Name: Crate & Barrel Wants You To Know They Are Much More Than Crates & Barrels | Behind the Business
Uploaded: 2025-12-19
Duration: 10 min 20 s

Crate & Barrel is evolving from a home furnishings importer into a multi-hyphenate design, B2B and AI-assisted powerhouse, with plans on expanding its retail footprint while using new technology to change the way customers shop online. As geo-political shakeups in trade and supply chains challenge the businesses’ operations, CEO Janet Hayes says the company is focusing on offering high quality products to forge ahead.

Crate & Barrel Wants You To Know They Are Much More Than Crates & Barrels | Behind the Business

Features

I would have never believed if someone said 5 years from now the company is going to grow over 55%. You're going to triple the bottom line. Long known for wedding registries and modern home decor, Crate and Barrel has grown into a $2.5 billion powerhouse. We've been Reinventing our retail fleet and really doubling down and investing now against a backdrop of tariff headwinds and supply chain volatility, the company is focused on new consumer touchpoints and delivering tech-driven speed under the leadership of CEO Janet Hayes. As the next generation buys fewer homes and online options multiply, how can Crate and Barrel win in the consumer wars? You can see this kind of iconic picture here of the crates and barrels and hence the name started to form. Somebody walked in and said, What's the name of the store? And they just kind of said, I think it's Crate and Barrel, and that's where the name came from. Crate and Barrel was founded in 1962 by Gordon and Carol Siegel as a way to bring Americans high quality home furnishings from around. The world. This is what we call our atrium, which I think is so beautiful. It has since expanded into a multi-hyphenate brand, offering design services, catering to kids, and curating gifts. The German retail company Auto Group bought a majority of Crate and Barrel in 1998. By 2011, Otto Group was Crate and Barrel's sole owner. Despite revenue losses for Otto Group this year, Crate and Barrel was a significant driver of the company's positive earnings. Janet Hayes took the helm in August of 2020, 1 of the most uncertain times in the company's history. In the five years since, they've dealt with three major crises a global pandemic, supply chain turbulence, and the current geopolitical pressures of tariffs. Each time we come out stronger, I would have never believed if someone said five years from now the company is going to grow over 55%. You're going to triple the bottom line. A key part of Hayes's strategy has been in diversifying the company's customer base, growing various streams of revenue while staying focused on Crate and Barrel's core brand identity. Can you walk me through each of your brands and give me a sense of which ones are your biggest revenue drivers? Uh, we'll start with the Crate and Barrel brand. That brand I think most know, and if you ask someone on the street, they'd. Probably pull up a really warm memory of oh I registered there it starts kind of at the beginning of that registry and has grown into quite a big brand and then there's CB2 which is going through in my opinion, a really beautiful evolution. It's much more kind of design focused than crate and barrel, meaning appealing to the trade. They don't have in-house design. They use designers around the world. Then there's Crate and Kids kind of fulfills a couple of rooms in the house that we weren't kidding and really has an aesthetic that matches the crate brand. We also have Hudson Grace, which is a really beautiful, entertaining, and gift brand. And then we are bringing up a couple of other new brands as we are talking, not allowed to be out yet. The company is now doubling down on these 3 pillars. Investing in new technologies, expanding its retail footprint, and broadening its customer base beyond the individual consumer. What will come up pretty big in the next couple of years is our B2B business and our franchise business expanding globally. Oh, tell me about those. So the B2B business one I'm really excited about, we're one of the few companies that can do a whole home or a whole restaurant or a whole hotel from our brands and deliver a really different aesthetic. When you start to put all the different brands together, when thinking about the retail home furnishing landscape, a lot of different players out there, of course, you know, you associate IKEA with like the affordable, accessible designs, restoration hardware, the luxury. What lane do you really want Crate and Barrel to own? We need to be known as beautiful quality, beautiful products, and reliable service, and I think that is how we will win. Oh, this is gorgeous. Yeah, so over the past few years we have been making a lot of evolutions to the brand in order to drive growth. Crate and Barrel is rethinking their retail strategy, including customer experiences like Shop and Shop, offering free in-house design services, and appealing to local markets. In the Chicago market, we love chili, we love football, we love beer, we're simple people. Obviously you're constantly seeing all this data from customers. Was there ever any insight from a customer about a specific product that really changed how you either designed it or imagined it in a store? An example I would give you is our. beds. What we heard is that there weren't enough choices. They want a custom fabric on the kids' bed too. We have a bed that we love and we brought it into a local factory and we're able to customize and put the whole custom wall against it so designers can pick from all of the fabrics that we just saw together in the design desk that came from a customer. In the next 5 years, Crate and Barrel plans to expand their retail footprint. 