Wallace w. "jerry" epperson, jr.; mann, armistead & epperson, ltd.



December 7, 2015



Gary James, Interviewer

INTERVIEWER:    This is Gary James. I'm interviewing Wallace W. “Jerry” Epperson, managing director of the investment banking and advisory firm of Mann, Armistead & Epperson. It's Dec. 7, 2015, and we're at Jerry's office in Richmond, Virginia. Let's start at the beginning, Jerry, where were you born and when?

EPPERSON:         I was born here in Richmond, but my parents were living in Victoria, Virginia. Victoria is about 70 miles southwest of Richmond. Chase City is to the south, Crewe is to the north, South Hill is to the southeast and Keysville is to the west. Those are all towns no one has ever heard of, but Victoria is right in the middle of all of them. It's a railroad town because Victoria is halfway between Roanoke and Norfolk — the coal docks. There were two main railroads that were in parallel — the Virginian, which went through Victoria, and the Norfolk and Western, which went through Crewe, which was 16 miles north of Victoria. Both railroads were coal-bearing railroads. They took the coal from West Virginia, and it rolled straight on downhill to Norfolk, where it was shipped all over the world.

I grew up with my father working on the railroad. It was a traditional household. My mother stayed home and raised my sister and me, and Dad worked. His job that he preferred — you didn't always get what you wanted — was what they called the local. The local would go up and down between Victoria and Roanoke. It would stop at all the factories whenever there was a need. One went to Norfolk and back, and one went to Roanoke and back. The one that went to Roanoke and back that Dad loved to work went through all the local furniture towns.

That’s how he got to know Mr. Ed Lane of Lane Furniture, for example. Mr. Lane liked to ride the train, which was against the rules, but he was a big customer so Dad would let Mr. Lane ride with him in the caboose out to Roanoke. Mr. Lane would then call one of his family members to come get him and take him home. It turned out to be such a blessing to me ... I didn't realize it, of course, growing up, but that's really how I got my start in the furniture business was through my dad's contacts. Dad was a simple railroad conductor. He never earned more than about $25,000 his whole life. Mom ran the house.

INTERVIEWER:    And you had one older sister, Nancy?

EPPERSON:         My sister was six years older than me. In 1950, when I was 2, there was a polio epidemic going through southwestern Virginia. I had an ear infection and they took me to Farmville Hospital, which was about 40 miles away. They had an open clinic. Victoria was too small at that time to have a doctor. A couple of weeks after my visit to the clinic, my parents got a letter from the hospital saying that there was a child there the day I was there who had polio and that they should watch me because I had been exposed to that child.

Of course, sometime after that, I began to fall down. They took me to the quarantine ward here at the Medical College of Virginia. I was there for six or nine months with all these other kids who were fighting polio. A lot of them didn't make it. For a long time, I wore two leg braces and had to walk with crutches and all this other stuff. Then eventually, I got to the point by the time I was in high school that I could walk with just one long leg brace and some corrective shoes. I was able to stay that way until I reached about 50. Then I had to start going back to using a cane and crutches and eventually lost the ability to walk altogether.

The polio was great. I don't fault polio. My father taught me that because of the polio, I was going to have to use my head and I couldn't work in the furniture factories around Victoria. I couldn't work in the textile factories. I couldn't work in the tobacco fields or on the railroad. I had to use my brain if I was going to go anywhere.

As luck would have it, I had all these surgeries, one after another, when I was younger. Because of the surgeries on my leg and tendon transplants and different things that they did, they didn't work on my eyes until I was 7 or 8 years old. My eyes had been crossed all that time. If you look at some of the old pictures, you'll see me wearing a patch over one eye, which was the way they were trying to correct it.

When I went to have my eyes corrected, we did that in Charlottesville, and that gave me exposure to the University of Virginia. What a beautiful school. That's where I decided I wanted to go even though traditionally everybody from Victoria, the few that went to college, went to Virginia Tech. I wanted to go to UVA, so that made me a little bit different.

INTERVIEWER:    Did you spend some time at Warm Springs, where President Roosevelt was treated, as a child receiving therapy for your polio?

EPPERSON:         Yes, the doctors eventually thought going to Warm Springs would be good for me. Back then, we didn't have expressways, and Warm Springs, which is in the far southwestern corner of Georgia, was a long ways from my home. We had to drive down there. We did it every summer for two or three summers, and then they decided that I needed major surgery. When I was 9 years old, in the third grade, they put me in a cast from my neck to my toes. They wanted to do a spinal fusion on me because my spine is shaped like an S, but my doctor in Richmond and my parents refused. That was a very controversial surgery, and it was a surgery that could not be corrected if a complication arose.

So they didn't do that. Instead, they put me in a cast and began to bend me every several days. They'd take a chunk out of the back of the cast and my stomach would go up and there'd be an arch in my back, and only my shoulders, my head and my heels would touch the bed. The arch got larger and larger until I could drive a Tonka truck under my back, back and forth. I was just a complete arch. Sometimes they'd flip you over so you'd rock. I was there for nine months, and the biggest memory I have of that — other than my mother being with me the entire time and my father staying with my sister back in Victoria — was of Christmas.

I was in a ward with 18 other kids. My hometown sent me 677 presents. It was a huge quantity of presents, and my hometown only had about 1,500 people. I was the polio kid. Dad's friends on the railroad, people from my church, just the whole community, kids that knew me, all of them sent presents. That's the good news, I got a lot of presents. The bad news is, Victoria was so small, we didn't have but a couple of stores, so I got the same things over and over again, like 50 identical firetrucks and 50 identical this, that or the other. My parents looked at all this stuff and what came to me ended up being Christmas for my entire ward.

INTERVIEWER:    That speaks a lot to the closeness of your community.

EPPERSON:         Growing up in a small town was just tremendous and valuable. Of course, when I grew up, I left that small town and never went back other than to visit my parents or my in-laws. But it gave me a sort of feeling of community that I think has been helpful in my career and helped me relate to people of all types. Plus, when I started working in the furniture industry, and I'd go to places like Altavista or Bassett, Virginia, these were towns I could relate to. I could remember one of the analysts from New York coming down one time. We just happened to know each other. We were talking and he said, "How do these people live in these small towns?" I said, "Altavista isn't a small town. Altavista has movie theaters. It has stores. It has a main street. It has several banks.”

By contrast, I said, "My hometown's got one stoplight, and it really doesn't need that. It's got one bank. It doesn't have a theater. We have to go 25 miles to go to a movie. Altavista is a big town to me.”

INTERVIEWER:    One point that struck me in reading a memoir you wrote about your childhood was the importance of driving. Did your ability to drive give you a certain freedom?

EPPERSON:         Driving removed a lot of my handicap. I could go anywhere I wanted and have the freedom to do what I wanted. But I had an accident the day I got my driver's license. That wasn't good. I hit a school teacher head on. She was pulling out of a gas station and I was turning to go alongside the gas station. I was looking where I was going up the next street, and she was looking behind her to pull into the lane. We didn't see each other until we hit head on. I was very upset.

But my father came and made me drive that night. I was taking a bunch of my friends to a dance. He made me go even though the car was busted up in the front. One of the headlights pointed straight up. He made me drive that night because he was afraid that if I stopped driving, I'd never drive again.

That ability to drive was extremely important in giving me independence. It also made me a very popular guy at the University of Virginia. UVA, when I went there, was not co-ed. And during the first year at UVA, we were not allowed to have cars. But, because I needed a car to go back and forth from class from the dorms, they let me have one. I was the only first-year student out of 1,500 to have a car at a time when there were no female students. To spend time with girls, we had to go 40 miles to another school such as Mary Washington, Hollins, Madison, Longwood or Radford. All of these schools were a long ways away, and I was the kid with a car.

INTERVIEWER:    Today, you'd be making a fortune as an Uber driver for your friends.

EPPERSON:         Absolutely. I've never had and I will never have as many friends as I had my first year at the University of Virginia. My grades were horrible, but I had a good time and I met a lot of folks.

INTERVIEWER:    You also faced some unusual challenges while you were at UVA. You told one story in your memoir about a professor fighting you for a parking space and then making you search for another one, and when you arrived late to class, punishing you for that?

EPPERSON:         Joe Gibson was one of my absolute favorite professors at the University of Virginia in the Commerce school. He was very strict, and you had to be at class on time. I showed up one day and took the last parking space in the faculty lot, where I had a pass. While I was walking away from the car, Mr. Gibson showed up. He pointed out to me that if I missed a class, that represented one man-hour of education lost, but if he missed it, that was 24 man-hours of education lost. I said, "So you want my parking place?" He said, "Yes I do." He took my parking place, and I parked as close as I could. But, of course, walking at my pace, I was probably 20 minutes late getting to the class. Typically, if you arrived late to his class, you just didn't go in. But, in this case, I felt like he'd understand. I walked in, and he lambasted me for being late to his class. Of course, I couldn't say a thing, but later on, he became a good friend.

INTERVIEWER:    Were you the first in your immediate family to go to college?

EPPERSON:         Oh goodness yes. My sister graduated from high school. My dad did not. My mother graduated from high school. My sister went to Smithfield Massey Business College here in Richmond for a year and became an accountant. But in terms of going away to a college, I was the first. And I didn't realize how unprepared I was. I had no clue, and I hadn't done any investigation into it. I'd always gotten good grades in high school. I went to UVA and began to realize that, in my high school, our home ec teacher taught us chemistry and our football coach taught us biology, so I had no feel at all for the sciences. Our physics teacher at the time was a foreign grad student going to Arkansas State, who was getting some sort of scholarship for teaching in a rural school. None of us understood a word he said, so I didn't get any physics education.

When I went off to Virginia, when you sign up for classes, you used to go to the old gym. You stood in line and signed up. There were two chemistry options — university chem and college chem. I didn't know the difference. My college roommate, Dexter, got in the line for college chem. The line for university chem was much shorter and I didn't want to stand in line, so I got in the short line. What I soon learned was university chemistry is chemistry for people that are going to be engineers, physicians or chemists. College chem is for everybody else who just needs a science to get through your first year and is never going to ever use it again. That was the first course I ever failed. I knew I was going to fail it. It was dismal.

INTERVIEWER:    You were initially on a pre-med track?

EPPERSON:         I was pre-med for about a week. Because I had gotten really good SAT scores, my high school counselor said that I could be anything I wanted. I didn't have any idea what I wanted to do. At Virginia, I took a lot of different classes my first year and I did not do really well. My only outside activity was managing the basketball team, which I just loved because we were an ACC team. In my four years up there, I got to be on a first-name basis with Dean Smith of UNC-Chapel Hill and many great coaches. It was just wonderful to be on the floor and see what was really going on.

INTERVIEWER:    You traveled with the team down to Chapel Hill?

EPPERSON:         We traveled with the team everywhere. I've got some stories I could tell, but I'd better not.

INTERVIEWER:    Weren’t you tapped to coach the team for a few minutes during one game?

EPPERSON:         That's exactly right. It was a national broadcast. We were playing Maryland, and Coach Connors, our assistant coach, was traveling on a recruiting trip, so Coach Gibson was there. We also had a trainer at the game, Joe Geek, who was extremely vocal. Sometimes my job was basically to restrain Joe. I also kept some stats. And I also got Coach Gibson's gum. He had several flavors of gum depending on his mood. We had 10 team managers. When I got to be the head manager, I was responsible for managing all these people, arranging the trips and handling the money. I did a lot of stuff.

This one time, Joe Geek’s yelling earned us a technical. Then Coach Gibson got a technical. Then we got a third technical on the bench. That meant the coach got thrown out. We didn't have a coach, because Joe Geek had to go with Coach Gibson. That happened with about two-and-a-half minutes left. We were down 20 points. As Gibson walked by, he said, "OK, you're the coach." First thing I did was I stood up and called for a time-out. The whole team comes over there and they looked at me and they said, "Why did you do that? Let's get this over with." I said, "Are you kidding? We're on national TV."

We sat there and talked for a few minutes about what we were going to do after the game, that kind of stuff. Then when the horn blew, we just finished out the game.

Serving as team manager was one of those rare opportunities. I got to go around and see all these great, great coaches. I'm not going to pretend that I knew them well. But it meant a lot to me to be involved on that level and that scale. Coming from a very small town and getting to know someone who is national in scope meant a lot. Just the fact that the guy recognized I existed meant a lot to me. I've never been into celebrity worship, but just knowing someone who is known like that showed me a different level. Then I eventually got my letter, which also meant a lot to me.

INTERVIEWER:    Was that a surprise to your friends?

EPPERSON:         Trust me, no one from my high school expected me to be the only person from our area to get an athletic letter. But I did get an athletic letter, and I still get to go to the UVA basketball reunions and things like that when I can.

INTERVIEWER:    It sounds like you had a memorable college experience at one of the best public universities in the country.

EPPERSON:         How shall I say this? I graduated in the top 100 percent of my class with no honors whatsoever, but I graduated, and I've got a diploma that looks a whole lot like the diplomas of the people who graduated in the top 1 percent of my class. Once I moved into the business school, I did very well. I was in the top 25 percent of my class in the business school. I loved business.

INTERVIEWER:    What led you to make the switch to business studies?

EPPERSON:         During my second year, because I was struggling so badly with foreign language — one of the requirements for the track I had been on — I signed up for economics. My mind simply doesn't comprehend why there's another foreign language. What I hate about the French is they've got a different word for every one of ours. I don't understand why they need that, but they do.

The smartest thing I did was I hired my instructor to tutor me, and she tutored me for four semesters. Still, I got a D minus in all four semesters. I would have failed if she wasn't tutoring me, but since I was paying her to tutor me, I think she thought she shouldn't fail me. That's what got me through with the D minus, but I still hadn't met the minimum level. That’s when I looked into the business school. When I started taking economics, everything just seemed so common sense. There wasn't anything complex about it. It was just, "Yeah, that's just the way things work."

INTERVIEWER:    Did you have an affinity for numbers?

EPPERSON:         I love numbers. I still remember birthdays and other things and I don't know why I remember them. I had a great time in that economics class, and my roommate, Dexter, who had been doing really well in almost everything, was struggling. He was finding it difficult, while I was just marveling, "Why was he having trouble?"

INTERVIEWER:    You and Dexter took that economics class together?

EPPERSON:         We did. It was one of the few classes we took together, and he struggled and I did great. I got an A. Trust me, it was my first A. I didn't understand how anybody could have a problem with this subject. Dad told me that it was God telling me something I ought to pursue further. That’s when I looked more deeply into the business school and went to summer school and took accounting.

Soon, I went from being in the bottom of my class to making A’s in accounting. I was tutoring other kids who were taking the course. What could be simpler than accounting? It's nothing but common sense. Everything just seemed to come easily. I didn't have to study. I didn't have to work hard. It just made a lot of sense so I did the same thing with statistics and all of the business courses. I took as much accounting as I could, but I didn't want to be an accountant. One of my professors told me I did not have the personality to be an accountant. He said, "Don't do that. You'd hate it.”

So I took more finance courses. At that time, I envisioned myself getting into banking or investment banking, but I had never been around investments very much. My father didn't have investments, but I learned a lot about it. I was fascinated by it.

My last year at Virginia, I had three job offers. The best of the job offers was to go to New Jersey. The other two job offers were just to get into training programs and I had no interest in any of it. At the same time, I had fallen deeply in love with Kathy. She was the saving grace in my entire life.

INTERVIEWER:    When did you and Kathy start dating?

