Bob and Stewart Goldman Discuss the Future of Cels Enterprises & 50 Years of Family-Centered Business
Cels Enterprises Inc. is hitting the ultimate milestone: 50 years in the shoe business. With four brands — Chinese Laundry, Dirty Laundry, CL by Laundry and 42 Gold — currently under his umbrella, industry icon and founder Bob Goldman reflects on building his empire.
And at its center? Family.
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The company name, for instance, is an acronym for his wife, Carol, and their children — Elise, Lauren and Stewart — the latter of which has been the company’s COO since 2016. For the past five years or so, Stewart has been the company’s go-to as Goldman slowly hands over some of his leadership duties.
While family businesses are often known for conflict and chaos, at Cels, Bob has tried to achieve the opposite.
“It’s not difficult [to run a company with family] because you have to know who you are and who your children are and what the limitations are going into it,” he said. “If you understand that, it works. The key is they have to make mistakes and you have to eat those mistakes because that’s
how you learn. As long as you have the willingness and the integrity, that’s what makes it work.”
Bob has been steering the ship since the company’s inception in 1971, when he and Carol developed a self-service shoe display system called Modumode. Then in 1973, they launched footwear with the successful Buffalo sandal from Argentina. “That was my first shoe,” he said.
And it certainly was not the last.
Through the years, Bob has hit many markers of success, from the launch of the incredibly popular Macramé oxford that sold 13 million pairs in the 1970s, to teaming up with fashion tastemaker Kristin Cavallari in the 2010s.
His accomplishments and status in the shoe industry come down to how he cares for his own — and he has instilled that same ethos into his children as they take on the next 50 years of Cels.
“It’s about how do you treat people? And how do you get people to do the work for you? Because if you don’t treat them right, they’re not going to be there,” said Goldman. “So it’s all about family. And the family is the company, not just personal family.”
Here, Bob and Stewart sit down for a candid conversation on the future of the business, transitioning roles and the challenges ahead.
What does your day-to-day look like working alongside each other?
Stewart Goldman: “I would say we’re in the same office working together on projects a few hours every day. We have a very good dialogue, good rapport, we work very well together. We don’t always agree. We have different opinions sometimes, but for the most part, we see things very similar. I get that from him. My favorite compliment, which he doesn’t realize is a compliment … one day we were sitting together and he said to me, ‘Stewart, we should talk about something. I just got off the phone with this person and that person and everywhere I go, you’re involved. We need to figure out the focus.’ I said, ‘So you’re saying I’m doing my job.’ Because I’m involved in everything, looking at everything, which is exactly what I learned from him. There’s nothing in this business [he doesn’t know]. He could tell you what chips are in the chip machine in Ontario. What sodas shipped to the New York office. So yeah, I’m highly involved in every detail, seeing what’s going on and learning, because I’ve learned it from him.”
Bob Goldman: “The working relationship is [our] life. Every one of our children has worked in the business. And everybody gets into it in their own way. Like, Lauren [who leads product development] loved children’s shoes, so we tried children’s shoes. She always was grungy; she wore Dr. Martens to her bar mitzvah. So she started Dirty Laundry. On the other hand, Stewart I put in the scrubs of the business. He had to deal with the warehouse and the inventory at the warehouse.”
SG: “Do you remember my first day of work? I was 8 years old. My dad said, ‘Stewart, just sit in the warehouse.’ Remember, you had bought the new building right around the corner from La Cienega? And I decided to get on a forklift and crash it right smack in the middle.”
Stewart, did you always want to work in the business?
SG: “I’ve always wanted to be involved, just in different ways. I was maybe 12 or 13 and my
dad said, ‘Stewart, go with Uncle Murray to the swap meets.’ I would go to the swap meets and they would lay out tables, and we would have cases of shoes in a van, and I would sell. A few years later, when I was 16, 17, my dad decided he wanted me to learn to sell wholesale. He said, ‘You know enough about the business. I want you to start down and dirty, which is swap meets, close outs, off price. This is how you’re going to learn.’ I was so excited. I sold 14 cases of shoes.”
How do your experiences as leaders differ?
BG: “I started scrapping. He doesn’t have to scrap. He’s got a team in place. He’s looking at tomorrow. And the biggest thing is, we made terrible mistakes in the industry for years, of owning inventory to the 2 million level, but fortunately, it put us in the real estate business.”
SG: “There’s no bigger black swan than Bob. Because Bob created a business that has massive inventory that, theoretically, a private company can hold. Because of it, we acquired hundreds of thousands of square feet of warehouse space. That’s worth hundreds of millions of dollars. We’re in the shoe business, but we’re also in the real estate business. We needed a warehouse to store the goods. So it worked out very, very well. And the business has changed with the amount of dropship, internet business, and the growth there and the consumer.”