45 to 50 new stores will be popping up in new cities across the country. Tell me more about doubling down on the physical retail expansion. Why now? Why a time when other people are maybe shying away from it? We are in a really beautiful position of not being overs stored, but we also hadn't really dreamt of a new storm model. And in the last 5 years we have put a new storm model out into. The United States market. In fact, we just opened our 7th, and they are proving to be incredibly lucrative and efficient and giving great service and inspiration to the customer. What we did is reinvented the idea of it to be about 40% smaller, one floor, so you can really see the whole home when you walk into one floor, and the customers love it. But those ambitious plans for expansion will be happening against the backdrop of geopolitical changes which are setting up supply chain challenges once again. President Trump posted to Truth Social announcing a new round of tariff hikes targeting six additional countries. Hayes says she's well positioned, having laid the groundwork in her early days of leading the company during COVID. What it was like felt like day to day, hand to hand combat, but What we were doing was really preparing us for the future. How are you dealing with the current instability? Have tariffs affected you in the business at all? They have, I think most CEOs probably anticipated that there would be some geopolitical disruption as a new administration took place, but I think at the speed and the magnitude that it is happening with the tariffs, I don't think probably a lot. CEOs anticipated the company's workload. We've moved business back to the United States where applicable, and I'm happy with where we're moving, but it is not to be underestimated how difficult it has been. On day one that this tariff news came through. I called everyone together and said, do not make a fast move. Quality is our main objective. Crate and Barrel has also used AI to help tackle supply chain challenges. We are anticipating and executing embedding AI into the business across all of this new technology, so it will and is embedded into the supply chain now and we're already seeing efficiencies and gains and being able to coordinate orders faster and more complete for our customers. In 2023, you made this big new tech announcement. You walk me through what exactly that was and since then what you've implemented in terms of this new tech. It all started a little bit before 2023 when our growth, I said we found kind of some cracks in the foundation and so we pulled together an investment roadmap led by technology to deliver a new warehouse management system. labor management system, transportation management system. We had dreams of a new point of sale system in the stores that started to connect that data and then a website that desperately needed to be updated after years. In addition to the back-end systems, Hayes is implementing new consumer facing technology, giving a whole new meaning to online shopping. We have all different kinds of customers, and some of them are very tech savvy, don't want to go in the store, don't want to interact, but still might need help and want to shop in new and different ways. Hence the virtual store. Do you see a world on the consumer side in which a consumer could say design an entire home or a portion of their house? Using AI and never have to step foot in a store, or do you always think that we're going to need these physical spaces? I think we're going to need the physical spaces. If anything, we have to keep asking that same question to ourselves every day. What makes that physical space relevant for the customer in the future? As Hayes positions the brand for the next generation, it's her approach to both the physical and digital spaces that she hopes will set Crate and Barrel apart. Your youngest consumers Gen Z, Gen Alpha, these digital natives who I think sometimes flock to these more digital only brands, how do you plan to encapsulate this new generation of consumers who are so used to online first and, and do you have a plan for, for the next generation of Crate and Barrel users? We believe very. Much an online first and actually the large majority of our sales are online. We're very digitally dominant. I don't think that that generation wants things that are coming at them en masse. That's what they're telling us. So we've got to personalize not only their shopping experience but their marketing experience. We've got to pay attention to what they're doing in social channels and we will. We're going to develop much more. rich content if it's how to decorate, how to cook something, how to pull something together, we owe them more content than we're giving them right now and that will come. But I think at the end of the day it won't differentiate service. How they want to receive it and when they want to receive it is again something we need to listen to and anticipate and be ready to react to.