EPPERSON:         The night before I graduated high school, we had our first date. Within a month, I was willing to marry her, but she wasn’t in a hurry. She did change her plans and ended up going to a three-year nursing school so she could graduate at the same time I did.

Knowing that I wanted the two of us to have a future together was a driving force for me. I did not want to let her down and that inspired me to find some way to do better.

Another factor that played a role in me wanting to succeed was our high school principal, Jim Thweatt, who had a son my age. I never knew why, but Mr. Thweatt used to look at my grades and use them as a point of comparison with his son. His son told me that his dad would get mad at him if he did worse than I did. I never understood why. He’d say, "That Epperson kid — his family doesn't have any education, any background. You ought to do a lot better than he does."

I never worked hard or studied much in high school. I never had to, and I knew our classes were weak. I never really learned to study until I went to Virginia and realized I'd better get to work. Mr. Thweatt had a 15-minute interview with each of the graduating seniors. When I got in a closed room with him, he was very blunt. He said, "You don't have the smarts to make it through UVA. You ought to change right now. You might make it through Virginia Tech, but you'll never make it through UVA.”

In the future, whenever I got myself in a tough spot at UVA, I would remember what Mr. Thweatt said, and I would work harder. I just did not want Mr. Thweatt to be right.

Years later, when I did graduate — I graduated in four years, and I graduated in the top 25 percent or so of the class for my major — I wanted to send him a letter or announcement, but I didn't do it. Interestingly enough, his son came and stayed with me one summer when he was taking some classes in Charlottesville, so I'm sure Mr. Thweatt learned that I graduated from UVA.

Because Kathy didn't get out of nursing school until late August, and I was going to get out in June, we decided to get married over the Christmas holiday during our senior year. Otherwise we wouldn't have any time to honeymoon.

We originally planned to get married right before Christmas. Then I learned I had a basketball tournament I had to go to, so we moved it to Dec. 28. That didn't make everybody real happy. We had to redo the announcements and everything, but I had to go to the tournament. Fortunately, Virginia won the tournament. Then, when I got back to Charlottesville, we had this horrendous snowstorm, and Kathy and I had a dickens of a time getting home. But it all worked out.

Our wedding was very simple. Kathy's mother made her dress, and I think she also made some of the bridesmaids' dresses. Friends and family made the food, and it was a very simple wedding. I don't dance, so that got eliminated. I don't drink and her parents don't either, so it was a simple affair but fine for us. Dad was my best man.

INTERVIEWER:    You knew you were destined to get married almost from the start?

EPPERSON:         There wasn't any doubt. It seemed like after our first summer together, we both just decided that this was working and we wanted to be together the rest of our lives. We were making plans for that. I went to sleep every night looking forward to the next time I could be with her. It was just very special. Even today, 46 years later, I don't sleep well unless Kathy is with me. How odd is that? We've just been so blessed.

INTERVIEWER:    What did you do after graduation?

EPPERSON:         I had gone to what everybody agreed was a very good undergraduate business program. To further my education, I decided to enroll in the College of William & Mary’s graduate business program, which had just started three years before I got there.

William & Mary already had a good undergraduate business program, and they created the new MBA program to serve the military. The military has a strong presence around Williamsburg, Norfolk and Newport News, and having a business degree was another way for officers to accelerate their advancement and earn more pay. As a result, I was suddenly in classes with a lot of military. We're not talking young military. We're talking guys who were colonels, captains and generals.

A lot of these military brass thought about things in such a way that they weren't very creative. If they couldn't strategize and put it on a flow chart, they couldn't make it work. I had just gone to a good business program so I was taking some of the same types of courses over again using the same books I had just taken a year or two years before.

I got really good grades. If you take classes a second time, you do really well. I was a straight-A student and that was a big difference for me. I was an A and B student at the McIntire School of Commerce at UVA, but I was a straight A student in everything at William & Mary until my very last class there. Charlie Quitmeyer, who was the dean of the school, taught that class, and he gave me a B-plus. I asked him why, and he said he simply didn't want anybody to get all A’s.

INTERVIEWER:    Was your William & Mary experience still worthwhile?

EPPERSON:         Yeah, it was wonderful. The most important thing to me was the difference in the atmosphere of the schools. Virginia, when I was there, had a very strict honor code. If you broke the honor code, if you lied or cheated, you were thrown out of school.

On the other hand, I saw people cheat at William & Mary. I had never really been around students that cheated before. A few kids probably cheated in my high school but I never gave it much thought. None of the stuff we did was difficult enough that you needed to cheat. My UVA classes that I really struggled with — French and that original chemistry class — I never considered cheating.

It was the difference in the community that led me to attend William & Mary. Larry Pettit, one of my teachers at UVA, told me I could get my MBA at UVA if I wanted to. But he recommended going to William & Mary for the different experience and the fact that it was a new program. Charlie Quitmeyer also told several of us that he wanted some UVA students to come down there to get the program started right.

INTERVIEWER:    So a group of UVA students ended up pursuing degrees there?

EPPERSON:         Yes. There were seven or so of us from my undergraduate class at Virginia who went there to get their MBA. Another five or six of us went down there to get law degrees, so there were a lot of us who knew each other. I think of the top 10 in my MBA graduating class, seven of us were UVA grads.

I went and sat in the audience at my graduation. I had just graduated the year earlier from UVA and gone through the whole pomp and circumstance, marching and all that stuff. I don't march real well. Going up and down the steps and all that, was rough.

INTERVIEWER:    William & Mary was a 1-year program?

EPPERSON:         It was a 2-year program, but I did it in 12 months. I just doubled up so that I could get done quicker. The other thing was Kathy and I were married, so except for playing golf with a couple of my friends occasionally, there weren't any other draws on my time.

INTERVIEWER:    What did you do after graduation?

EPPERSON:         William & Mary is thought of as a liberal arts school and, as a result, didn't have people recruiting there like UVA had. I thought I might have to go recruit out of UVA again to look for a job, but then I talked to a headhunter. This headhunter had a job he wanted me to do, so I signed up. It turned out to be at Scott & Stringfellow. That was extremely good fortune. Kathy says I've got an angel on my shoulder that watches out for me. I think that's true because a lot of things that have happened in my life certainly weren't because I planned them or had any great vision.

I went and met the Scott & Stringfellow people, who were very gracious and kind. A gentleman named Bill Harsh was the head of research, a wonderful fellow. Henry Spalding was his boss. The president of the firm was a gentleman named Fred Bocock, and the chairman of the firm was Sidney Buford Scott. Fred Bocock’s full name was Frederic Scott Bocock, so he was a member of the Scott family. The Scotts were one of the wealthiest families in Virginia at the time, but also the kindest, nicest, most wonderful people you'll ever meet. I went to UVA and they went to UVA, so my background at Virginia was a big influence on me getting that job, much more so than William & Mary.

As part of the interviewing, I took all these personality tests and other things they wanted me to do. They showed that I was very intent on pleasing my parents. They liked the fact that I was married. They also liked the fact I went to UVA and that my grades were so good in graduate school.

As luck would have it, what they were looking for was a furniture analyst and I knew something about the furniture industry from my background. My dad could tell you every furniture factory up and down the railroad who was doing well and who wasn't because they were getting coal for the boilers and they were getting boxcars to ship the product.

INTERVIEWER:    So your exposure to the furniture industry really started through your father?

EPPERSON:         I knew just from hearing him talk at dinner that this factory couldn't get enough boxcars, and that another factory needed extra coal. Everybody back then would load up on extra coal if they thought they might face a railroad or coal miner strike.

INTERVIEWER:    He would have had Lane on his route and other major producers as well?

EPPERSON:         Lane was the primary one. Bassett, Virginia, was not on the Virginian and N&W lines, but I got to know the Bassetts through the Lanes. Bob Spilman, who became president of Bassett, was married to Jane Bassett. B.B. Lane, who later became president of Lane, was married to Minnie Bassett. The two families intermarried.

When I was at UVA, and working on a paper for one of my courses, I reached out to Mr. Lane, and Mr. Lane couldn't have been nicer. Here's a millionaire founder of a very large business, and he basically said, "Tell you what, you talk to my son B.B.” Later, as an analyst for Scott & Stringfellow, I would call on B.B. in a business capacity.

INTERVIEWER:    When you joined Scott & Stringfellow in 1971, had they had a furniture analyst before?

EPPERSON:         They had had analysts who covered a little bit of everything. But they'd never had a furniture specialist.

Wheat First Securities had the dominant furniture analyst at that time, a guy named John McDowell. John was a tall, pipe-smoking guy. He knew everything about the furniture industry. I was learning and he was always very kind to me and very nice. He eventually took over another sector in addition to furniture — Real Estate Investment Trusts, which ended up shortening his career at Wheat.

Mr. Jim Wheat was on Lane's board for many years. At some point, he heard about me.

After I'd been at Scott & Stringfellow five years, I heard from a friend of mine with one of the banks that they needed a furniture analyst. He said, “You're the only other furniture analyst around, so why don't you call them?" I called up there and they made me a deal.

INTERVIEWER:    Let’s go back to your time at Scott & Stringfellow. During your five years there, what were some of the highlights?

EPPERSON:         One of the first things I did was I put together a big report that listed all of the data on all the public companies involved in furniture. At the time, there were a number of conglomerates involved in the industry, such as Thomasville, which was part of Armstrong Cork, and Congoleum, which had a lot of furniture companies. Sperry & Hutchinson was another big player. They had Lea, American Drew and Daystrom.

I put all of that information together in one great big report and compared the figures on sales, pre-tax earnings, after-tax earnings and profit margins. We showed all that in one big report and no one had ever done that — or seen that — before.

I presented the results in a very poor speech to a Southern Furniture Manufacturers Association meeting in Point Clear, Alabama. The group had invited me to come down and talk about that report. I was so nervous. I was just stumbling all over myself.

INTERVIEWER:    It would have been one of your first speeches?

EPPERSON:         It was my first speech ever, and it was horrible, but people were very kind to me. Roy Briggs of Drexel, for example, and several other people took me under their wing and said, "You'll do better next time," and so forth. I kept working at it and learned how to speak better. Eventually, I got to the point where I'm probably too relaxed. A lot of it has to do with confidence in your knowledge base. If you feel like you know what you're talking about, it makes you a better speaker.

At one of the first Southern Furniture Manufacturers meetings I went to, they had Bob Spilman from Bassett give a talk about what was going on in the upholstery business. I didn't understand why all these people were being sarcastic about it, but Bassett had just gotten in the upholstery business only a couple of years before. In their minds, he didn’t know enough to be an expert yet. He was seen as the newcomer, so what could he know? Bassett had always dominated the wood side of the business.

INTERVIEWER:    You truly became a student of the industry at all levels, didn’t you?

EPPERSON:         I paid attention to all the nuances. I began to learn who made what and who they sold it to. I also began to learn who was married to who — and why that was important.

INTERVIEWER:    The Bassett family alone is pretty complicated.

EPPERSON:         As we all know now from the book “Factory Man,” but I got to learn that early. I still remember one day Bob Spilman asked me point blank about one person — I won't mention his name — who had recently been fired from his job because he had been caught by his wife fooling around. I told Bob that, and Bob says, "I knew it was something like that. He's a cousin of mine." You just need to know who is married to who and who is divorced from who and all these things. It's so easy to make a mistake.

I remember when Budd Bugatch (now director of furnishings research at Raymond James & Associates but at the time with another broker) came to me and asked for my opinion about a merger. Budd said, “I want to introduce two companies because I think they ought to merge, and I’m going to trust your honesty that you won't run around me before I do it.” He said he wanted to introduce Pulaski, which was a public company, to Vaughan Furniture. “ Vaughan’s numbers were public because it had a fair number of shareholders, but it wasn't public like Pulaski. He says, "I'm going to plan a dinner at the market, and I'm going to introduce John Vaughan and Bunny Wampler because I think the two companies would fit together really well."

I agreed with him. I thought the companies would fit together really well, but I discouraged him from setting up the dinner. He asked, "Why?" I said, "First of all, John and Bunny roomed together at N.C. State. I know that, and they're cousins. Bunny Wampler started out working for the Vaughans before Chick Richardson offered him the chance to start Pulaski, which was an old RCA TV cabinet factory in Pulaski that they converted to making furniture. John and Bunny have known each other their whole lives and you're not going to be introducing anybody. If you think you're introducing the two of them, you're just going to embarrass yourself." He said, "Well, never mind then."

INTERVIEWER:    The mid-1970s, when you produced that industry report for Scott & Stringfellow, was a really dynamic time for the industry. What did the industry look like then?

EPPERSON:         The industry was growing like a weed. We had the baby boomers graduating from college and just beginning to get homes. I was a baby boomer so I was part of this. The industry was hot as a pistol on Wall Street. Levitz Furniture was as hot as any high-tech stock ever was, and everybody wanted to buy a piece of Levitz.

At the same time, some producers were going public supposedly because they sold Levitz. Some companies went public that never sold Levitz a stick of furniture to them, such as Henredon, but they got a lot of publicity because of what was going on. In addition to Henredon going public, La-Z-Boy, Flexsteel and Heilig-Meyers also went public. There’s a long list of companies in our industry that went down this road during the period.

As a result, my universe just exploded in terms of what I had to cover. On the West Coast, for example, I got to know R.B. Industries. I also got to know Levitz well, including Sid and Ralph Levitz and their CFO. You just learned and learned, but that big report I did started it all.

INTERVIEWER:    There also was a lot of outside money coming into the furniture industry during that time, wasn’t there?

EPPERSON:         There were a lot of conglomerates back then — companies that invested in many different industries, thinking that having a participation in all these different industries would create synergies that would be better than just focusing on one industry. That was a bit of a fad, but it was there for a while.

In 1973, the U.S. Securities and Exchange Commission ruled that these different companies had to break out these divisions and show their sales and earnings. They had never done that before, so there had been a tremendous amount of absolute speculation and bull about what the size of these companies were. For the very first time, you could go to the SEC, look up the 10Ks and, in some cases, their annual reports and see exactly what the numbers were.

INTERVIEWER:    Before all, the performance of different divisions was jumbled together?

EPPERSON:         Exactly. You could get the results from the whole company but not from the divisions. All of a sudden, I put out in one document what all these divisions were doing with all these conglomerates, plus all this detail from their proxy statements that nobody knew was available on a lot of the public companies, including executive compensation, factory sizes and what they paid for acquisitions. It was all this information that people just didn't know was available.

For the first time, you're reading about your competition. You're seeing things you didn't know. Some of these companies that had claimed to be $150 million, which was huge back then, were actually only $30 million companies. Some of that bull came back to haunt them.

INTERVIEWER:    Did you receive some heat for reporting things that people weren't ready to have the world know?

EPPERSON:         They hated it. One of the first little individual studies I did was on the recliner business. This was before we had major multi-seat motion. Berkline was public, and Mohasco had Stratalounger and Barcalounger as part of their businesses. Of course, La-Z-Boy went public. And Flexsteel was public. You had a lot of public companies in there, and I just picked up the phone and called some of the other companies and said, "I want to do this report." Some of the people were very willing to help, "We did $24 million last year,” they’d say. Others were more standoffish. I remember Ron Jackson at Catnapper. He said, "What did I tell you last time?"

I got numbers. I put them all in that report and released it. A lot of the people were shocked that we could put out estimates of the recliner business. Some of numbers were very exact — not down to the penny but very close. Others were just rounded dollar estimates.

