That goal, in fact, hasn't wavered since the day Stroud opened the first Strouds Linen Warehouse in Pasadena, California, in 1979. Compared with the 20,000-square-foot superstores the company now favors, the original 4,400-square-foot location was humble. "We used a lot of unfinished wooden shelving and no carpet," Stroud recalls. "To make the most of our floor space, we displayed merchandise on wall shelves. All in all, it was pretty bare-bones."
Finances dictated frugality. Although Stroud started with a healthy half-million dollars-pulled together via a second mortgage, his pension plan and investments from a few friends-his intention was to open two stores in rapid succession, first in Pasadena, just north of Los Angeles, and a month later in Torrance, to the south. "We needed that much money to buy inventory and fixtures for two stores," Stroud says. "Our idea was to offer a wide selection, so we couldn't cut back on the merchandise."
Stroud's transition from executive to entrepreneur went smoothly, although it required some flexibility. In his new role, Stroud continued to be a decision maker. But his job didn't stop there. Stroud also found himself having to convince vendors he was a serious contender.
As a representative of a major department store account, Stroud had received the royal treatment from vendors. As a start-up entrepreneur, however, he found that attitude changed. "In the very beginning, he would go in to meet with vendors at their showrooms, and they would always give him the last meeting of the day," recalls Jeff Stroud, 34, one of Stroud's sons and the company's director of merchandising for housewares and decorative tabletop.
Vendors, in fact, weren't all that happy to do business with Stroud at the outset. "Department stores didn't want us selling the same merchandise for less," Jeff explains. "They put pressure on our vendors, and a few vendors even stopped doing business with us temporarily. But we quickly became so successful that the vendors stood up to the department stores and said, 'We're going to do this anyway.' They loved Strouds because we were putting in a full assortment that did their products justice, while the department stores were always editing."