Family Business Evolves to meet Demands of Market
Charleston Regional Business Journal
Family Business Evolves to meet Demands of Market
By Dan McCue, Staff Writer
Tony Moluf pointed to a 60-year-old advertisement framed in one of his two expansive plumbing and kitchen supply showrooms and with a chuckle opined that if one manages to stay in business long enough, eventually almost everything old will be new again.
“You see that sink, that tub,” he said, gesturing to the yellowed newsprint and fixtures that would not have looked out of place in an old James Cagney movie. “Today, replicas of those pieces are highly prized by designers for the high-end homes that are springing up all around Charleston.”
Turning to his father, George, the founder of Moluf’s and at 92 still a daily presence at its East Bay Street location, Moluf smiled.
“Who’d have thought?” Tony Moluf said.
While it would have been easy to get caught up in all the shower fixtures, sinks and granite counter tops that sparkled under the showroom lights, the story of Moluf’s is really more the story of a family and of a distinct slice of Charleston’s retail life.
George Moluf’s parents were Lebanese immigrants who entered America at Ellis Island in New York and quickly made their way to Charleston, where members of the family had already settled, and to King Street, where several Lebanese immigrants were already engaged in the retail trade.
“Basically, that’s what that generation of immigrants did,” Tony Moluf said of his grandparents. “You came to America and, if you were lucky, you attained a measure of success as a merchant.”
Their son George Moluf initially went to work at Sears in 1934 and opted to work in the plumbing rather than automotive accessory department. Six years later, he opened his first plumbing showroom on Meeting Street.
After serving in the U.S. Coast Guard during World War II, George Moluf moved the business to Charlotte Street. Anticipating changes on the city’s waterfront, changes that would ultimately necessitate a relocation of the business, he acquired the land for his East Bay Street location in 1955, but he didn’t move there until 1971.
By that time, an adjoining lot had become available, and he quickly bought it, using it to house the business’ pipe inventory and trucks.
Son takes over, expands business
“This is probably the only real job I ever had,” said Tony Moluf, who began working for his father while still in the high school and joined the business full-time upon graduating from college in 1974.
Tony Moluf always saw his father’s business as “something that was there for me,” he said.
“Plus I wanted to live in Charleston, and job opportunities in town weren’t as plentiful as they are today,” he said of his decision to enter the family business. “Plus, I thought it was real neat to work with my father.”
Given those feelings, succession was never an issue at Moluf’s as it is for many family businesses. However, surviving a natural disaster was.
In September 1989, Hurricane Hugo destroyed Moluf’s building; oddly, it also provided the business with opportunities for rebirth and reinvention that continue to this day.
“Hugo changed Charleston,” Tony Moluf said. “After it, people from up North began buying up beachfront property, and with them came a gradual change in taste and in the kinds of people who ventured into our business.”
But Charleston’s revival after the hurricane didn’t happen in isolation. In fact, a huge home remodeling boom, typified by cable’s Home & Garden Television channel and scores of home-related publications on swelling magazine racks, accompanied the change.
As the newcomers arrived, they wanted their kitchens and bathrooms to be more significant components of their homes, Tony Moluf said. That meant high-end fixtures and a new customer base. While plumbers and other contractors continued to visit the shop counter, an increasing number of women, often accompanied by their home designers, began visiting the showroom.
“My father had the foresight to include a 10,000-square-foot showroom when he was designing the building, and I can still remember the avocado and copper colored fixtures that were dominant at the time,” Tony Moluf said. “However, after Hugo I quickly found that we needed more space and more diversity. I doubled the size of the showroom in 1993, and it seems like no matter what I put in there, it sells.”
Tony Moluf also began to hire women to work in the showroom, women steeped in the latest developments promulgated by the American Society of Interior Designers.
Business planning eases transitions
Massaging the business to accommodate changing tastes and trends is one reason why Moluf’s continues to prosper; so too is sound business planning at each stage of the business’s life.
Chris Nowell, a principal with Jarrard, Nowell & Russell LLC, and Moluf’s longtime accountant, said one thing father and son did right was to deal with the issue of succession over time.
“They knew Tony was going to take over the business, which is a C corporation (whose) ownership is valued as stocks, and basically what they did is slowly begin transferring those stocks from father to son,” Nowell said. “The same thing can be done with any LLC, but in that case what you’d do is change the LLC to a multipartner LLC and transfer the elder’s ownership interest to the younger family member. The key is what you own or control.
“In this case, once Tony held more than 50% of the C corporation stock, he effectively owned the business and his father had a minority stack,” Nowell said. “Now, given the age of Tony and his children, one of whom is at the University of South Carolina now, it’s probably time to start thinking about another slow transition to the next generation.”
Unlike other businesses, where the accountant will simply be the guy who does the books, Tony Moluf said he often turns to Nowell for business advice.
For his part, Nowell said Tony Moluf is well ahead of the curve in regard to most aspects of his competitive industry, and what he needs is a sounding board, something managers of larger companies readily have access to, but is a luxury for the small business owner.
“Basically, given that Moluf’s competition has grown from two or three other businesses to seven or eight over the years, I think of my advice as kind of like blocking and tackling in football,” Nowell said. “I always tell him, don’t have too much debt, too much inventory. By all means, continue to emphasize customer service, and continue to pay your employees fairly.”
Tony Moluf likes to run various business scenarios by Nowell, drawing on the accountant’s experience of looking at the health of the general economy and the home furnishing business as a whole, he said.
“We talk as often as I feel the need. Chris has my cell phone number and I have his, and it’s helpful to talk to someone who understands business beyond the numbers,” he said.
As for the question of succession, Tony Moluf said while he intends to follow his father’s example and effectively never retire, he does think from time to time about his son and daughter and whether they’ll one day follow in his footsteps.
“You know, for me, my father’s business was a touchstone, a place I went and spent a lot of time at as a young person, and today it’s the same way for my children. My daughter’s often here in another office doing her homework. As for my son, right now his mind is on college and football,” Tony Moluf said. “However it plays out, when the day comes, I think the decision is going to have to come from them, just as it came from me in my time.”
Leave a Comment
You must be logged in to post a comment.