Back then, it was probably Home Furnishings Daily that picked up the study and wrote about it. I then went to see this one public company at the next market and, when I walked in their showroom, the president called me over and said, "Hold on." He asked every salesman in the showroom to come over, and he said, "OK, I want you to tell these guys that the number you put in that report for us was just made up and it isn't true."

I said, "Please don't make me say that." He said, "No, I want you to tell them that because I've been telling these guys we were a $40 million company, but you said we were only an $18 million company and that's a lie. Where did you get that number from? Who told you that?" I said, "Nobody told me that. That number was in your filings with the Securities and Exchange Commission." The president’s face just deflated. You could just see it.

You got into those kind of situations. Singer Furniture had told everybody it was doing hundreds of millions of dollars in business annually. It was a big company. It just wasn't quite as big as Leonard Fischer had told some people it was.

INTERVIEWER:    Part of your research involved talking to a wide range of companies in a particular segment of the business, including private companies and retailers, didn’t it?

EPPERSON:         Paul Broyhill came up to me after he saw my first report. He said, "How can we get this information on a regular basis?" We started something in 1974 called the Scott & Stringfellow Home Furnishings Service. It came out monthly in a three-ring binder. Each company had a little file in there, and we'd send you updated sheets, where you'd tear out the old sheet and put the new sheet. We charged $200 a year or so for it. We advertised and got probably 50 people to sign up, which was about 30 people more than I thought would sign up.

At one point, I got a note from Clyde Hooker. He said, "I really enjoyed your presentation. I love your material. Thank you. I've learned a lot from reading it, but you'll never get anyone in this industry to pay you for this kind of information." In many ways, he was right. Everybody wants something for free, but a number of companies have paid us to subscribe for many, many years.

In addition to generating revenue, the report gave us a way of differentiating ourselves from other bankers and analysts, because we could talk not only about the public companies and about the numbers at the conglomerates, we could talk about a lot of the private companies, which I made special effort to get to know.

One day I realized that the real driving force in our business is the retailer community, so I made a big effort to get to know the retailers. I spent time with the Seamans, primarily Carl. I spent time with R.B. Industries. I traveled all over the country. I realized that if you know what is going on with the retailers, you'll know what's going to happen with the manufacturers. It all fit together.

INTERVIEWER:    Were they comfortable spending time with you because you were sharing information and insights with them?

EPPERSON:         Exactly. We were talking to the whole industry. We could bring them information they couldn't get anywhere else. That worked so well for me. It's not like I was out swapping lies or rumors. I was talking about what I saw and what I learned. The more I learned about retail, the more valuable I was to different manufacturers, and I was more valuable to retailers as well. Then all of a sudden, we start getting courted by the suppliers like Leggett & Platt, because they saw we knew what was going on.

INTERVIEWER:    Did that experience evolve into providing consulting services to individual companies?

EPPERSON:         I don't like consulting. It's a necessary evil sometimes, but it wasn’t what we did. What our efforts did result in is that when people wanted to go public, they'd call us because they knew we knew the industry so well. Plus, we were the go-to people in the investment community. Everybody knew that we had this expertise. By then, John McDowell had been let go. And by 1976, I’d moved to Wheat. We were THE furniture folks on Wall Street. Wheat was a major regional player. We had branches all over North Carolina as well as in southwestern Virginia. And, as a result, I had people in Martinsville, Hickory and High Point who could feed us information about industry developments in those areas.

INTERVIEWER:    When was the furniture group created?

EPPERSON:         In 1978, Mr. Wheat said, "Let's start a furniture services group." He brought in Jim Mann. Jim Mann was a son of a Richmond city cop, who went to VCU here in town and got an accounting degree. After a few years with Ernst, he was hired by the FBI’s white-collar crime division. Jim spent a few years with the FBI, and then he moved back to Richmond when his father became ill.

Jim came to work at Wheat in the investment banking area. We were put together as a team, along with three or four other people, to do mergers and acquisitions. That's what Jim did, drawing on my knowledge and contacts in the furniture industry. We did a lot of public offerings, secondary offerings and mergers. The industry was growing and prospering, and it kept getting bigger and bigger.

Jim eventually got to be the head of the mergers and acquisitions department, so we brought in Howard Armistead. Howard was one of Jim's best friends. They had worked together at Ernst and had also served together in the Air National Guard. We had this whole little group going and it caused a lot of jealousy within Wheat because these other investment bankers were out there knocking on doors trying to find deals, and here I was hearing about this person needing this and another person needing that. Some of the companies came to us and said, "We need to do this." The president of Weiman [Furniture] came to me one day. Weiman was a public mini conglomerate. It had a furniture division. It had another division that ran photography retail shops.

INTERVIEWER:    Weiman was a specialist in occasional tables and upholstery?

EPPERSON:         That's right, in Christiansburg, Virginia, and Ramseur, North Carolina. They had a chance to buy their biggest competitor in the photo business, but they didn't have any money unless they sold their furniture division. So they came to us and said, "We need to sell our furniture division immediately. We need to get the deal closed in 30 days.” I knew one person who could do a deal like that, and that was Bob Spilman at Bassett.

I called Bob and literally the next day he flew to both factories. Within two weeks, we had a meeting with the president of Weiman. He went down to Bassett. I was down there with one of our other investment bankers. Bob threw us out of the room. He just wanted to talk to this guy from Weiman. Before the deal started, we were asking for say $10 million — not the actual number — and the president told me the least he would take was $8.5 million. So Bob gets me alone in the room — nobody can intimidate better than Bob. He says, "$10 million is ridiculous. What will he take?" I went, "No, I can't do this." He says, “If you don’t tell me, I'm going to throw you out of here and you're not going to get this company sold." I said, "OK, he will not take less than $8.5 million."

So then the president of Weiman and Bob are together, alone in the room. You can hear them talking outside. Then things quiet down. The doors open up and the president of Weiman walks out. "Well, we've got a deal." I stand up and Bob Spilman comes over and grabs me by my tie. He pulls me into his office and slams the door. He says, "I offered him $7 million and he took it. I should have offered him $6." He was furious, because he thought the figure he way paying could have been even lower. Bob Spilman is just one of those guys...

INTERVIEWER:    He was a force of nature.

EPPERSON:         He really was. Every experience that I ever had with him is a vivid memory. The first time I met Bob in person, I'd been down to see Bill Brammer, who was Bassett’s chief financial officer. Bill Brammer back then shared an office with his father, who was their raw materials buyer. Here I am in the CFO's office with the CFO and the CFO's father. I'm asking questions like, "Do you have any trouble finding people?" And, "Who is your biggest customer?" and all that. The father every once in a while would answer the question.

He says, "Buying lumber is just like buying chickens. It depends upon how many chickens are out there, what kind of price you're going to get today or tomorrow." I'm sitting there, I'm trying to talk to him, but the dad's answering the questions. Half the questions I asked Bill Brammer, Bill says, "Bob Spilman won't let us answer that." The only person who can answer that question is Mr. Spilman himself." After we'd spent our time together, I'd say, "May I speak to Mr. Spilman?" He said, "No, he doesn't talk to analysts."

Bill Brammer was the smartest guy, the most under-recognized person in the whole industry. He did so many things. He ran the Bank of Bassett. Bassett used to keep tens of millions of dollars of cash all the time on their balance sheet with no debt. They bought the bank that was in the company parking lot. Bill basically ran that bank and invested their funds and made more money off their investments they had than from making furniture.

INTERVIEWER:    Through investments such as the International Home Furnishings Center in High Point?

EPPERSON:         Exactly, all these things that Bill used to do. I remember one market when I went to Bassett’s big new showroom on the I-85 bypass. I come in, and there’s Bob Spilman. I recognize him from his picture in the annual report. I go over and introduce myself. "I'm with Scott & Stringfellow,” I said. He says, "I know them. The Scott family is a wonderful family." I'm talking to him, asking him question after question, and he couldn't have been nicer. Then he stops me and says, "Look, I'm here to sell furniture. I'm not here to answer questions." He introduced me to Joe Meadors, who was the head of sales. He said, "Joe will walk you through the showroom. He'll show you what we're trying to do. I look forward to seeing you again." As I'm leaving, going out on that front porch, Bob Spilman comes back over to me and says, "Here's my deal. Analysts get two questions. You be thinking about that next market and, when you see me here, I'll give you two questions."

So next market, I was prepared with two well thought-out question. I went up to Bob and I said, "Mr. Spilman, do I get two questions?" He said, "Yes, what's the second one?"

This is the gentleman that set up a room to entertain retailers on the cafeteria level of their showroom that you entered through a telephone booth. You went into the telephone booth and you dialed a number. Then that door popped open and you got to this secret area.

They had game tables in there for playing poker and various other games. They had a big TV, and they had a bar. It was so nice. I got invited down there often. I had dinner with the Badcocks and other people on a number of different occasions. They were so generous to me and introducing me to these other people they thought I ought to know.

INTERVIEWER:    Was that one example of how your web of relationships just kept expanding?

EPPERSON:         Exactly, that's what happened. I look back on those days and think, "Why did these people take time with me?" I have no idea. Is it because I'm a small-town boy? Is it because my father taught me to say "Yes, sir" and "Yes, ma’am?” I still do. Some people think it's sarcastic. It's not. It's what I was taught to do. Is it because I was polite? Is it because I had polio? I don't know.

INTERVIEWER:    One key element had to have been trust. Over the years, you earned the confidence of top executives throughout the industry.

EPPERSON:         We took Pulaski public when I was at Scott & Stringfellow. The stock was selling for about $18 a share when the underwriting was announced. These are round numbers. I'm not sure I would remember correctly. By the time we did the underwriting, the stock was $30. It was a bigger underwriting and everybody was happy. I was taking Bunny Wampler around and introducing him to all these people around the country. I remember we were in New York. We had probably 75 people in the room who were interested in Pulaski because Pulaski was making some of Levitz Furniture's best-selling bedroom suites.

INTERVIEWER:    This would have been the Wall Street community that had come to hear about the company?

EPPERSON:         Every one of them. These were primarily money managers running mutual funds and bank investment funds. It was a “who’s who” of people from the financial world. They're there to see Bunny. He's going through slides like we used to do, and one of the guests got up. He said, "It bothers me. You've shown pictures of your factories. You've shown all your financials, but you don't have any pictures of your product." Bunny says, "I'm afraid if you saw the furniture we'd make, you wouldn't buy my stock." Of course, that's when he was making the La Boheme collection and those kind of things — the heavy, gaudy plastic stuff.

INTERVIEWER:    When Mediterranean styling was still popular?

EPPERSON:         Exactly. His wife Joanne was with me once, and I said, "Do y'all have your furniture in your house?" Bunny says, "Oh no, she wouldn't have any of our furniture in our house." That was the way it was. People weren’t afraid to be honest with me.

Here’s another example. I went up to Pulaski, Virginia, once to spend some time with Bunny. I'd heard a lot about the Vaughans and I wanted to meet John Vaughan. Back then Vaughan was a much bigger company than Vaughan-Bassett.

I made an appointment with John Vaughan for 3:30 in the afternoon, and I had a morning appointment with Bunny. I was going to have lunch at Pulaski and then drive down to visit Vaughan in Galax. But, like it did every time Bunny and I got together, my visit ran long. Bunny, who grew up in Galax, near Vaughan’s headquarters, said, "Here's how you go. Don't take the big road. You get off here and it will cut an hour off the trip."

So I'm driving down this road and, all of a sudden, here is this road to the left. I take it and it goes from being not very good paved road to being gravel to being dirt. Next thing I know, I'm twisting up the side of a mountain. There's no civilization. There aren't even homes up there. I'm thinking, "Oh my gosh. I'm going to die up here.” I'm looking at my watch and it's 5:30. There weren't any phones. There was no place to call. Finally about 6 o’clock, I go rolling into the Vaughan parking lot. I'm very embarrassed. I knock on the door, and John Vaughan opens it up and invites me in.

I explain to him what happened, and he laughed. He said, "Yep, you took Bunny's shortcut. Bunny grew up here. He can do that route in his sleep. I imagine it would be exciting driving it for the first time." I said, "Trust me it wasn't."

What’s amazing about that is that the president of this big company had waited after everybody in the whole company had left to spend time with this stranger from Richmond. There wasn't anything in it for him. It's not like I could help his stock.

INTERVIEWER:    Who else made that kind of impression on you?

EPPERSON:         These people in our industry, they're just so gracious. I can remember seeing Charles Knabusch at La-Z-Boy. One of the things I used to do in the early days of the Scott & Stringfellow Home Furnishings Service was interviews. One of my first interviews was with Charlie Knabusch. At that time, La-Z-Boy was doing about $85 million. He said, "My goal is to get this company to a quarter of a billion dollars. If we get to $250 million, that will be where we need to be to be successful and get the La-Z-Boy name out there in front of everybody. He couldn't have been nicer. I got to know his father. And Mr. Shoemaker, the co-founder of La-Z-Boy. I got to know all those people up there. Fritz Jackson, who was their CFO, hated bankers and analysts, but he spent time with me.

INTERVIEWER:    That's interesting, because you’re talking about a whole different region of the country that’s far from your southern roots.

EPPERSON:         I met with La-Z-Boy at their headquarters In Monroe, Michigan. We'd also go to Chicago to see clients, money managers and mutual fund people. While I was there, I’d often drive over to see Flexsteel in Iowa. One day in the 1980s, I got a call from Herb Kohler, asking me if I'd come up to visit Kohler in Wisconsin. This was pretty soon after Masco had bought Henredon, and Herb Kohler wanted to know more about the furniture industry.

So I flew to Chicago and I drove up to Kohler. Herb Kohler was there along with several other people. The corporate attorney, Natalie, was in the meeting, who I learned later was Herb's wife. I kept saying, "I've got to go,” because I had a 2 1/2-hour drive back to Chicago. He kept saying, "No, you're fine. You're working." So we kept talking and talking. He brings in some snacks. We talk some more.

It gets to be 6:30 or 7:00 at night. There aren't any more flights back to Richmond at that point. I can't get home. He turns to Ed, who was my contact at the company, and says, "Ed, take Jerry out to the airport and get him home." Ed and I go out. I leave my rental car with Ed and we take his car. We go out to the airport and they've got four company jets. One of them is waiting for me. I climb in the corporate jet and they fly me back to Richmond. That's nice. It was wonderful that they'd do that.

Soon after that, they bought Baker. They wanted to buy Drexel, and there was a big competition between Masco and the Kohler people to buy Drexel. That went back and forth. Kohler had competed to buy Henredon, too, so they were fighting Masco every step of the way.

I got invited up to see Masco in Taylor, Michigan. This was when they had bought Henredon. I don't know if they'd bought Drexel at the time or not, but we were there talking in detail about the furniture industry, changes in distribution, all these different things that were going on. The senior Mr. Manoogian was still alive. He asked if he could take a break.

They had just built this new wing at their offices with all this beautiful art up on the wall. Mr. Manoogian’s son Richard took me over to it and kept showing me these different things. I'm looking and I know this is beautiful art, but Victoria, Virginia, didn't have any museums and I never took any classes in art. So I've no idea what I'm looking at. He keeps saying, "Do you recognize this piece? How about this one?” I said, "Look, I've got to be honest with you. I don't have a clue what I'm looking at. I'm from a small town. I don't know anything about the art. These are pretty pictures. I don't recognize any of these artists. The only thing I can tell you is these frames have some of the most beautiful carvings I've ever seen."

