and solidly built over time, fall to pieces upon acquisition. This is because the principles on which the brand was built are abandoned in favor of putting marginally higher profits before people, and valuing bottom line before brand experience. (see Mindspring for one good example)

Granted, private equity firms are in the business of turning a profit. Aren't we all? I'm an enthusiastic capitalist myself. However, what many equity firms and larger companies fail to realize  is that companies like The Container Store are profitable because of their strong brand, their culture and the excellence they consistently deliver, not in spite of those things.  Shifting focus away from these crucial factors can doom otherwise powerhouse brand that dominates the marketplace.

You can read more about the acquisition here. And between you and me, I really hope Leonard Green & Partners doesn't make the mistake that Earthlink made when it acquired Charles Brewer's ISP brainchild, Mindspring, in letting the founding principles of the company fall by the wayside.

For The Container Store to lose its uniqueness, to weaken its brand promise and slip into the mediocrity that retail customers experience daily at other stores would be a real shame. I have a feeling the eyes of all The Container Store's rabidly loyal customers, employees and thousands of organizing experts will be watching this acquisition closely and for me, the jury will remain out until further notice.

Comments

[Jeri Dansky]

Hi Monica,

I share your concerns. The Container Store has always provided good products and exceptional service - and I liked supporting a store that I knew treated its employees well. I sure hope that continues, but I too am skeptical.

Regarding Earthlink: When I first signed up with them, they also had exceptional service - wonderful tech support staff. Then they got rid of all those great support folks, and now the company is just another poor quality ISP. Sad, sad, sad.

Jeri

[Monica Ricci]

Jeri, when I first jumped on the Internet back in 96, I was a Mindspring customer. They were awesome. Once Earthlink acquired them, my experience slowly started to change until finally there was no shred of anything Mindspring left at all.

Mindspring had a really strong, positive corporate culture that really translated and trickled down to create a wonderful customer experience. All that just fell apart once they were acquired. Bummer.
~Monica

[gayle]

Unfortunately, corporate culture often pushes the customer experience aside for bottom-line dollars. For all they spend on their branding programs, you'd think they would actually listen to the people who frequent their services.

You can find some inspiration at tompeters.com. He's all about EXCELLENCE, and has a great blog. Much more than business advice, and his commenters really make you think.

[Monica Ricci]

Gayle, you're right and it's a shame. Sometimes companies spend millions of dollars on what they "think" is branding, but is actually advertising. You can't advertise your way to marketshare or mindshare -- you must create a strong, pervasive brand that your employees understand, embrace and project both internally and externally.
~Monica

[Catten]

Oh NO!!! We're still waiting for a Container Store to come to our town. (Not that I mind going to Portland or Houston or Atlanta to do my shopping, but with a two-bag limit at the airport, I must show great restraint.)

Sigh.

Cat

[Fred]

I work at The Container Store part-time and absolutely nothing has changed. Not one thing since LG took over. Some efficiencies have been put in place regarding inventory and delivery, etc but the culture is exactly the same as it was under the founders (one of whom is still President of TCS). Expansion will be the only change in the foreseeable future. Instead of 1 or 2 new stores a year, TCS will be opening 5 to 6 stores. And with only 41 store in the US, there is plenty of room for expansion.

[Monica Ricci]

Fred, that is good news, and thanks for being our insider source!! :)

~Monica