Pie in the Sky

Mud Pie Founder Marcia Miller molded her homegrown ceramics company into a gift industry powerhouse. By Jennifer Cattaui

mud pie didn’t have the markings of an approaching-$75 million company. In fact, the original concept was pretty humble. “I thought I’d build a little business where I’d make some family income and work a few days a week,” says Marcia Miller, CEO of the gift industry superstar that’s been moving full steam ahead for 25 years.

It wasn’t the original plan, of course. In college, Miller had dreamed of becoming a journalist in New York City, but when school ended, instead of heading to the Big Apple, she says she married her college sweetheart and had to figure out how she was going to help support her new family. So she entered the junior executive buying program at Jordan Marsh in Florida, and eventually found herself working as a department manager stocking pillows-a job in which she did not see a long future. (Especially, as she tells it, in the 200 degree heat).

She and her husband, Mark Miller, moved back to the relatively cooler Georgia, and through a family connection, got a job at the Atlanta Merchandise Mart. Surrounded by a cornucopia of beautiful things-more gifts than the North Pole-she felt energized. “It was a winter wonderland fairy tale for me,” she adds. With a talent for sales, at 21 she became a traveling product rep and worked for a man who “was completely insane but taught [me] great things,” introducing her to the who’s who of the gourmet and gift world.

She then decided to team up with the vice president of Store House and created the first female-owned rep firm in the Atlanta Merchandise Market. “The guys were literally making bets on how long we would last, and of course, we outlasted them,” she says with a laugh. Always a high-energy multi-tasker, Miller started to develop and manufacture three product lines in Atlanta-concrete garden ware, decorative plaster goods and a ceramics line. The latter became Mud Pie.

Miller was juggling her four businesses-the rep firm, three product lines, a 3-year-old and 3-month-old-when her partner announced that she was ill and had to step out of the rep business. They had just signed a contract for a new space, and Miller took a good look at what she was doing and made some hard choices. She sold the rep business to a competitor and decided to focus wholly on Mud Pie, a line that had achieved some early success with placement in Macy’s.

Sixteen years ago, Miller moved production of the few hundred items she was making from the U.S. to China. This was a game-changer. In Asia she learned that the hardest thing was to make choices, as everything seemed possible. “It’s a lot easier when you’re pigeon holed and there are only a few things you can do,” she says, adding “I built this company one right product at a time.” Now with a catalog of 5,000 products focusing on three categories: gifts, fashion and children’s gifts and apparel. Mud Pie is a significant player in the gift world. We sat down to talk to Miller about growing the company from the ground up, the challenges she faced, and her take on the market.

What led up to that trip to China?
I had hired a sales manager whose family had been very successful in the frame business and I took my first trip to Asia with him thinking we would have adjunct product in China because we couldn’t really manufacture here. In the U.S. we were working off public domain molds, so we couldn’t be unique or expand our manufacturing. There are artisans (in China) that have been taught to make molds. This art really doesn’t exist in the U.S. anymore. It quickly became obvious that it didn’t make financial sense to continue to manufacture in the U.S. I also ended up hiring Li and Fong as our agent. This was a tremendous eye opener because now I could really access what I wanted to make. That expression “Be careful what you wish for”-it was true there.

What other key moments have helped fuel your growth?
Investing in the business really fueled our growth. We went to a catalog company that does a lot of work for Federated and Home Depot and we made a big investment in our catalog images. We built new websites for our wholesale and direct businesses. We also changed our sales rep strategy. About five years ago we were like most of the rest of the gift industry-we had a very fragmented sales force of maybe 10 to 12 organizations that employed reps. At that time, we made the decision to go with a company called One Coast that had a new concept of representing a company such as ours-the single company covered the whole U.S. territory, coast to coast. So literally in a year when our business was up 30 percent, we fired the whole sales force and went with One Coast. They had already been our rep in the Southeast and Southwest so we’d seen the type of business they were able to provide to us and, they were very professional and accountable. Now we have single vendor reps with One Coast-we have about 13 reps who only sell Mud Pie. There are expansion plans to add more single vendor reps in areas that can support it.

So now you have about 5,000 products and 16,000 independent retailers around the world stocking your product-that’s a lot of small accounts.
I’ve always loved the fact that there is no one account that represents 1 percent of our business. We are 80 percent an independent business company and for obvious reasons that spreads your risk dramatically so I love the 80-20 rule. We’re not seeing a lot of new independent store openings. I am hoping that soon there will be, but certainly the economy has weeded out some stores over the last few years. But, the better players have survived and in a lot of cases they are thriving and flourishing and opening more stores. We just came off the Atlanta shows and we had a fabulous market. Although we wrote the same number of orders or even a little bit less, the average dollar spent was way up. So we have made a larger footprint-and have gotten a larger piece of the action in most stores. In rough times you have the opportunity to either lose market share or gain market share. And we have definitely gained market share. Growing from a couple hundred products to thousands means your business got a lot more complicated. From a growth standpoint (people, inventory management), what type of technological challenges did you face scaling to that degree?

There have been many challenges-lots of infrastructure challenges. We are actually in the process of looking for more space. We are at 130,000 square feet and we don’t have one empty office, one empty cubicle and the warehouse is out of space. And we have moved something like four times in the last eight years. My husband is the CFO of the company and I call him the mover in charge. We are now looking for about 250,000 to 350,000 square feet. Not only physical space is needed; as we grow, computer systems have to be updated, and we have to continue to comply with all of the government and safety regulations-obviously we have to stay on top of all of that and be well documented and well versed. We have added a ton of employees, which we desperately needed and quite frankly it feels like we still need more. We’ve brought in a lot of expertise from other professionals. A private equity investment was made in our group about two years ago. The PE Group has been really instrumental in positioning us for growth, and giving us really good advice-not always exactly what I wanted to do-but I credit them for pushing us to add a lot more people in order to be prepared.

