Extreme Makeovers from demolition to reconstruction, here’s how two retail florists changed the faces of their businesses. by Kelsey E. Lowe-Smith. In the business world, change is constant, and florists often must adapt to new ideas, shop layouts and even locations in order to grow their businesses. Tiger Lily Florist in Charleston, S.C., and Walter Knoll Florist in St. Louis, Mo., are just two examples of florists that have embraced the evolutions of their businesses and made moves for the better—major geographic moves, that is. Tiger Lily Florist Manny Gonzales, who has owned Tiger Lily Florist with his wife, Clara, for the past nine years, says the duo was comfortable in their former location, a 6,000-square-foot shop in downtown Charleston, S.C. It was their second location, and they enjoyed approximately 22-percent sales growth each year. When their first five-year lease was about to expire however, they took a critical look at their progress as well as their potential. “Everything was going great, and we were happy there,” Mr. Gonzales says. “Our first instinct was to renew the lease, but then, … we felt like we should look around and see what’s available.” Opportunity was around the corner and just down the street from a grocery store to which Tiger Lily Florist makes weekly deliveries. Mr. Gonzales frequently got caught at a stoplight, next to a vacant corner gas station. The station was built in the 1920s, when the automobile was in its golden age and Spring Street, where the station is located, was the main thoroughfare along the East Coast through Charleston. “The word on the street was that it was contaminated, it was abandoned, it was in a bad neighborhood and it was ready to collapse,” Mr. Gonzales says. “But it was such a unique, cool building. They just don’t build them like that anymore.” One day in July 2003, almost as if fate had taken over the driver’s seat, Mr. Gonzales was, once again, stuck at the stoplight beside the gas station. Only this time, it was following a meeting with his accountant, who had suggested that Tiger Lily Florist buy its own building rather than continue to rent. And the “Under Contract” words on the “For Sale” sign had been removed, indicating that another deal had fallen through. Mr. Gonzales picked up his phone right then and called the realtor. Since so many deals had not worked out, the price had just been reduced from $750,000 to $595,000. The next day, Mr. and Mrs. Gonzales went to look at the building. Despite seeing abandoned gas tanks, rags, tattered clothing and many other less-than-sterile things, they had a perfect vision of where the design room, consultation room, offices, etc. could go. Doing the math the next step was to figure out if this venture made good financial sense. A few clicks on a mortgage company’s online mortgage calculator showed them that, at $550,000 to buy the building and another $350,000 to $400,000 to get it up and running, over 20 years, with interest, it was about the same amount they were paying for rent. “The numbers were staggering,” Mr. Gonzales relates. “And a lot of florists can do this, including a lot who don’t think they can.” Another thing that greatly helped with the Gonzales family’s decision to buy the old building was the discovery that it had been pre-approved for a $1 million clean-up under a state Superb Fund. This fund gives grants to owners of buildings such as old gas stations to clean up the sites and make them useful, tax-generating properties once again. And to top that off, the City of Charleston’s Renewal Community Program offers lucrative tax incentives to businesses that re-establish abandoned properties. Despite the great luck Tiger Lily was having financially, however, it faced much resistance from preservationists. “Charleston, being a historic city, is very big on building preservation, so getting it approved with the Charleston Architectural Review Board was excruciating,” Mr. Gonzales confides. “A lot of people wanted it to be refurbished, but they were fanatical about how it would be refurbished. Some people would rather have seen the building contaminated and abandoned than to see it transformed, even minimally, into something else.” Open To Change Following a grueling permit process that took four months, construction was complete in only eight weeks, meeting the deadline Mr. Gonzales set: just two weeks before Valentine’s Day 2004. “Once we got the permits, there were 30 to 40 people out there working on it every day,” he relates. The most major change to the building was the transformation from an “L” shape to a rectangle. The entire new addition, about 3,000 square feet of the now 8,000-square-foot building, became the design room. With cinder block walls and an exposed beam and duct ceiling, the addition is utilitarian, but it also was relatively inexpensive. Before pouring the concrete floor, workers installed drain pipes at a cost of $300. The business spent another $300 to run water pipes through the ceiling rafters to each of the 13 design stations. Mr. Gonzales says these features have greatly helped increase designers’ productivity. Three major changes took place in the original part of the building. First, concrete was poured to raise the floor about 2 feet, making it flush with the existing office space and lessening the possibility of flooding. The concrete was stamped to look like a garden walkway, which, along with a new stamped tin drop ceiling, adds a great deal of ambience to the structure. The final change was the addition of glass windows to the arched openings of the original service bays. Three of the former service bays are now storage rooms in the back of the design room. Other former drive-in areas have been turned into the administrative area, where designers write proposals and office personnel take phone orders and process tickets. In addition, Mrs. Gonzales’ office doubles as the consultation room. Its windows face the design studio, with the bottom halves frosted so that customers can’t see leaves and other materials that fall to the floor. “Our design studio is very open,” Mr. Gonzales says. “As people are sitting with the designers, discussing their events, they’re seeing massive floral arrangements moving back and forth in the design studio, and it really gives them a sense that they’re somewhere special.” The showroom is located in the front left corner of the shop. At 700 square feet—30-percent smaller than the business’ former 1,000-square-foot showroom—it reflects the streamlined approach that the revitalized business has taken with its inventory. Tiger Lily, which used to carry a full selection of giftware and other add-ons, now offers only fresh flowers, plants and containers. Mr. Gonzales says that not having balloons, plush toys and other