In doing my homework before my first meeting with the Masco people, I had learned that the Masco and Kohler people don't like each other at all. So I always was careful about what I said about each of the companies when we were together.

INTERVIEWER:    You clearly had unusual access to most of the industry’s top leaders.

EPPERSON:         The people in our industry are just so great. Clyde Hooker always took time with me. We would have long talks. The Lanes took time with me. I just went up to Minnie's funeral in Altavista last year, and it just really touched me because I'd go call on the Lanes and B.B. would take me aside and spend time with me when he didn't have to. They just were so gracious. He introduced me to his wife, and she treated me in their home like I was somebody.

Back then, it was the norm for a lot of these companies to pay a small dividend each quarter and then at the end of the year pay an extra dividend. That extra dividend reflected how good the year was. You knew you were going to get a check for a little bit every quarter, but the end of the year, that was the dessert. If you had a good year, you would get a big check.

One day, I’m with B.B. Lane, and he tells me, "I want you to call me the minute Bassett announces their year-end dividend. If I'm not available through the phone, tell whoever answers the phone to get me.” From then on, every time Bassett declared their year-end dividend, the first thing I did was get hold of B.B. This is before cell phones or anything else. You'd call the office and say, "Go out on the factory floor and find him.”

The Bassett fiscal year ended in November, so their year-end dividend was declared before Lane’s end of the year. Finally, one day I said, "Do you use the size of the Bassett year-end dividend to help you determine what you're going to pay?" He laughed and said, “Goodness no. Minnie's got a lot more Bassett stock than I do Lane stock. Our Christmas depends upon how big that Bassett dividend is. That's why I want to know what it is."

The furniture industry has always been filled with interesting characters. Like Joe Shoemaker, who used to run Coleman Furniture in Pulaski. I remember going into his showroom and seeing him. We're sitting down in his office and he leans forward and pulls out this big 45- caliber pistol. He lays it on his desk and says, "I guess I won't need this with you."

INTERVIEWER:    Now there’s a conversation starter! Jerry, let's go back just briefly to your time at Wheat First. When you left Scott & Stringfellow in 1976, what happened to the Home Furnishings Service?

EPPERSON:         When I left Scott & Stringfellow, I obviously couldn't continue to do the Scott & Stringfellow Home Furnishings Service, so my assistant there kept that going for six months or a year. She tried her best, but as soon as I went over Wheat First, I started a new report called the Furnishings Compendium. It contained much of the same types of information, but we completely changed the format into more of a monthly magazine.

I was making good money at Wheat, and not just from my normal salary and commissions on stocks I was recommending. I also was getting a cut on these deals that we did, and some of these deals were a pretty good size. Because of all the business we were generating, I was the only analyst who had a full-time assistant.

At one point, the firm had bought a group of eight or 10 Super 8 computers, a predecessor to the Mac. They put them in a room on the floor below us, and you had to book time to use them. You got an hour at a time. My assistant was going down there and booking time when we needed it. But it got harder and harder to get time, so I just went out and bought my own computer for our use. But instead of buying the Super 8, I bought the first of the 128s. You would have thought we had shot somebody's goat. Everybody else in our department just got so upset.

INTERVIEWER:    Because you had this equipment, and they didn’t?

EPPERSON:         They all said, “Why does he get his own computer and everybody else has to book the time?” I said, “Look, I got my assistant a computer so we would be more efficient. If she’s not using it, you’re free to use it, but keep in mind it’s my computer, for our use first.” As a company, we were running out of capacity. Eventually, they got everybody in the department their own computer, but by that time, our little group upgraded to Macs, and it was as if we had stabbed them all over again.

INTERVIEWER:    Were those internal politics part of what led you to launch your own firm?

EPPERSON:         I never was very popular in the department, and I'm not a very good politician. Scott & Stringfellow, where I started my career, was very much a family company. You felt like you were part of the family, and you knew everybody who worked there. It was a reasonably small company. I don't know if we had even 100 employees when I was there.

Wheat First, in contrast, was six or seven times bigger than Scott & Stringfellow. And when I went over there, I was one of the very first people to go from Scott & Stringfellow to Wheat, from the small firm to the big firm.

Scott & Stringfellow over the years had stolen a number of people from Wheat, but I was one of the very first to go the other way. I didn't realize that at the time. I learned it later, but it made a lot of people at Scott & Stringfellow feel very angry. I hated that because they were so good to me. They gave me my break that enabled me to get going.

The first week I was at Wheat, the retail analyst, a guy named Jack Kawa, invited me to bring my wife over to his home for hot dogs. Kathy and I go, and meet Jack’s very nice wife and two little blonde girls.

We're eating dinner, and I said, "Jack, this is just so nice of you." He says, "Well, this will probably be the last time. We're not always going to be nice to you." I said, "OK." He says, "Look, I just want to explain to you. You seem like a nice guy, but there's a finite bonus pool that we share. My goal is to get every dollar of that bonus pool. The way I look at it is any dollar you get is a dollar I should have gotten. When it comes to office politics, when it comes to everything else, just know, don't take it personally, but it's the way things work at Wheat."

Kathy and I went home that night and said, "Have we done the right thing?" because it was a very competitive business. The Scott family was very wealthy and, again, the nicest people in the world, but they started their brokerage house like a lot of the brokerage houses: to get their own seat on the exchange rather than paying someone else a commission to do their deals. With their own brokerage house, they could basically get their trades done for nothing and also make money off other people’s trades. That's how most of the big brokerage houses started.

On the other hand, at Wheat First, Jim Wheat’s father had started the company. It was a shoestring operation. They were under-capitalized most of the time. It was always, "You need to make us a profit. If you do, we’ll share it.” That's why I went over there. Jim Wheat says, "Look, I'm going to give you a certain percent of every dollar you bring in." That gave me an opportunity to make some real money, and I did.

Jim and I and the other couple of guys who were there — including Ed Crawford and Ed Morrisette, who were great guys — brought in some good deals. When we did the underwriting for LADD in 1982, it was the biggest underwriting Wheat First Securities had ever done by itself. It was a huge, huge deal.

Based on the size of that deal, I figured I was going to get a very handsome paycheck — around $75,000, which was a lot for the time. But when the time came, I got a check for $50,000. I went to my boss and I said, "There's something wrong here because if you look at my deal, I'm supposed to get $75K." He said, "No, you're getting $50,000." I said, "I don't like that." He says, "Well, look at it this way. It was a complicated deal. It was a lot more involved deal than anything you've ever done before so there were a lot more people and expenses involved." I said, "That comes out of my 15 percent, not out of your 85 percent?" I had a very bad attitude, but $25,000 was, and to this day remains, a lot of money to me.

I ended up appealing that decision. They had a formal process to appeal questions relating to bonuses and compensation. During the review, the president of the company finally takes me aside and says, "Look, here's the story. We never paid a salaried employee a bonus like that before. You're the first. If our commission-based employees, such as the stock brokers, bring in a commission, then they earned that, but we're not giving a salaried employee a bonus like that. This is just unheard of. It's over the moon. Most people who are in the decision-making process argued that you shouldn't get that. All you did was introduce us to this company which you already knew."

I said, "But I went around and sold the stock. I worked on all of the details of the transaction.” He says, "We know, but this is what we think is fair." I said, "I don't agree that it's fair." Finally, he said, "Jim Wheat says $50,000 is the right amount. That's the end of it."

The bottom line is that was a huge check and it made for a nice day, and we had many more of those over the years. Some years, we'd do as many as five or six deals. Some years, we’d do two or three, or one or two. But we were always busy.

INTERVIEWER:    Did you always focus on furniture while you were working at Wheat First?

EPPERSON:         Jim and Howard always did other stuff, but I didn't do anything but furniture or mattresses the entire time. They kept putting pressure on me to do carpets, to do housing, to do a lot of other sectors. But I had no interest. I thought I had a full-time job just doing furniture, and no one in the carpet industry knew me. Nobody in the housing sector knew me. But people in the furniture industry knew me and I could relate to them. We were always under that kind of pressure to do something someplace else, and they seemed to think you could just start over in another sector and create the same level of recognition and knowledge that I had built up in furniture.

I kept explaining, "You can't do it that way." It just came so natural for me. One day, I'd love to just sit down and think of all these wonderful stories of how I met these people, where I met them and the different things they taught me over the years. It would be a delight to do.

I love Mike Dugan's book, “Furniture Wars.” I think it's an excellent book. One time I asked Mike, "Was it a coincidence that all these extraordinary things happened at companies you happened to be working for?"

While the industry has so many great people, I've also met my share of shady characters. Some of the people, like Webb Turner, weren’t exactly the most ethical people. We were very blessed, because we didn’t work for him. We knew Webb was a problem.

INTERVIEWER:    As your industry knowledge deepened, did you develop an innate sense for who was worth developing a deeper business relationship with, and who you should avoid?

EPPERSON:         Absolutely. One time, Wheat First was asked to do an evaluation on a company. Evaluations are used to determine taxes or estate values when you're going to give stock to your children or something like that. Well, it happened that Webb Turner wanted to buy the company. He came to us and said, "Look, I'll pay you a huge fee if you'll just tell them that the value is this instead of that." We met and said, "We can't do that. That's just not us." We recognized that we’d be doing wrong, so we told him “no.” He then went to the company and accused us of lying and blowing smoke, saying that we didn't know what we were doing and all this stuff. He got just furious with us. He was saying things to other people about us and our ethics and all these different things.

Later, I get a phone call from Webb Turner who says he wants to come visit with me. I agreed. We met, and he couldn’t have been nicer. Oh my goodness, what a wonderful guy. It turns out he needed me to talk to some of the bankers he was working with because they didn't understand the furniture industry. They wanted to hear about the furniture industry from somebody else. I said, "Webb, you really don't want me to talk to them. What if they ask me what I think of you?”

But most of the people in the industry, especially the retailers, were top notch. Hyman Meyers was one executive who taught me so much. He used to meet me at the New York Deli here in Richmond on Cary Street near Heilig-Meyers’ old corporate headquarters.

Early on, it bothered me that Heilig-Meyers sold primarily low-end furniture on credit with huge interest rates. Hyman said, "You've got to understand these people wouldn't have had this furniture otherwise. They couldn't afford this furniture if we didn't provide them with credit. We're helping them." The more I listened to him and the more I watched what they did, the more I learned to understand he was exactly right because they carried their own credit. They didn't try to find somebody else to bank this. They banked it.

INTERVIEWER:    The risk was on them.

EPPERSON:         The risk was 100 percent on them and their credit. If you looked at the way he paid his bonuses, he didn't pay his bonuses based upon sales. He based his bonuses on collections. He didn't care how much you sold. He wanted to know how much you collected on what you sold.

INTERVIEWER:    The backbone of their business was that ongoing relationship with a customer and eventually their customer’s kids.

EPPERSON:         That's exactly right. In the smaller towns where they operated, they didn’t have problems with determining who was a good risk and who wasn’t, because everybody knew everybody. That was the strength of their business for years and years. It's only when they started going to the bigger cities and got outside of their territories and began offering other kinds of credit that they began to have problems. They eventually made too many acquisitions where they didn't do the homework and there wasn't a good fit.

INTERVIEWER:    Did you do work for Heilig-Meyers?

EPPERSON:         We sold them Sterchi Brothers and several other chains. Of course they're all neighbors. Bill DeRusha, who was the president, worked with Jim Mann for a couple of summers when they were both at VCU. They knew each other. Bill lived right around the corner from me. When I built my pool, Bill took me to his house and showed me how his pool was built. He basically helped me design the pool at my house. I needed it to exercise my leg. Bill was just tremendously helpful. We also were in the Jaycees together and that was fun.

INTERVIEWER:    Tell us about when you and Howard and Jim made the leap and started your own firm.

EPPERSON:         In the 1989-90 period, we began to see a lot of turmoil in the brokerage business. Drexel Burnham went out of business. E.F. Hutton went out of business, and so did a couple of others. At the same time, the larger regional firms — what they called the super regionals — began to recruit some of this New York talent to learn how to do business in a bigger way. That’s when Wheat First brought in a guy named Bill Coogan from Goldman Sachs to show us the New York way of doing things. He had a very different approach. He didn’t want us wasting time with anybody where we didn't see a fee in six months. He also didn't want us wasting time on anyone where a fee wasn't going to be at least $250,000. And it had better be over $400,000 or you weren't going to get any bonuses from it.

What he taught us was exactly the opposite of what Jim Wheat had taught us.

At one point, Bill and some others came to me and offered me a chance to participate in a “coup.” Bill was going to lead a group of other younger managers and try to take over the company by throwing out Jim Wheat and his peers. I wouldn't join. I had no interest. Mr. Wheat had given me my big opportunity and he'd been a very valuable part of our business.

As this was going on, Mr. Wheat made the decision to retire. So Jim, Howard and I starting talking amongst ourselves. We looked at our average deal size and, while we were typically doing three to six deals a year, each of these deals was smaller than what Coogan said our minimum was. If we still did all these deals, we weren't going to get any payouts on them.

One day, we did a deal, and the fee was around $50,000. At our regular corporate finance meeting, Bill Coogan gets up and says, "Who here did a deal last week?" Howard raised his hand. He says, “We handled a transaction. Jerry got us involved with it. We collected $50,000."

Everybody laughed at him. Coogan says, "How can you waste your time with that?" He said, "I didn't. Jerry just introduced these two people. We didn't spend any of our own time on it." Coogan continued to complain that, because of its small size, the deal has been a total waste of time. So Howard says, "Did anybody else in here bring a dime?" The room was quiet.

When Mr. Wheat retired, we looked at each other and said, "Why are we staying?" He meant that much to us. We went to him and we said, "Look, we're planning on leaving. We're going to start our own little firm." He encouraged us. Jim Mann left first. Then Howard left two weeks later. I waited until April 1 because, on March 31, I got a bonus payment that was worth waiting for. Once I got that deposited, I handed in my letter. The night before I resigned, I sat down and wrote 50 notes to different people at the firm to say my goodbyes. At that time, the firm had about 2,000 people. I put the notes in the inter-office mail so they got it.

At the same time that was happening, we all were settling into a new corporate headquarters on Canal Street. We’d moved in December but I hadn’t unboxed my stuff, because I knew I was leaving. People kept coming by my office and getting angry at me because I hadn't unboxed my stuff. I kept saying, "I'll get to it. I'll get to it." But on the day that I handed in my resignation, this moving company comes in and starts hauling all my stuff out. I owned my furniture, my secretary’s furniture and some furniture in other people’s offices as well. I did that because I didn't like the cheap furniture that the firm gave you. If I was going to have an office, I wanted to have a decent office. So the moving company comes in, puts down plywood on the floor to protect the carpet and starts hauling my stuff out.

People kept coming by, "What's going on? Are you redecorating?" I said, "No, I'm quitting." It got a little heated. About a week later, I get a call from the president of the company. His name was Jack McElroy. He headed up the corporate finance department for many years and Jim and Howard reported to him before Coogan came in. Jack says, "We have to have a talk. I understand you can leave. That's no problem. That's a personal decision, but I have evidence that you're recruiting some of our people, and we're not going to stand for that. If we have to, we'll get a legal injunction against you." I'm mystified. I don't have any idea what he's talking about. He said, "I've got proof right here in my desk. It's the note you sent Jim Wheat. You said to Jim Wheat that if he ever got tired of working here, there'd always be a desk for him at your new place." He said, “First, I'm mad that you offered Wheat a job and, secondly, I'm equally mad that you didn't offer me a spot!”