What is your biggest concern with the state of the industry?
BG: “I believe in opportunities. I believe that the opportunity is greater today than ever in the industry. That things are changing, and I love changes. It’s the only reason I’m still doing what I do. Being a private company gives us access to tremendous advantages, because we don’t have to deal with Wall Street. We don’t have to deal with corporate structures. We deal with the consumer and what she wants. That’s what the whole company is based on. Whatever the product you deliver, it has to be what the consumer wants, not what the [retail] buyer wants. And throughout my years, I’ve always told the buyers what I believe, and I’m right more than I’m wrong.”
What do you want for the future of the business?
BG: “It’s the future of the family. The people who have helped build this, they have their future. Every seven years, [this business is] changing, retail practices are different. We make sure that Stewart and Lauren really look at that. We can’t be satisfied with today. I always look for the white spots in the business, and that’s where the opportunity is.”
Where are those white spots right now?
BG: “Product that today’s consumer wants: comfort, flexibility, value. She now has a four-day, three-day work week, so it’s about sneakers and casual. We must make sure that the competition and ourselves don’t have the same product at the same time. We must be first in the market.”
What are your thoughts on the ever-changing digital landscape?
BG: “We’ve been in e-commerce since 1996. We started only servicing returns. We told the public, ‘If you bought our shoes and they were defective, send that to us. We’ll send you another pair.’ And we had demand to go online. The e-commerce business was phenomenal from 1998 to 2008. And in 2008, it corrupted between returns and discounting and all of that. From 2008 to 2017, the world was there. We developed a relationship with customers on the wholesale side and one of them was a company called Shoedazzle. We made all the private-label product for them and we learned a lot of lessons. Now it’s changing again — the returns and the profitability and cost of doing e-commerce is changing, and we have to change. We’ve got new systems and new operation modes. We’re looking at the future of how to bring down the costs and make it more profitable.”
How is Cels changing now?
SG: “It’s simple. We’ve got multiple brands that have separate identities and, to some extent, they’ve been blended into the same pool. We’re now formalizing a plan that gives them a separate identity, website, vision, look and feel, so they have their own customer base. Because, as my father always says, you have different businesses: You’ve got your private-label business, you’ve got four different brands. They’re not all the same, so creating separation is good. The market itself has changed a lot through COVID. It was almost exclusively dropship because people weren’t going into stores. So that was a requirement, which then put us forward into realizing that we need to upgrade our systems and get our technology more advanced, which we’re in the middle [of doing now]. That’s going to be a great thing in the end when it’s done. You know, the business modifies a lot, and one of those modifications, in my opinion, is the voice of the end consumer. The customer is almost the buyers because they have so much more power, so much more input into what’s going on.”
BG: “My concept has always been a brand has to have recognition for who it is. The challenge is: Who is the consumer you can do the best job with? Then, understanding each dimension. The business is really sticking to those separate agendas.”
Bob, how does it feel to let go of the reins as Stewart takes on more responsibility?
BG: “Believe me, I have a lot of things I like to do. So as long as the profitability is there, then you don’t have to hold on to anything.”
SG: “A few years back, my father said to me, ‘Here are the keys to the kingdom, do whatever you want. It’s your time. It’s your decision. I will support whatever you make.’ He said, ‘I’ll tell you if I think it’s wrong. I will tell you if I think it should have been different, but it’s your decision.’ And he’s been fantastic. Sometimes, when I think the risk versus reward is questionable, I’ll sit with him and ask for his thoughts. Sometimes my father will look at me and say he disagrees. And I’ll say well, ‘That’s great. I’m going to do it anyway.’ And I’ve done it. Sometimes we see eye-to-eye and it’s perfect. And sometimes he’ll show me something I didn’t see.”
How does it feel for you to be stepping into your father’s footsteps?
SG: “I don’t feel pressure. I feel proud. My father’s done an amazing job. My father’s brilliant; really, he’s amazing. He’s an icon in the industry. I look at what he’s done. And then I look at the current business environment. I’ve been heavily involved in infrastructure operations, facilitating and trying to convert an industry that has changed and a business that needs to change to catch up to where the industry is today.”
What has been your dad’s best advice?
SG: “Honestly, one of them is his favorite saying, ‘A to Z.’ Slow down, take a look at it before you make a decision. Because I’m pretty quick. I’ll look at it and I’ll analyze it. And I’ve basically learned to make the exact same decision, but slow it down for a minute and analyze it.”
BG: “It’s all about follow through. The ideas are great. Everybody has the opportunity. It’s how do you grab the opportunity to make it work? That’s what the success is.”
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