gifts allows him to focus solely on his main mission as a florist—to provide awesome flowers. “Our average arrangement is $65 to $75, and most of our flowers are outside the cooler,” he shares. “We chill them at night, and in the daytime we build a ‘flower tower’ in the middle of the showroom.” Unexpected Buzz Tiger Lily’s owners anticipated a decrease in annual sales, at least for the first year after the store was open. “We were prepared for a 10-percent downturn in sales for the year, with people not wanting to come to the new location or not knowing where it was, but [the remodel] created quite a buzz,” Mr. Gonzales says. “Instead of a 10-percent downturn, we were up 32 percent for the year.” He attributes this upswing not only to the building but also to the publicity that surrounded the new shop’s opening. It won a few architectural awards and had write-ups in several Charleston publications. And, in addition to receiving the honor of “Best Florist in Charleston” for the fifth year in a row last year, Tiger Lily received the top honor as Charleston’s 2004 Small Business of the Year. Mr. Gonzales says Tiger Lily’s new corner location, which sees lots of foot and automobile traffic, has given the business greater visibility than he imagined. “As people drive home every day, they might not stop in or call, but when they need flowers, they’re going to immediately think of that flower shop where they always get stuck at the light.” WALTER KNOLL FLORIST For Walter Knoll Florist, currently run by the fourth and fifth generations of the Knoll family, new locations are nothing new. The full-service Saint Louis, MO, florist, which opened in 1883, encompasses seven retail and two wholesale locations. The most recent move, however, was its biggest, both in size and scope. A new 70,000-square-foot design, call and delivery center, which also houses one of the business’ wholesale divisions—called Harold’s Wholesale Florist—and one of the retail stores, is helping the florist maximize efficiency in all aspects of the business, according to Vice President Walter Knoll III. The center is located on LaSalle Street, dubbed “St. Louis Florist Row,” in downtown St. Louis, and it neighbors five other wholesale distributors and four retail florists. Walter Knoll Florist occupies seven buildings that formerly housed the failed St. Louis Wholesale Plant, which had gone into foreclosure. The family worked out a deal with the city and state called a TIF (Tax Incremental Financing) and first leased the buildings in the summer of 2002 before buying them in spring 2003. The main building, which encompasses 20,000 square feet, was built in 1996, but several others were old and run-down. Two main phases of renovation have taken place since the move, and several smaller-scale projects have been ongoing. Altogether, the three-year renovation project involved knocking down two buildings, building two new ones and renovating three others. Most of the buildings are now connected. BUILDING INFRASTRUCTURE The first phase of the renovation project, which actually began while the florist was still leasing the buildings, involved knocking down two old greenhouses and completing a variety of projects to make the complex of buildings suitable to accommodate approximately 120 employees. An employee lounge, which can seat approximately 30 people at a time for lunch, was one addition. The florist also added two restrooms in the main building and renovated a couple more. New offices, none of which existed when Walter Knoll Florist first leased the building, include an operations office, a customer service/call center, a training room, accounts payable and receivable offices and a computer room. Next came several other new features including an 8,000-square-foot, 18-vehicle vanport, where company vehicles are parked when not in use. The vanport also includes a place for the vans to be washed, with a built-in pressure washer and a shop vacuum. Mr. Knoll explains that the drivers wash every truck every day, a practice that contributes to a highly professional presentation. He adds that the facility is a tremendous asset during the winter, when Midwest temperatures often are bitterly cold. KEEPING IT COOL The main building, although mostly open in layout, was full of shelving and needed refrigeration. The Knoll family added two large coolers—one that is 40 feet by 50 feet, which is devoted to storing cut flowers, ready-made arrangements and pieces that are waiting for delivery, and one that is 30 feet by 40 feet, which is used for receiving. In addition, the design room features 30 feet of open-air cooling. This allows the flowers that the designers use to be refrigerated right up until they are used but provides easy access to them. Designers simply reach in and take the flowers, much like one would buy produce at a grocery store. The same convenience also applies to hard goods. “We pointed all of the aisles toward the design room, so that the designers can walk and get whatever they need, whether it’s containers or foam or balloons,” Mr. Knoll says. “They are basically at the hub, where they can go into the backstock and pull things quickly.” LESSONS LEARNED Mr. Knoll cautions other florists who are preparing to renovate their buildings to have a plan of action for keeping business ongoing during the disruptive period. “The most challenging aspect is keeping the regular business running,” he confirms. “We had done the construction of Phase I pretty much ourselves. We hired carpenters and contractors, of course, but we were the project managers. When we were up to our elbows in the construction and the planning, the details for our regular business suffered.” To ensure that this did not happen again, the Knoll family hired a general contractor for the second major phase, which began the day after Mother’s Day 2004. That phase got off to a slow start, with an unexpected problem. While digging into the ground of the two-story workshop/warehouse, workers found that it, as well as the administration building, did not not have proper footings. Soil tests, visits from engineers and the process of getting bids for the project delayed it for about a month and a half and cost the business $80,000 to put in foundations. Although Mr. Knoll says it’s too soon to tell if the $3 million project was worth it, he and his family are confident that they are set up for where they must be in the competitive future. “Every year, there are fewer and fewer ‘mom and pop’ florists,” he says, “so what it really is going to take to be one of the consolidated survivors is great product at a reasonable value with excellent branding and wonderful service. And if we are to be a player, we really need to have an infrastructure in place that allows us to perform that well.”