INTERVIEWER:    What happened to Wheat First’s furniture practice after the three of you left?

EPPERSON:         They assigned the furniture sector to John Baugh, the carpet analyst. He's done a wonderful job, but he focuses his attention mostly on the stock side of the business. He likes writing the reports and recommending the stocks and all that. He still does it today, just with a different firm. He left Wheat First after a while, too.

But he never did the work with the private companies like I did. He didn't go and do the newsletter I did. He didn't do any of that stuff. He had his carpet franchise, and he did in carpet what I had done in furniture.

INTERVIEWER:    You said earlier that you didn't like the term consultant. But you certainly acted as a strategic adviser to a lot of companies in the industry.

EPPERSON:         When we took Pulaski public, we worked with a CFO named Jason, who was a very shy person. To tell you the truth, he was more talented than he had self-confidence to realize. He felt very uncomfortable about writing earnings releases. So, Bunny and Jason would send me the numbers when the company’s quarter was over. I'd write the press release in the way Wall Street wanted to see it, and I'd get it back to them.

Then when they had their next board meeting, they would release the earnings. I would then see the earnings and go, "Look at that. They had a great quarter." That's not illegal. If I had taken that information and acted on it, that would have been illegal. People sometimes don't understand, but I had that type of close relationship. I would go sit in on board meetings with a lot of these furniture companies for years. A lot of times, nothing ever happened, but that's what we did.

INTERVIEWER:    At what point did you stop recommending individual stocks?

EPPERSON:         The change came when regulators said that companies couldn’t share information with outsiders any more. Whether it was acted on or not, you couldn't share the information. As a result, at all of these companies, their lawyers basically instructed the executive committee, "We don't care that you trust him. We don't care that he's never violated your trust. We can't take that risk and so you can't do it anymore." The relationships changed. When those rules changed, that's when I gave up recommending stocks. We had to make a tough decision, because before that, we were selling my research and recommending stocks. But we realized we could no longer do both. So we gave up that part of the business.

INTERVIEWER:    Do you miss being a stock adviser?

EPPERSON:         It’s just not worth the risk. Did that change cut into our income? Yeah, it did, but I don't miss that part of the business. If anyone out there tells you they understand the stock market, they're lying. It's too big. It's got too many pieces and no one understands. I often read that one analyst thinks that this factor caused a drop and another analyst thinks something else caused it. They don't know. They're making up something after the game.

I love it when, after there's a market crash, you'll find that some analyst with some obscure bank that predicted it to happen. If you call for something to happen enough times and it finally happens, you're right — but how many times did she call it before it happened?

The “civilians” who don't work in the investment community would get very disturbed if they understood how a lot of this stuff works. Some of the stock firms, for example, have contests to sell mutual funds or even public offerings, where you can win an all-expenses-paid trip for you and your family to Monte Carlo or to Bermuda or you can win a sailboat or you can win this, that or the other.

I used to get calls every once in a while at Wheat from a young broker who'd say, "I just have to sell $5,000 more and I'll get this sailboat. Please buy $5,000 worth of this stock for me. I'll get my sailboat and then sometime over the next six months, I'll buy the shares back from you for $5,000, whether it goes up or down."

The brokers I would recommend to people who asked were never those brokers. They never played those games.

INTERVIEWER:    Sounds like your ethical approach is a real cornerstone at Mann, Armistead & Epperson.

EPPERSON:         Part of it is our background. Jim's father was a cop. Howard's father was a fisherman on the Chesapeake Bay. We never grew up with any money. While we've been successful, none of us are wealthy enough that we can go place big bets. You don't see us buying companies.

One thing we do have is wonderful offices. We own these two buildings on Shockoe slip. We refurbished them in 1999.

INTERVIEWER:    Is this where you've been located the whole time?

EPPERSON:         When we started our business, on April 1, 1991, we were in the building on the other side of that wall. Howard and Jim’s offices were upstairs and I was downstairs with my assistant and the receptionist, because I couldn’t go up and down the steps. Over time, we met Tazwell Carrington, who owned these buildings. Because of the elevator, the underground parking and storage and everything else, this building was heaven to us.

We bought this building from Taz in ’99 and then spent what I thought was an exorbitant amount refurbishing, but it was the right thing to do. It's a good thing Jim headed up the project because Jim wants things done right. He won't accept things being done second rate. He brought in a decorator and the decorator did things like picking the colors and pickling the wood paneling. He added all these wonderful details, where, if it was up to Howard and me we'd just say, "Paint it blue." It really is very nice.

I think we have the nicest offices in Richmond. We've got a roof garden upstairs. It's just nice, a little private corner.

These buildings are historic. We can't exactly figure out whether they survived the burning of Richmond or if they were built right afterwards.

INTERVIEWER:    The three of you have been a team for many, many decades.

EPPERSON:         Jim and I have worked together since 1978. Howard joined us in ’86. But, again, they were best friends before then. This April, we will celebrate our 25th anniversary at Mann, Armistead & Epperson. We're all still here.

Probably four weeks ago, we were in here with the door closed screaming at each other.  But the last thing Jim said as he left the room, was, "I hate you, but I love you too." It's that kind of thing. We disagree, but in all honesty, I've been a good rainmaker in that I see things that need to be done and try to get our firm to play a role. Then they execute it. We just did the largest single transaction we've ever done in the history of the company.

INTERVIEWER:    Tell us about that.

EPPERSON:         It was a mattress company. I can't give any of the details, but the purchase price was hundreds of millions of dollars. For us to do a transaction that large by ourselves was special. Jim worked especially hard on it. He did a great job, an absolutely phenomenal job.

INTERVIEWER:    Have you done other big deals in the bedding industry in the past?

EPPERSON:         We've bought and sold Simmons a lot over the years with different people. The private equity firms also will bring us in sometimes to help them. Let’s say Goldman Sachs or Merrill Lynch is taking a company around to be sold. A private equity group or a buyer will hire us and say, "Here's what Goldman Sachs has put together in a book that tells us about this company. What do we need to know that isn't in the book?" That's where we come in. As odd as it sounds, if we tell somebody not to go forward on a deal because of something we know, we get a lot more brownie points than if we tell them to go ahead with it.

INTERVIEWER:    How are you compensated in a case like that?

EPPERSON:         Our deal is usually we get paid a little bit upfront for coming on board. Then we get a nice fee if the deal is done. If we tell them not to do the deal, we don't get anything extra, but that assures them of our honesty. They would rather pay us something to learn not to do a bad deal. We've just saved them millions of dollars from getting in a bad deal.

INTERVIEWER:    Does that candor help you secure additional business down the road?

EPPERSON:         Exactly. Some of these private equity firms, when they hear our name, will say, "Oh yeah, those guys kept us from getting into such and such a deal a few years ago." KK&R and a few of the other firms out there are very kind to us because we kept them from doing something they shouldn't. We've even had firms who disagreed with us and went ahead with the deal say later on, "Boy, we wish we had listened to you."

Years ago, when a particular upholstery company was going public, I didn't know the people. So I called Hassell Franklin, and I said, "Hassell, do you know these guys?" He said, "Yep." I said, "They've invited us to do this deal." Hassell says, "Don't do it. They're not your kind of people." We didn't and turns out there was a lot of fraud in that company and a lot of things that went bad. It's having friends like Hassell that tell you, "That's not what you want to do." Again, the fees could be very tempting. Even in that transaction, the people that did that deal got huge checks.

INTERVIEWER:    But if you took a deal like that, would you have undercut your credibility and perhaps weakened your ability to do other deals?

EPPERSON:         Exactly. The worst deal I ever did was taking Cousins — Sid Levitz' company on the West Coast — public. I let my enthusiasm for technology and my belief in Sid’s knowledge get the best of me. The concept was a knock-off of The Brick. It took all of The Bricks’ systems and everything and brought it to San Diego. They had 20-something stores and their plan was to take the concept national.  The early numbers were good, and they had an internal tech system that was just great.

INTERVIEWER:    Technology was the backbone of the operation?

EPPERSON:         The technology thing that Sid Levitz helped start up was slick. You'd buy something and the minute it’s sold, they're routing the trucks to get the product out to you.

INTERVIEWER:    The beginnings of EDI and real-time logistics?

EPPERSON:         Absolutely. All that. It was the first of that. But, unfortunately, while they had that all working on the delivery side, on the administrative and office side, they were still handwriting a lot of their own checks. They didn't have sophisticated cash flow analysis or any of those kind of things. The costs got completely out of control.

Maybe we just asked the wrong questions, but we had clients who invested in that company because of us and those clients lost money. I just hate that, but that's what happens.

INTERVIEWER:    How did you happen to become a contributor to Furniture/Today newspaper?

EPPERSON:         I knew Bill Peterson when he worked for Fairchild and Home Furnishings Daily, back when it was truly a daily. I got to know Bill and had a lot of respect for him. We visited numerous times when he and Steve Pond were thinking about launching Furniture/Today.

We talked backed and forth and Bill was concerned whether the people in the furniture industry would accept him. He felt strongly about maintaining a clear separation between editorial and advertising. He also was worried about competing with Fairchild, but Fairchild had gone downhill with a lot of turnover in the writing staff, and the new people just didn't know anything. Bill was the rock of the staff so I encouraged him. I thought it was a great move. I didn't know Steve but Bill seemed to trust Steve, so that was fine. I agreed to help Bill anyway I could.

When they got going and they realized they needed somebody to talk about public companies and earnings and that kind of thing, they asked me if I'd comment on some things. We just wrote these little blurbs, it didn't take any time, and they were companies I worked with anyway. So I just would write a paragraph and zip it down to him. That's all it took so it wasn't like I was doing a lot of work. My employer in 1976 was Wheat, First Securities. They never knew I did it, so it all worked out just fine.

INTERVIEWER:    Did the reports you were creating for Wheat, First and later your own firm inspire Furniture/Today to develop its own rankings relating to company size and market share?

EPPERSON:         We were trying to provide information of use and avoid redundancy. There's still so little information available in this industry compared to other industries.

I knew a guy named Jack Maxwell who was the dean of the tobacco analysts. He had gotten all the tobacco cigarette makers here in the United States to give him weekly counts on how many cigarettes they made. He got this data broken down by the length of the cigarette, whether it was filtered or not, and whether it was a soft package or a hard package. He published those numbers weekly, and people paid a lot of money to get them, including the tobacco industry themselves.

He could tell you exactly how many cigarettes were made in a week. In comparison, we couldn’t tell you how many sofas were made in a year and a sofa is a lot bigger than a cigarette. So I was very frustrated and I still am. About the only thing I was ever able to count on a regular basis were recliners because of the mechanisms, and when the imports began to have a big impact, I couldn't do that anymore.

INTERVIEWER:    Did you ever have conversations with some of the big players about whether they would be willing to share more data with you?

EPPERSON:         We did that for years with recliners. Both Leggett & Platt and Hickory Springs shared their numbers on mechanisms. And there were two or three independent mechanism manufacturers who also agreed to cooperate. We put the data all together in such a way that no one person could be pulled out of it.

We did this report for decades. Then the imports began to come in and we had no way of finding out how many mechanisms were made in China. The whole survey just lost its impact, so we stopped it in 2010. It just didn't mean anything anymore.

INTERVIEWER:    How did your regular column in Furniture/Today come about?

EPPERSON:         That was pretty controversial at the time because they had never had anybody write a column before that worked for somebody else. I'm not sure that Steve was in favor of it but Bill pushed for it. He was heading toward retirement and they were looking for another columnist to round things out.

I was happy to do it. It was a wonderful soapbox for me to have to talk about just about anything. All they asked me to do was not to do an obvious job of selling my own services, so I'd try to avoid that. The column, along with my many speeches, helped me become a recognized face throughout the industry.

One of the other things that has helped me over the years, I think, is that I'm a fat bald guy on a scooter. You don't get me mixed up with anybody else.

One of my dear friends and neighbors is Willie Lanier, who was the All-Pro Hall of Fame linebacker for the Kansas City Chiefs. Willie tells a story of when he was an undergraduate school at Morgan State in Baltimore. He cracked his helmet one game and they couldn't find another one that would fit him so they borrowed one from the Baltimore Colts. They said, "You can have it, but you can't paint it." All the other Morgan State players wore Morgan State helmets, but Willie wore a helmet with the horseshoe on the side. As a result, everything he got involved in he got recognized for, good or bad. You never mixed him up with anybody else.

After college, he went to play for the Chiefs and his first year there he got caught under the chin and broke two vertebrae. They thought he'd never play again but it healed. One of his doctors made a helmet that had this strip that went all the way across the top of the helmet and attached to his shoulder pads so his neck couldn't go back further than that. His helmet looked like it had a Mohawk haircut and, again, it didn’t look like anybody else's. Anything and everything he did, he got name recognition for. He thinks that's one reason he has as high of a name profile as he does, because everybody knew who he was back then.

In the same way, I think being different has helped me. I'm a fat bald guy on a scooter, so you don't get me mixed up with anybody else. Now, I will tell you in the early days of driving a scooter — when I was still walking but was limited, so I was using the scooter to travel between showrooms — the showrooms were miserable. They weren't laid out for scooters. Some of the showrooms in fact, such as Singer and Peters-Revington, had areas like the old sunken living rooms. They had raised platforms, and lowered platforms, and steps, and I couldn't get through.

Then Louie Blumkin of Nebraska Furniture Mart got a scooter and thank heavens for that. When Louie Blumkin got a scooter and was riding all around market, all the showrooms opened up for scooters. I now could go through just about anywhere because of Louie, so I thanked him many times for being the cutting edge of getting scooters accepted.

INTERVIEWER:    Do you remember your first furniture market and what some of your impressions were?

EPPERSON:         My first market was in 1967 or 1968, when I was a student at UVA. I was working on a term paper and I went to the Lane showroom. I parked behind what we call Market Square today and walked over to the IHFC, which of course back then was the Southern Furniture Exposition Center. I got to Lane and I asked to speak to somebody that B.B. Lane had told me to ask for, and I waited about an hour-and-a-half. Finally, somebody came out and walked me through the showroom and then kind of said, "Scoot." While I was there I just walked around and kind of went, "Wow, this is a huge place!" Then I didn't come back for a couple of years. Since October of 1971, I've gone to every High Point Market but two. One time I had a broken leg, and one time I had a broken hip. Other than that, I've been to every market during that 45-year period.

INTERVIEWER:    Did also you recently drive out to Las Vegas to attend that market?

EPPERSON:         My wife and I drove to Las Vegas in July of 2015. Until then, I hadn't been to Vegas since 2006. I wanted to see how the market had grown, and my friends at Nationwide Marketing Group — a wonderful buying syndicate — were having their conference in Las Vegas at the same time. So I told Kathy we had two good excuses to go. I went to my local AAA and got these wonderful things called "maps," and unfolded them and I laid out my trip.

We started by driving to Nashville, where we visited my nephew and walked through a couple of furniture stores.

Then we went to Oklahoma City and visited the Mathis Brothers store there, where I learned a lot. We went to a couple of good restaurants. From there we drove through Albuquerque and then went through that terrible part of Southern California where, for almost 200 miles, there is nothing — no hotels and hardly any gas stations. Finally, we cut across to L.A. My daughter, her spouse and our granddaughter flew out and met us, and we did the Disneyland experience and the Universal Studio tour, and went to the La Brea Tar Pits. Then they flew back and we went to Las Vegas and spent four nights.

