Gardener's Supply Company new leadership team (from left to right): Christie Kane, Vice President of Human Resources and Information Technology, Max Harris, Chief Marketing Officer, Rebecca Gray, Vice President of Merchandising, Cindy Turcot, President, Jim Feinson, Chief Executive Officer, Gina Bernadet, Chief Operations Officer
by Don Jamison, Vermont Employee Ownership Center “2018 was a transformative year for us,” says Cindy Turcot, one of the original employees and now President of Burlington-based Gardener’s Supply Company. A national retailer, Gardener’s Supply is one of Vermont’s best-known companies, a leader in the socially-responsible business community, and 100 percent employee-owned through an Employee Stock Ownership Plan (ESOP). Part of what made 2018 exciting at the company were some major changes: a reorganization of leadership, acquisition of Longacres Nursery Center in Lebanon, NH, and its grand reopening as Gardener’s Supply’s third retail location, and, last but not least, recognition as the national ESOP Company of the Year.
That award was announced in May in Washington DC during The ESOP Association’s Annual Conference by Association President Michael Keeling who described Gardener’s Supply as “a prime example of an ESOP company that actively engages its employee owners, the employee ownership community, and elected officials at the state and federal levels. Its commitment to sharing with others the power of ESOPs is an example all ESOP companies can proudly seek to replicate.”
The depth of the ownership culture at Gardener’s Supply is partly explained by the fact that its ESOP was introduced by founder Will Raap in 1987, when the company was only a few years old. Most ESOPs are created later in a company’s life, as a means of buying out a retiring owners’ shares, but the main purpose of the ESOP at Gardener’s Supply was shared ownership. Raap wanted employees to have a direct connection to the work they do and the value they receive for that work, believing that if they have ownership in the company, the happier and more productive all would be. Through the ESOP, employees receive annual distributions of company stock in their ESOP retirement accounts and thereby share in the wealth created by the company.
The ESOP grew slowly over the years, achieving ownership of 100% of company stock only in 2009, but even when the ESOP held only a small minority of stock, it had a powerful effect on life at work. Divisional Merchandise Manager Cindy Goodenow, who has been sourcing product for Gardener’s Supply for the last 31 years recalls: “When the announcement was made that we would become an ESOP company, employees were excited that we were going to get a piece of the pie, and that we were part of the bigger picture of our business. If we all did our jobs to the best of our ability, we would be contributing to the success of the company, and in return would be sharing in the rewards that would come with that success. In other words, it wasn’t just the management team that would be successful, all of us would be successful.”
The presence of employee ownership also made possible a different kind of future for the company. Since the ESOP provided an internal market for his shares, Will Raap had an alternative to selling to a strategic buyer or private equity fund when it came time for him to exit. Because his shares were acquired by the ESOP, Gardener’s Supply and its jobs have remained in Vermont, an outcome that would have been unlikely otherwise.
But this happy result is far from the last chapter. There are challenges for companies that are employee-owned and hope to remain so. Like any company, they need to respond to the ever-changing market in innovative ways, under dynamic leaders who have all the business savvy of their competitors but who also embrace the company’s culture.
In April, Gardener’s Supply announced changes to its organizational structure and management team. As CEO Jim Feinson put it, “Gardener’s Supply has had to reinvent ourselves over the years to adapt to a changing retail landscape. This shift is another step to better serve our evolving market and customer base.” Turcot, in her new role as President, will focus on continuing to grow the catalog and online commerce operations, while Feinson will concentrate on expanding the company’s retail division. The company now has three retail locations, in Burlington and Williston, VT, and Lebanon, NH, and is actively pursuing the acquisition of additional garden centers. And that creates another challenge: how to preserve the best features of the way those companies have operated over the years, while integrating them into Gardener’s Supply’s way of doing business, both operationally and culturally.
In recent years, many employee-owned companies like Gardener’s Supply have grown by acquiring other companies. One that is known for addressing the integration challenge especially well is Massachusetts-based Web Industries which has acquired many companies, including Vermont’s CAD Cut in 2013. According to CAD Cut’s General Manager, Ben Winters: “The acquisition of additional businesses has proven to be an excellent vehicle for Web’s growth. It was important for us to have a well-executed transition plan with a lot of focus on employee ownership culture and engagement that didn’t take away the things that made CAD Cut a special business before the acquisition. While it has been a journey, Web’s ‘CAD Cut’ team has embraced employee ownership and all that comes with it.”
When the purchase of Longacres’ Nursery Center was announced, Feinson said, “The Longacre family has been serving this community for decades and we will continue that tradition while bringing Gardener’s special brand of innovative products, community support, and signature, quality service.” And how is it going so far? According to Melissa Longacre, who worked at her family’s nursery for 35 years and is now part of the Gardener’s Supply team, “It has been a wonderful experience to watch our family business transition to a more modern and innovative business model. Employees are encouraged to be involved and participate on a deeper level. It feels like the family has grown even larger.”