What kind of people have you brought on as a result of their advice and this positioning for further growth?
We’re hiring the skill sets we may not have in house. We hired a COO who came to us from Tyco. He had experience with a much larger company and really wanted to work for a smaller family-owned company. We also brought in a computer consultant. In the fashion and baby world we have technical designers and production managers-positions that we didn’t know we couldn’t live without before. We expanded our design area dramatically. I am a firm believer that it all starts with product. It doesn’t matter how good the collection department is or the advertising department or the marketing department-it all starts with the product. So we are first and foremost a product company-the product is king. We are making the largest investment in the product area.

As far as your minority investor is concerned, how did you find the right fit?
We were fortunate that we had a huge number of preliminary offers: a number of these companies wanted to even acquire us in full or more than a minority share but I did not want to do that. We really went with our gut, we went with the people that we felt were very smart and knowledgeable. We looked for a good partnership, not one that would be fraught with anxiety. It worked out quite well.

These days, businesses are talking about moving from China to other areas because the prices have gone up and it’s harder to do business. Have you thought at all about moving from China to produce elsewhere?
We are always exploring all of our options. I don’t see Mud Pie leaving China. I see that we can possibly diversify into some other countries if those countries make sense for what we’re looking for. But we have a wonderful overseas office in China with over 100 employees and they manage to do a pretty darn good job for us. There are always things China might not be best at-and other countries are-so we’re looking more at those types of areas.

Do you go to China quite a bit?
Yes-not as much as I used to, as our China office often comes to us. They will be here in a couple weeks and then I will make the trip to China and to India. In India we are doing tabletop, wood and metal items and some adult fashion.

Where are you currently focused in growing your brand? Domestically? Internationally?
Both, but we are more focused on America. We have a new situation in Canada that is going very well for us. We have a stock distributor there and we are looking to double that business this year. Our international business is also extremely good, but I wouldn’t say that we are looking to show at trade shows out of this country at this point or put a lot of effort in growing those businesses like we are our domestic business.

What other growth opportunities are you seizing-any product areas?
Trends in children’s fashion open up lots of other opportunities for us. We have focused this fall on developing a new look in boys that is doing extremely well for us-little polo shirts that pair with cargo pants and a new collection of blankets. Girls are always easier, of course, but we are looking to further develop our boys’ business. We’re also looking at several new layette stories, which will be coming on in January. And lots and lots of piece types-both soft lines and hard lines.

In terms of stores, I think that we’re garnering more of their dollars. And I see that trend continuing. As the economy turns up these better retailers are starting to open more stores. Our online retailers are also very strong.

With regard to online, are you integrating social media into your overall business, and have you seen an effect on your bottom line?
Yes absolutely. We have a very active Facebook site. We’re up to 24,000 to 25,000 followers on Facebook-very engaged followers.

I think that the more the name is out there, the more it’s talked about and the more it’s recognized; it’s good for us. I’ve seen stores where they put out the pictures of what’s coming in and people are actually waiting for it. I think that sometimes it’s hard for us to keep up or have time to spend online, but it’s amazingly powerful.

What do you think is the secret of your success?
I think a lot of people get scared and listen to the news too much. We just kept our nose to the grindstone, kept going, kept focused on creating special, unique, adorable products at affordable prices. So much of the competition has pulled its tail in and run, so there’s not as many exciting [products] to choose from at market. I also think our pricing works well for independent stores. Goods look more expensive and that has made the retailers perceive Mud Pie as a value.

In the short-term future, where do you see yourself spending most of your energy?
Well I’m always looking at businesses we’re not in and asking myself should we be in them, how do we get in them and how do we become special in them. For instance, we’re looking into categories we’re not in like baby bedding, rugs, lamps and room decor, and trying to figure out if there is a reason for us to enter that market or not. Also, we continue to expand in sizes. We added 4T and 5T this year in our special Christmas dress up items and they’ve done very well so I expect that we’ll continue to add where it makes sense.

You’ve had tremendous success as a woman entrepreneur. What advice do you have for women? And how have you balanced it all?
I like to say that failure is not an option. It never has been and never will be. I am the type of person who would work three jobs to support my family. Sometimes you just have to put your nose down and don’t let fear fuel your decisions. Obviously you need to research what you’re about to embark on and you have to be knowledgeable and sometimes have a particular skill. I’ve seen failure stop so many people from even trying. People ask all the time-at entrepreneurial conferences that I speak at-and I tell them if fear paralyzes you, forget it. You just have to know you’re going to get through it, believe in yourself, make smart decisions, and breathe. It’s not easy: There are a lot of tough times and you have to know you’ll get through them.

Balancing it all-you know it’s quite difficult. I have a great partner. We really are partners-he did and does everything I do with the kids. People would ask, “Who’s going to take care of your children when you’re gone?” and I’d say, “Their daddy.” Obviously there’s a lot of juggling, and you have to be there when you feel that it’s important for you to be there, but know sometimes that you can’t be. As the world changes, most likely the days of mommy staying home will change, as it’s not that realistic. As a working mom I think it’s great that my kids have seen that you can run a business, be successfully married and raise a good family. I think it’s good to set that example, because for most families, needing to do it all is reality.