I thoroughly enjoyed it and wow, how that market has improved! Everything is better, including the logistics. When I was there before, the third building was just a dream, so all that was just so new and nice.

After attending the market, we went to see my friend Jake Jabs [American Furniture Warehouse] in Denver. Then we went to Minneapolis and saw the great people at HOM, who now own Gabberts, and saw their new stores. We also visited Traditions, a wonderful chain run by my friend Mike Shuman, and then to Room and Board, started by John Cabbott. I learned so much!

From there, we went down to Arcadia, Wisconsin, which was my first trip to see Ashley. Ron and Todd Wanek were very kind and spent a lot of time with me, taking me through the factory and all that. Then, we went from there to Flexsteel and then back to Madison and Milwaukee, to see some friends. From there, we drove down to Chicago and toured the new Art Van store, The Dump and a couple other local stores. After that, we drove home.

INTERVIEWER:                    That's quite an ambitious itinerary!

EPPERSON:         We traveled for 26 days and covered 6,376 miles. Of course, I didn't drive all of it. One night, we got to a hotel where they were serving a banquet and there was no parking. I had to park a block away. Kathy and I unloaded the car and checked into the Holiday Inn. Before we went to bed, Kathy said, "I think I'll go move the car up into the parking lot off the street." She drove it from where it was parked into the hotel parking lot, so I can't say I drove the whole way. I love driving.

INTERVIEWER:    Any impressions to share about the state of the industry based on that trip? How do you feel about what you saw?

EPPERSON:         The trip completely reinvigorated me in terms of my outlook for the entire industry. When you go through a period of trauma like we did during the recession of 2008 to 2010 — where at times you don't feel like there's any bottom to the industry and we see so many people fail, so many things go wrong — it’s easy to lose hope. We're an industry that is reliant upon factors such as housing turnover, and credit availability to finance a purchase, and a consumer who wants to buy furniture. When we had the banking crisis and the foreclosures, there was plenty of housing turnover and home sales were being made, but they weren't being made to people who would occupy the home. They were foreclosures and all that mess.

Then, in terms of credit, with the banking collapse the banks wouldn't lend to people anymore. What happened was you either got a few people who got credit or they went to rent-to-own or rent-to-buy. Then you had the whole issues of, were people willing to buy? Then we got up to 10.5 percent unemployment rate. Even if unemployment didn’t affect you, your next-door neighbor might be worried about his job, so you didn’t do something yourself, like buy a new car or new furniture.

Umpteen years ago, my wife and I we were about to buy a new car. We had been to the dealership and picked out the car we wanted. I was doing well. But my next-door neighbor, who worked for one of the steel companies, came over and told us he was being laid off, and it would help if we knew of any job opportunities for him. He was a guy with two teenage sons, a wife and nice family, and he was distressed. Well, that night, Kathy and I decided not to buy the car. It would have seemed really trashy to pull up in a brand new car when he's wondering if he's going to be able to make the next house payment.

That kind of thing happens. It doesn't have to be somebody close, it could be a neighbor, or a friend or whatever. It's just that the difficulties of that time period made us all contract, and our industry essentially declined about 22 percent in a period of 18 months. The worse decline prior to that was about 5 percent. And it hit the mattress industry just as hard as it hit the furniture industry. That was rare, because mattresses usually do a better job. That was such a shock, and the economy has been so slow to recover since then.

Every recession since World War II, the economy would overheat and then interest rates would get driven up. Eventually, the higher interest rates would be a drag on the economy. We'd usually get over-inventoried with product and go through a period where we'd have an economic correction. When business got weaker, the interest rates would fall, and the lower rates would spur housing. People would say, "Wow, we haven't seen these mortgage rates for a while, let's go buy a house." Housing led every economic recovery since World War II like that, until this one.

Why didn't it lead this time? All those foreclosures, all that collapse in the financing because we had allowed too many people to buy too many homes with nothing down. The prices were over-inflated, and we had that collapse in home values. Even if you were not involved in a home foreclosure, you woke up one day and your house was worth 25 percent less than it was last year, heading south not north. Of course, the stock market tanked as well, so everybody felt the pinch.

It just devastated everybody, and what furniture we sold tended to be more of the necessity type furniture. The nicer furniture got hit harder than the low end. That’s kind of unusual, but again the low end had rent-to-own as an option. At some point in time, if you have a new baby, you need a crib. There's some level on which furniture is a necessity.

Well, each time we began to see a little strength in the economy we were still getting over the foreclosures and the housing problems. Unemployment seemed to be painfully slow coming back, and the banks were slow recovering. But eventually, we began to see other industries, such as jewelry, bounce back. Consumer electronics, driven largely by the new high-definition TVs, also rebounded. And the travel industry bounced back very quickly. All that started to come back and we're sitting here in furniture saying, "What about us?"

It's only been since mid-year 2014 that we've had any consistency in the industry. If you look at the numbers of all other sectors — durable goods, credit-related sectors, like travel, jewelry, consumer electronics, etc. — all of those had recovered by then to new peaks well above where they were in 2006 and 2007. The only exceptions were furniture and appliances, which are both housing related. Now, both of them are finally getting a big boost and furniture has been the fastest-growing segment in 2015 of all the retail sectors. It's finally our time!

Now, let’s take this another step. When we went through this severe decline, all the young people that were getting out of college who have normally flowed into the economy didn’t have anything to flow into. They were stuck at home or flipping hamburgers. They didn't have good job opportunities, and it didn't make any difference what your education was. Unless you had a family business to go into, or your uncle worked for IBM, you were dead in the water. This whole universe of people for four to five years couldn't set up households as normal. They were stuck living at home, or living with a friend, or living with a relative and making do.

Now, jobs are finally being created again. The unemployment rate is not where it needs to be — real unemployment is still somewhere around 9.5 percent — but this 5 percent unemployment rate is so much better than where it was. We’ve also improved to the point where people are getting salary increases. More people also are comfortable changing jobs because there for a while they didn't dare leave one job where they had tenure to try anything else.

We now are getting this huge surge in household formations, not just from the kids who are coming out of college in 2015, but from the kids who came out of college in 2009 to 2012. They're flowing into the economy and setting up households. Look around: All of a sudden there's a shortage of apartments. The apartment vacancy rate is at the lowest it's been since the end of World War II when all those young people came back from fighting. Just like then, we don't have enough homes being built.

What does that tell you? We're going to have to have more apartments built and we're going to have to have more small homes built. This trend is going to be sustainable for a long period of time because of the abyss that was created during the long recession. This is going to last for a while.

Now, what drives our business? What drives demand? Household formations. Residential turnover — whether it's from apartment to apartment, apartment to first home, first home to second home — we don't care as long as you're moving. All that's turning around more quickly.

We did a study in 2012 where we tried to make the industry recognize that we are in a very special position. Americans, historically, if you looked at the average home, you had at least one or two commuters — whether it was commuting to school or commuting to work. That was kind of the way we lived. The average home would have 2 or 2.2 cars, something like that.

Well, fast forward to now, and all of a sudden we're in a period of time where more people are working from their homes. And more businesses are encouraging people to work from home. People working from home will work longer and some argue harder because they don't have commuting time and expense, and they don't have the distractions that you have at work.

Then, you've got more young people taking courses anywhere. You look at some places like Southern New Hampshire University, a huge program that's going out nationwide. You look at some of these different programs where kids can get legitimate, real degrees, and not have to live on campus. That's exploding. Even high school students now are taking courses elsewhere other than their own school for credit. Just because their school doesn't offer it doesn't mean you can’t take it from another school.

Then you get people shopping from home and no one doubts the growth of that trend. So, when you consider all these developments, in the future, are we going to need all our cars? Are Americans going to continue to go to central cities and work?

If you look at La-Z-Boy's new corporate headquarters, very few people have permanent offices. There are lots of temporary workstations. You come in, you're assigned a workstation and a phone number for the day, you sign in on the computer and you do your work. You leave when you want to. With this approach, you don't have to pay for the real estate for every one of those people to have their own exclusive space. There's a lot of this going on.

INTERVIEWER:    For decades, the industry has been stuck in a cycle where the percentage of discretionary income the consumer spends on household furnishings has changed very little while other product segments, such as consumer electronics, have scored big gains. Do you think we may be entering a period where furniture finally gains a larger share of consumer dollars?

EPPERSON:         Yes, I do. This situation in the past has been very frustrating. Some of it's self-inflicted because of our pricing. But these new societal shifts should create new opportunities for anything that's home-oriented. My favorite church service, I now watch from home. I can Skype my doctor if I don't feel like going to see him. There's so many services you can do now from home, and even pre-shopping so you don't spend as much time driving around. I just think that the home is going to become a much greater focus for Americans from now on.

Consider Herman Miller. Herman Miller's president Brian Walker made a speech in 2013 in which he said, "We got to find a way to get in the home because we're not going to have as many people commuting to an office like they used to.” What have you seen them do? They bought Design Within Reach. The other big office furniture companies also are trying to figure out how to get into the home. It's going to happen — they've got to find a way.

INTERVIEWER:    What do you think of past industry efforts, such as the Home Furnishings Council, to promote the furniture industry as a whole to consumers? Is there any value to the industry getting together like that, or any lessons learned from what has been done in the past?

EPPERSON:         I'd love to think we could get together and do something meaningful. I remember 1972 when we had Debut ’72. It was a joint marketing program sponsored by Hercules and DuPont, and we were going to show America how to decorate and, in the process, help home furnishings capture a higher percentage of consumer spending. There have been a number of those efforts over the years. But the truth is, it’s often the case that La-Z-Boy or another big competitor is in favor of a joint program, then there are 10 companies who are against it. I don't care who the company is — they're just not all going to cooperate on anything no matter how good the program is.

When Jimmy Carter was president back in the late 1970s. I got an invitation to the White House. When I heard about the invitation, I doubted it. I made plans to go, but never took if very seriously.

The time came for me to leave one morning. I was planning to drive my old 1969 Camaro convertible, which I had bought from a friend of mine.  They had gotten it as a wedding present from her mother, and when they got a divorce I got the car. I drove it until 2005. In 1973, when I bought the car, everybody said, "Why do you want that old car?" Then by about late 1990s everybody was saying, "Wow, I love your car." So I was getting ready to drive that Camaro to Washington, but Kathy said, "No, you're not."

She made me come back in and put on a good funeral suit for the trip. She wanted me to dress up and take her Mercury station wagon to the White House instead of the Camaro. I wasn't going to waste the trip in any case. I had other clients in Washington and friends I could go see, so I drove up there. I figured I'd pull up to the West Wing of the White House and somebody would say, "Who the hell are you?" I'd then back away very embarrassed and drive off.

Well, when I pulled up to the West Wing of the White House, they said, "Mr. Epperson, we're expecting you. Please pull in here.” You could have knocked me over with a feather. I was just blown away. I pulled up in front of the West Wing of the White House and, without thinking, quickly got out. It was the first car I'd ever owned with electric door locks, and as I got out, I hit the lock and closed the door. One of the White House guards, dressed in the fancy uniforms they used to have, looks at me and he says, "You didn't just do that, did you?" I said, "Yes, I did." There was my little Mercury station wagon with the engine running and all the doors locked and the key still in the ignition, of course.

The guard and I finally went inside and I went through some very basic security work. Of course, anytime you wear a metal brace, going through security is always fun. We later found out that Vice President Mondale had some coat hangers, which they used to get my car unlocked.

After the security check, I was shown around the White House. I was shown the Roosevelt Room and Cabinet Room, as well as the Oval Office, and then they put me in an office.

There, I was introduced to two people that wanted to talk to me about why the furniture industry had such a good record on inflation. Our inflation was very low compared to almost any other product. Of course, a lot of it had to do with the fact we were so competitive and we had lots and lots of vendors. We didn't have one company that really dictated our pricing — instead, everybody was cut-throat about shaving prices to the bone. Well, it turns out that Carter and his team had asked me to come to the White House to talk about an industry that had products out there that were beating inflation.

INTERVIEWER:    That was during a time period when the nation was still trying to “whip inflation now?”

EPPERSON:         Yeah. They wanted to use the furniture industry as an example of an industry that was keeping prices down despite rampant inflation. They asked, "OK, how would you do it?" I'd been in the industry six or seven years by then, and I said, "The first thing you got to do is involve the associations." Back then, we had the Southern Furniture Manufacturers Association, and we had the smaller National Association of Furniture Manufacturers up north, and those were just the manufacturers. We also had NHFA and all these different regional retail associations.

After that meeting, I went back and visited with the people at the Southern Furniture Manufacturers, which was the largest single association. I brought it up to them and they all went, "Hmm, this is interesting." So we get like two or three of their guys, and a couple of guys from NAFM, and a couple of guys from several of the retailers, and we all go back up to Washington and have a meeting. Two or three of the top aides to Carter come out and talk to us, and explain how they'd like to set up a big photo op sometime and have different people representing the industry speak. It would create an opportunity for the president to recognize what a great job we were doing on inflation.

Well, I was feeling pretty good. I thought, "Boy oh boy, everybody's going to pat me on the back for this." But just the opposite happened. Two of the associations contacted me immediately and said, "We can't have anything to do with this, it would look like we were colluding on price. We can't do this." I said, "But it's the chance for some of the greatest publicity ever.”

The idea just died. I was invited to the White House one more time to talk about the proposal. They asked me, “Can we just go directly to a handful of companies and do this directly and not involve the associations?" I said, "You probably could but I can't help you. It'd cost me my career."

INTERVIEWER:    For the industry, this situation has been both a blessing and a curse.  Prices have stayed down and that's something that benefits consumers, but in most cases, nobody is aware of what a great deal furniture is compared to so many other products whose prices have skyrocketed.

EPPERSON:         We get no credit for that at all. The consumer buys furniture so infrequently that they don’t really understand how prices really haven’t gone up much, if at all. We tell the story of a young lady getting out of college and buying something for her first apartment. She's got a job, and she doesn't know if she's going to stay there very long, so she buys a very basic $399 or $499 sofa for the apartment. The color doesn’t matter — she just needs a sofa. Then, a few years later, she may be married, she may not, but she's getting ready to buy her first home and she buys another sofa and this time she pays $899 for it so she can get the styling she likes.

Then finally she gets married, and she's going to be in a home where she’ll live for a while. She and her husband want a custom-order fabric, so they pay $1,300 for their new model. At that point, she turns to her husband and gripes, "I remember when sofas were only $400." Well, it's not the same thing. Each time, they bought a different product with different features and quality. It’s as if they started by buying a Hyundai or a Kia, then bought a Buick, and then bought a BMW or Lexus. If they were buying a car, they’d recognize the difference. But, with furniture, they don’t have a clue about why the pricing may be different from product to product.

Since we don't have that stratification, we don't get any of the credit for that. So a sofa's a sofa. We live in an industry where you can put a $20 per yard fabric on a frame or you can cover it in a $3.25 per yard type of fabric. Both sofas look great. The tailoring may not be perfect on one but from a distance they both look fine. The shopper will ask, “Why should I pay you $1,200 for this sofa when over there is a similar model for half as much? What’s the difference?" As an industry, we don’t do a good job of explaining what sets them apart.

INTERVIEWER:    Does the industry’s ability to deliver rock-bottom prices also hurt it?

EPPERSON:         Groupon was offering a $249 leather sofa last week. I had to print that off because it's just hard to believe. This rush to the bottom price wise just bothers me so much. What are we doing to ourselves? Once you sell them that sofa, they’re not going to buy another one for 10 years or more. It's just so sad.

To be honest, there's no identity. What's the difference from product to product? This one's got tail fins and that one doesn't? The consumer doesn't know the difference with furniture.

The people that I admire so much in our industry are the mattress guys, because they have nothing to sell but a white rectangle. They're selling identical rectangular slabs. Whatever cover you put on it, whether it’s nice or drab, the bed still is going to be covered up. The consumer when they go in to the store usually has no idea what's inside. Is it gel? Well, if it's gel, is it toothpaste? What is it? We don't know what's inside. They're reliant completely upon the identity of the store, the manufacturer and the salesperson, to explain to them.

Because they don't have the ability to differentiate themselves by scale, size, style or color, mattress folks have had to become much better marketers. When you go into a showroom and the president of the company takes you aside, like they used to with me, and they say, "Come here, I want to show you this," and you lay down on a mattress, to me it feels a lot like the mattress I slept on last night at the hotel. In fact, it feels a lot like my mattress at home, which also feels like the hotel where I stayed in a week ago.

But you're lying on the mattress and he's so excited, and he explains to you that for the very first time they've developed a double reverse left-handed helical coil. He insists that they are the first in the industry to offer this feature. You don't have a clue what he's talking about, but he's so excited about it you want to believe him. You tell him, "Oh my God, I was wondering when you were going to do it. Congratulations on being first, this is just fabulous!" They all do it.

INTERVIEWER:    Do you think we'll ever get to a point where we create similar excitement with furniture?

EPPERSON:         We need to, but the truth is that the differences between products are difficult to recognize.

Kathy and I were in bed one night. She was reading. And I started watching this dumb black-and-white movie. After a while, I was focused more on the furniture. It was shot during a time before we had TVs. Instead, they had the big old radios. I asked Kathy to stop reading and look at this movie for a few minutes. It was all inside this home. She said, "What am I looking for?" I said, "Except for the radio, every piece of furniture in there is still available today and is current. There's nothing in there that would be looked at as odd or unusual if you saw it in the furniture store today." This film was made in 1942. What does that tell you?

To my eye, there are two different models of furniture, and we don’t do a good job of communicating to the customer what they are. There's either furniture that's made and then sold, or there's furniture that's sold and then made. It doesn't get any more simple than that.

In the first case, you’re dealing with a store like Rooms To Go, where you go in and every item they've got on their floor is backed up by hundreds in a warehouse somewhere. You pick out the item, but it's got to be that item in the specific colors they have available. We can give you three of that item if you want that item, but it's got to be that item.

In the second case, you go into a high-end store and you walk through and see furniture lined up or shown in groupings. Most of the time they do not explain to you that everything in here is just to give you a sample of what can be done. They should be saying, “Don't look at that sofa as a black leather sofa. Try to imagine that sofa whatever length you want it, whatever depth you want it, whatever leather you want. This is just a sample of what these guys can do. Don't buy what we have here. That's not what it's there for — it's just there to be a sample. Let's find exactly what you want, what's right for your home."

The exception is a company like Ethan Allen. They’re currently doing 50 or 60 percent of their sales by going into the consumer’s home and helping them realize what they really need, as opposed to having to buy what we have on hand for them.

It all started with Nat Ancell, the co-founder of Ethan Allen with Ted Baumritter, his brother-in-law. Nat was so smart and so ahead of his time. Nat ran Ethan Allen for many years and developed so many people throughout the industry that have achieved great success, like Pat Norton and many others. Nat talked about how the American consumer goes into a furniture store and sees a product that's beautifully displayed. It's with a coordinated floor covering, it's up against a wall that's got a coordinated color, the print on the wall is chosen because it coordinates — everything's perfect. So they buy that sofa and take it home, but when they put it with a neutral carpet, against a neutral wall, the sofa doesn't look nearly as good.

They end up feeling like they've been somehow gypped. But nobody gypped them. The problem is that most Americans are scared to make a decorating mistake so they use off-white walls and neutral carpet colors and everything looks washed out. It's true in my house. Now, my daughter goes just the opposite way. You go in my daughter’s house and one wall will be red and another wall will be purple. Truth is, paint is cheap. You can go in and make those rooms whatever you want them to be.

But most consumers are so scared of making a mistake that they don't get the joy of really coordinating their furnishings. They don't have the joy of fitting it together, and I think that's such a shame. It's not the consumer’s fault — it's our fault because we're not telling them what the difference is.

INTERVIEWER:    What role does brand play in building consumer awareness?

EPPERSON:         If you look at the brands in the mattress industry, there are a number of great names that consumers recognize. There are names the consumer can name, which is always a plus, but do they really understand the difference from brand to brand? When you think of Serta, is that a Chevrolet? Or is that a Toyota or Lexus? Today, Simmons and Serta and Sealy all are more or less soup to nuts in terms of pricing and product range. Even Stearns & Foster, which was once a step-up brand, has a pretty broad spectrum.

Ethan Allen has an image, I think, that equates with quality. Companies such as Henredon, Drexel Heritage and Baker all have a certain image of quality, too, but the problem is that while they're known within the trade, they’re not well known by the typical American consumer.

Even the names that people know — like Broyhill, Lane, La-Z-Boy and Bassett — are not clearly defined and differentiated like a Hyundai or a Buick. They're all over the map.

We have a long way to go to get to the point where you go to your friend and say, "Hey, I just redecorated my house! You have to come over and see my new Bassett furniture.” You might say, you just bought some new furniture from your local retailer, whoever that might be, but even that is less common than saying “I just bought an iPhone!” I don't think that level of excitement is true with many of our furniture brands.

INTERVIEWER:    Has the fragmentation of the industry held it back?

EPPERSON:         That’s been a big challenge. You have to give it to the people at Ashley. Ron Wanek said he wanted to create the Walmart for our industry, and he's done it. He says he wanted to provide affordable furniture for the broadest mix of American consumers, and he's done it. He's done it with good styling and sharp pricing. Before they got into retailing, they also worked out their logistics. They studied retailing, and hired some of the best experts in the country. I know a couple of them that helped them with everything from finding the right store location to determining exactly where they needed to fit the pricing. They spend more money a year on technology than the rest of the industry altogether, and they've been rewarded by that.

The only story in the furniture industry for the past 30 years is Ashley and how they've continued to grow and dominate. You look now with their new A La Carte program, their new Ashley and Sierra mattress programs and their new Ashley Express ecommerce program. Those are three billion programs each that they're developing right now. These will double the size of Ashley in a few years.

From day one, Ashley’s focus has been on the dealer making the highest gross margin return on inventory. The way to do that is to give them a product where they don't carry any inventory. They get you the product right away, and so you don't have your money tied up on inventory. High turnover plus decent margins gives you great returns.

They thought it out ahead of time and it's what everybody's supposed to be doing, but not many people actually do it.

INTERVIEWER:    You've had a front row seat for many of the industry’s major product trends in the past half century. What are some examples of hot products that eventually faded?

EPPERSON:         Probably the first one, for me, was waterbeds. Back in the late 1960s and 1970s, waterbeds were everywhere and young people thought they were really great. They didn't look into the fact that sometimes those beds were too heavy for the floors they put them on, and some of the beds leaked. Some of them also weren't so great for your back, but they had that reputation of being really sexy and fun. I think everybody kind of woke up one day and realized, "You know, that was fun when I was 18 to 25, but now that I'm 30, it's not for me anymore." Everybody kind of outgrew it. When it died, it died quickly. But still, some of our best retailers today started out as waterbed shops.

INTERVIEWER:                    Such as City Furniture.

EPPERSON:         Absolutely. HOM, up in Minneapolis, is another great retailer that started out as a waterbed shop.

INTERVIEWER:    What do you remember about the crate furniture trend?

EPPERSON:         Crate furniture started here in Richmond with This End Up. Its corporate headquarters at one time were located just a few blocks from here. This was cheap, affordable furniture with a very basic, utilitarian design that was built to last. Because it was so indestructible, it was perfect for families with young children.

Because of its value and durability, I wouldn't be surprised to see it come back. All the Millennials need something that's cheap and indestructible, and it was. The furniture wasn't sprayed — it was dipped. You could just take yellow construction-grade pine and put it together, sand it down some, dip it in a vat of dip and wipe it off.

INTERVIEWER:    What caused the company to fail?

EPPERSON:         I think what ended up killing it was over-saturation with the product. There were too many copy-cats making the same type of furniture. They also eventually underwent an LBO, which created its own problems. But it was a very creative company with a unique style.

INTERVIEWER:    How about the Scandinavian trend — what happened with that?

EPPERSON:         For a while, in the 1980s, Scandinavian was hot as a pistol. Then the currency went against them. What was fun at first was when the dollar was getting stronger and you could buy more and more of the furniture for the same amount of dollars. Every year, retailers were selling the furniture and the furniture was getting cheaper, so their margins were going up.

Then all of a sudden, the currency reversed and importers had to absorb a 20 percent price increase because of the shift. Nobody could do it. That's what's been true with a lot of the European product over the years, whether we're talking Italian leather, Scandinavian furniture, or the very creative ready-to-assemble furniture that used to come in here from Europe. For a period, we were seeing lots of very sophisticated RTA furniture here in the U.S., with fold-down tables and beds, plumbed sinks and other products, and all that stuff was just wonderful. But that product got priced out of the market because the currency eventually went against it.

Ikea and some other European retailers first came over here around 1976, but Ikea was the only one that decided to stick it out even though the currency went against it. They held off opening stores for a long time because the currency wasn't right. But once the currency was right and they could get some share, they ended up building a store network and even making some product here. But it was touch and go for a number of years.

If you talk to the guys that used to run those stores, Ikea was so successful in Canada but there was a great reluctance to expand in the U.S. If you had talked to them 36 months after opening their first store just outside of Philadelphia, which took place in 1985, they probably had more people in the company voting to shut it down than to expand. They had a tough time.

At first, they sold only European metric-sized beds, mattresses and sheets. People went in and said, "Wow, that's a fantastic price on that bed," but they went home and their mattress didn't fit. So they came back to buy a new mattress and it may not have been as big a value as the bed was. Then, if they bought a mattress, they would take it home and say, “Wait a minute. This mattress is a lot softer than I'm used to." Or, “Our old sheets don't fit on it."

The same thing happened with kitchen cabinets. When they opened their first U.S. store, they devoted about 25 percent of their space to kitchen cabinets. It was a huge business back then in Europe, where people would take their cabinets with them when they moved. They thought the U.S. was the same way. Well, people in the U.S. never took the kitchen cabinets with them when they moved. So that department got downsized, and they created more room for garage and utility room furniture and do-it-yourself kitchen stuff.

INTERVIEWER:    You've traveled to lots of the industry’s key sourcing destinations over the decades. Talk about how that started and also how the import scene has evolved.

EPPERSON:         My first trip to Asia was 1983. I went to Taiwan, Singapore and Thailand with Larry Moh, the founder of Universal Furniture, and his associates Laurence and Ronald Zung. That whole team took me over there and educated me. They showed me the rubber wood trees and how they were trimmed. I remember seeing the factories in Singapore. They had local Maylay workers, Indian workers and Chinese workers, and all three had different diets and different work styles. You had to have them dine separately and eat different food. It was a very complex equation.

Singapore never was as cheap as some other places, but they had it worked out. Larry Mo was one of the smartest, if not THE smartest, individual I've ever known in my life. He was a student of global finance and he could watch and tell which countries were opening up trade and which locations were a good fit for furniture production.

The truth is that furniture is a low-pay, dirty industry. Whether it was the movement from New England to Michigan, then to Virginia and Carolina and eventually Mississippi and then overseas, production activity has steadily migrated from one region to another in search of labor and material savings. At the time, the moves took place to gain access to nonunion labor; other times, producers moved to get closer to wood sources.

Let’s talk about Nat Ancell again for a minute. Ethan Allen went public in 1967, I think it was, for the first time. I came into the industry in 1971, and I'd heard about Nat Ancell. I went up to visit with him and he was very gracious. He always was nice to me. Merrill Lynch had put out a report talking about how Nat Ancell had a vision of the future, and that vision was that the major factories would have their own captive stores. That would be the most efficient way to get the product from the tree to the consumer.

I asked if Nat if he had a vision. I told him I wasn't much of a believer in visions, and he laughed. He said, "Let me tell you what my vision is. We're a Northern unionized manufacturer of maple furniture and the Southern guys are eating our lunch with pine and oak furniture. The species of wood they’re using is cheaper, the labor is cheaper, and the handwriting's on the wall.”

At the time, Ethan Allen had one very successful collection that was in the department stores — the Ethan Allen Collection. That was doing well, so Nat decided it was time to open their own stores.

Nat and his wife were very active in the United Jewish Appeal and they had many friends in that group. As they began to set up stores, many of the first licensees were social friends from that group, and from Nat’s wife and Ted Baumritter and his family.

Over the years, Ethan Allen set up factories and sourced product from factories all over the globe. First, they moved some production to the South. Today, they still produce some furniture domestically and those may even be unionized plants, I don’t know. But they’ve done what they needed to do to compete and stay alive.

Ethan Allen has never been the cheapest product out there. It's never been even a tremendously good value, unless you embrace the entirety of the concept, because they spend so much money on coordinating all the different styling elements. If you just buy a sofa, you can get a better deal at lots of other stores. But if you buy what they offer for an entire room — and get the lamps that go with the rugs that go with the tables and sofa — they’re a huge value. You can't hire somebody to go in and do that for you, and take the time to coordinate it beautifully as they do it.

INTERVIEWER:    Were they pioneers of the gallery and dedicated store concepts?

EPPERSON:         No question. What spun off from them? We've got Bassett and Thomasville stores, and Ashley basically is a knockoff of that. You know, you could create a long list of other companies that tried it, but, really, looking at it now in 2015, most single-branded stores except for Ashley haven't done very well. They really haven't.

Bassett also is an exception. There was a period when they contracted their store base to concentrate only on the most profitable stores, and now they’re knocking the cover off the ball. But it took them 15 years to get it right.

Ethan Allen now owns something like 70 percent of their stores. They're not buying those stores back because those licenses are so profitable. They bought those stores back  because they were troubled, and Ethan Allen had to fix them or else they wouldn't have any store presence in that market.

INTERVIEWER:    What impact is the Internet having on traditional retailers, and where do you see things heading?

EPPERSON:         I just saw an article in Advertising Age, and it said, "You think you've got a problem with the Internet and people not coming to your store, but what if you sold candy bars and gum? Are people going to go on the Internet and buy candy bars and gum? They're kind of things you pick up. You're not going to go and order them on the Internet.”

The bottom line is that there are certain products that the consumer is going to buy in a store, and furniture may be one of them.

When I look at the Internet today, I think it's a great opportunity. I've used it more this year than I ever thought I would, just because I don't like crowds and sometimes scooters and crowds don't get along real well.

One reason that I’m using it more these days for shopping is because I’ve become more familiar with it and comfortable doing it. Second, I’ve found that is an easy way to figure out exactly what I want. Sometimes I’ll still go to the store and look at the product and then buy it, but otherwise I’ll just move a product straight into an online cart and buy it on the spot. Either way, the Internet provides an opportunity for the consumer to be much more educated before they buy.

I think what's going to be the saving grace for our industry is that our product is such a pain, such a logistical nightmare, to get into the consumer’s home efficiently. There are people working on fixing that, such as the guys at Zenith Global. I think they're going to do fantastic things, but look at Wayfair. Everybody's talking about Wayfair doing so much furniture online, but their average sale is $300 or less.

INTERVIEWER:    Is the furniture that’s being sold online mostly smaller traffic items that are easy to drop-ship?

EPPERSON:         They're buying décor, and they're buying items. They're not buying full-sized sofas or a dining room set. They're mostly buying smaller accessories.

There's nothing wrong with that but it isn't mainstream big furniture. When it comes to furniture, I think consumers still want to shop for that in a store, so they can sit on it and feel it.

INTERVIEWER:    So the brick-and-mortar store is still likely to play a big role? But are there things they’ll need to do differently?

EPPERSON:         You've got to be able to show what you have and what you can deliver. That's what's so important because the consumer doesn't want to go to your store and find out you don't have it. One of the challenges we're going to have with brick-and-mortar is making the store exciting enough that the consumer will want to go back.

INTERVIEWER:    Is a store like Jordan’s way ahead of the game in terms of bringing entertainment to the shopping experience?

EPPERSON:         Absolutely. I'm on the advisory board of Art Van and I love them. What they're doing very creatively is blending a clearance center, which is very popular priced goods, with what they call, "The showroom," which is Art Van middle-market furniture. You've got the Pure Sleep technology driven mattress shop and then Scott Shuptrine, which is their high-end decorator line. All in one store. And they can cross-sell one to the other.

One person might be in there who wants to redo their primary home. In that case, they might be looking to furnish a very customized living room or a medium-priced breakfast nook. At the same time, they might have just bought a new condo in Florida and are in the market for something cheap that’s going to hold up when you come in from the beach with water and sand on your sandals. At Art Van, they’re capable of meeting both needs. It makes it tough to compete with that broad mix, because they do all of it so well. They're growing like a weed. I’ve been working with them since last May, and it’s been a real honor. I'm learning so much.

INTERVIEWER:    Do you think the industry will continue to consolidate, with these types of regional powerhouses growing stronger and stronger?

EPPERSON:         I think we’ll see Rooms To Go go national. I think Art Van will go national, too. It's not going to happen in five years but it's going to happen in the next 10 or 20 years. Art Van is already franchising and those efforts will expand. It’s a natural way to go, and it’s going to make the strong stronger.

If you're an independent store, there still will be a role for you, but what you have to learn to do is exactly what the big boys aren't doing. Here in Richmond, one rainy night, I sat outside a Value City store with several couples waiting for the weather to calm down. I talked to them, and all three couples that were standing there had bought furniture. They'd all gone to Haynes, which is our dominant local mainstream store, and also gone to Havertys, Value City and Ashley. All three couples agreed on one thing: All of these stores had the same type of stuff.

There were certain bedroom collections, dining room looks and sofas that were common at all of stores they visited. The pieces that were truly different or distinctive were few. What does that tell you? If you're big and you serve a very large region, then you kind of have to commoditize your mix.

INTERVIEWER:    And that leaves an opportunity for smaller stores to do something          unique?

EPPERSON:         One time in the 1970s, I used to get together during market with Al Levy, who ran one of the big buying groups. We were sitting around talking one night and somebody said, “Who had that ugly orange sofa?" Somebody else said, "Schnadig." He said, "That's right, Schnadig. God, that was horrendous. But you know, while we were in there, they had two show-wood frames that were fantastic."

I knew some of the people at Schnadig so I went back. I just wanted to see this orange sofa. Once I entered the showroom, the sofa wasn't hard to find because it stuck out like a sore thumb. As I was looking at it, I asked one of the reps, “Do you sell many of these?" They replied, “It's not here to sell. All this upholstery after a while looks alike, since all of us shop from the same fabric vendors, so we wanted to do something different to catch buyers’ eyes.”

That piece was there for one reason: It was memorable. As a result, people shopping that showroom during market remembered that piece and talked about it. “Oh, it was that showroom? OK, they had some other things I really liked last market.”

On the wood furniture side, we are just now beginning to see some new wood furniture styles. We went through that a period of time for 15 years or so where 30 percent of the industry’s volume, year in and year out, was Louis Philippe or a variation on Louis Philippe. Once, around 2010, I went into the Lifestyle showroom and they had five different Louis Philippe bedrooms at different price points.

Now Louis Philippe is a nice-looking style. It was introduced in 1986 when Sherwood Robertson brought it out for National Mt. Airy. I'm telling you, though, it eventually became too mainstream. During this recent downturn we went through, no retailer was willing to take a risk. That meant that no manufacturer or importer was willing to take any risks either, so they were bringing in this mediocre mix of things that would sell sometime to somebody, but nobody bought it with any enthusiasm.

INTERVIEWER:                    Isn’t that kind of a self-fulfilling prophecy?

EPPERSON:         Lexington and a few others like Magnussen were a bit more creative. But by and large, we got in this funk. It hit some people really hard.

In the early 1990s, Broyhill hit it out of the park with Fontana, a transitional design in Southwestern styling. It was so attractive that it sold well coast to coast to everyone. Those are the kind of things that most companies only have once in a career, like Pulaski’s Keepsakes.

Then right after that, Broyhill came up with Attic Heirlooms. Wow! That collection was just as big, just as important. And soon it was knocked off by about every other Tom, Dick, and Harry out there. In my opinion, Broyhill hasn’t hit a similar home run since then. They were struggling, because once you've had those couple of big hits in your career, you don't want to settle for singles and doubles anymore, you want to swing for the fences every time.

INTERVIEWER:    What would be a few other examples of collections that have had a big impact?

EPPERSON:         We were in such a gaudy period for so long when Henredon came out with Scene One. It was a very clean Campaign-style look designed by Ken Volz. During market, I walked through the showroom with Ken. At the time, a big production run for Henredon was about 300 suites at a time.  But Scene One was running 3,000 at a time. I asked Ken how they did it. He said, “Well, one of our secrets is we only have two dressers. We've got the leg dresser and then we've got the box that sits on a platform." He added, "Now, we'll change the hardware, and we'll certainly change the veneer and the trim. But the boxes are the same. From a production point of view, we're just flowing boxes down the line." How many of these factories today are making collections where every dresser is a different size, and every drawer they make also is a different size?

INTERVIEWER:    It sounds like they created custom looks but still maintained a mass-market efficiency?

EPPERSON:         Ken said, "I've never had anybody put two of our dressers side by side and say, ‘You're taking advantage of us by doing that.’ " Why don't more people do that? Nowadays, I look at the stuff that's being imported and I'm seeing more and more shortcuts. You're seeing more shallow decks on the upholstery, for example. Also, always watch out when you go in a showroom and you see a dresser or a chest with a fake tree next to it, because that means they pulled it out from the wall so you won’t realize how shallow the chest is. We're seeing more and more of that trickery. Products are being built to see how many they can get to the container as opposed to what the consumer wants.

I was talking to Tom Finch at Thomasville back in the mid-1970s. Tom told me that one of the things Thomasville was looking at then was that they were convinced that televisions were going to change format. We weren't going to have just these tables that you set a TV on top of, or a cabinet with a TV built in. TV's were going to migrate to other rooms in the house and we were going to have different formats. He said, "We're trying to think of something to accommodate that.” And I said, "Well, that shouldn’t be that big a problem." And he replied, "What you got to realize is that almost every piece of furniture is based upon something in history, and Thomas Jefferson and George Washington didn't have TVs on their 18th-century furniture.”

Of course, this conversation took place before there were personal computers. I said, "What about bookcases?” he said, "Well, first of all, bookcases can’t support the weight. Plus, if you make them too deep, they look odd." So I told him, "At UVA, they've got several beautiful libraries. They're bookcases, yes, but they've got crown moldings, lots of carvings. They've got moldings going up and down the front, they've got some glass doors, they've got some with drawers. They’ve got some with doors, some that come out further than others. He said, "You know, they've got those at Carolina, too."

A year later I went in during market, and this particular cherry wall unit — the same one I have here in my office — was in his showroom. Tom said, "Remember that conversation we had? This is the result.”

When this went off their floor and they put it in production, he said, "Do you want our samples?" I said, "Sure." So if you look here and over there in my office, that collection is all over this place.

INTERVIEWER:    Any other examples of how the industry is challenged to think things through in new ways?

EPPERSON:         We tend to make the same thing over and over. For example, we still make bedroom furniture for people who iron their clothes and fold them. But most of our clothes today don't need to be ironed and folded. We really need to start making more bins, not drawers.

I grew up in a house where my mother made my sister iron her underwear, fold it and put it in the drawers just so. I was in talking to John Bassett in his showroom not long ago, and I was making this same point about how we need to start thinking about the way the apparel and dressing habits have changed. I asked him if he didn’t agree it might be time for change. And he responded, “Well, I've still got someone who still irons my underwear." How can anyone not love John Bassett?

INTERVIEWER:    What has been the impact of licensed collections?

EPPERSON:         Well, we had Williamsburg, which did great, and we had Ralph Lauren, which also did fantastically well. But when Lexington came out with The World of Bob Timberlake in the early 1990s, that really changed things. What really made Timberlake different, other than that Bob is such a warm, outgoing, lovable person, was the fact that when it was introduced it was fully coordinated. Not just with the rugs and the wall décor but also with the gifty type items like the pieces inspired by his personal collection.

Bob collected miniature furniture. He collected rust-covered nail things, and he collected canoes and Revolutionary War drums. All that stuff was integrated into the furniture collection. They put gift stuff in so that when it was first offered you had department stores selling Timberlake décor and the gifty items, and you had furniture stores selling the furniture, flooring and accessories.

It was a true phenomenon. It went everywhere, with the broadest of the broad distribution. Back then, the joke was that Lexington would not sell somebody unless they were warm blooded and paid their bills. It got the broadest possible distribution across the world and it just took over the industry. Everybody was just saying, "Why couldn't I do it?” It wasn't just that the product was phenomenal and it was — it was well done and had good detail. But it also had a story behind it. It had the personality of this famous artist, who had done some books and was truly beloved. The Lexington folks came to market and they brought that story to life for everyone to see.

INTERVIEWER:    Any recent successes in this area that you would single out?

EPPERSON:         Trisha Yearwood’s collection has done well for Klaussner, and so has Bill Mangum’s collection, also for Klaussner. Some of the collections linked to high-profile designers on these makeover TV shows also have done well. Last market, for example, Standard’s Magnolia Home collection was a big smash. That was a beautiful collection — very well thought out and well priced. I've actually watched the TV show a couple of times, and Chip and Joanna Gaines seem like wonderful people. I'm sure that's going to be a success.

At the October 2015 High Point Market, I also went into the Hooker showroom and walked through the Cynthia Rowley area. It features a lot of traditional looks almost reversed. They were still traditional but they weren't traditional in the way you think of traditional. I love that collection. It was very tastefully done, very creative, colorful and eye catching. It comes from a company like Hooker, which has become today’s Henredon.

INTERVIEWER:    Did you develop your enthusiasm for furniture style over time?

EPPERSON:         Are you saying, because I’m a financial guy, what do I know about style? Unfortunately, over the years, a lot of the things I really loved never even made production. And I’ve learned that maybe my taste isn't what others like.

But, all kidding aside, what I’ve really loved is studying the factors and influences that drive various styles to rise and fall.

In the early 1970s, the industry was busy making all that gaudy plastic- fronted Mediterranean furniture, when all of a sudden we had the oil shortage of 1974-75. Holy cow! Overnight, we moved to all-wood looks. Was that because of the upcoming Bicentennial celebration? No, it was because that plastic got too expensive so we needed to switch to wood. These are the kind of things that always have amazed me.

I won't mention the lumberman's name but there's a family lumber company that I've known for a while. Once, I got on an airplane in Philadelphia and sat down next to him. He was mad as a wet hen. His face was red, and he looked like he was about to jump somebody. I said, "What's the problem? What's going on?" He said, "Well, somebody I trusted told me about a collection of maple up here. They said that some mill was going under and that I could bid on the wood and get it dirt cheap. Of course, being stupid, I bid on it and I won. Yesterday, I came up here and looked at what I bought. Except for a few front pieces, it's all wormy. I don't know what I'm going to do with it."

I don't know what he spent on it but it was hundreds of thousands of dollars, I'm sure. Fast forward six months. I'm in the Pulaski showroom and they introduced a new collection called Apothecary. It's got this wood on it that looks like pecan because it's got these dark spots. I’m looking at that collection with the designer, Leonard Eisen, and I'm saying, "Leonard, what is that?" He said, "Epperson, we had to go all over the country to find this. We finally found a little bit of it. It’s wormy maple veneers — we're so fortunate to find it!" I said, "I got you," and that little light bulb went on. Nobody's going to come out and make a collection out of elm if there's a shortage of elm. The way the industry is driven is availability.

INTERVIEWER:    What was it that Universal did with rubber wood that made it so unique?

EPPERSON:         It was Larry Zung who was sent by Larry Moh to go live in Singapore and look at all the native species to find a practical wood. It was Larry Zung who discovered that they were growing these rubber wood trees and cutting them down after they were 23 or 24 years old. The trees were only about this big around when they were cut down because once they got to be that age the sap wouldn't come out anymore. Of course, you raised the rubber wood trees to get the sap.

Well, the trees were too small to make furniture out of, but what Larry found was that if you cut them to find just the best wood, the scraps could be tossed. Each tree yielded a small amount of lumber, and the cost was free, so that was better than paying a lot of money somewhere else. So they started making all this rubber wood furniture out of this byproduct. They had to process it, but they were getting their raw material basically for free with cheap labor.

INTERVIEWER:    All that wood had simply been destroyed in the past?

EPPERSON:         All the rubber wood had been burned prior to that because it was seen as having no economic value. Then Larry came up with this idea, "You know, we're throwing away a lot of lumber, so why don't we make parquet flooring?" Then they start taking the scraps out of clear cutting lumber and making parquet flooring. Well again, that's a byproduct of a byproduct. It's less than free. It's just lying there, let’s use it. The profit margins were huge, since they weren’t paying anything for the original material. From flooring, they expanded into furniture.

INTERVIEWER:    Did it surprise you how rapidly furniture imports accelerated in the 1990s, and how the business soon spread from wood to upholstery?

EPPERSON:         I was shocked. I really was, because it struck me that there were going to be barriers that they couldn't exceed. One was price, because there's a level that you hit where there's customization, and they really couldn’t do customization. Could they? Sure they could, but it doesn't run the factory efficiently. I thought that would keep them from going above this level. It didn't.

In upholstery, what happened was the currency weakened, which made the Italian leather more expensive over here. Asia was already making the pocket books, the shoes, the belts and all that stuff, so they said, "Why don't we make the furniture?" Since the Italian leather was taking between 20 and 30 percent price increases every year because of currency, these other companies jumped on leather as a starting point. Once they started making leather and shipping them over here, they recognized the size of the market. In 2002, they installed more new fabric looms than the U.S. had all together. Bam, they're in the fabric business.

Now they dominate fabric. You know, whether they bring the finished fabric over here, or send it over as cut-and-sew kits, or make it into upholstery over there, they've taken over a lot of the fabric business. It's shocked me how fast it's happened. It's been very scary because it's impacted retail so severely. We were an industry before where a store could pick up the phone and order product and they'd have it here in a week or two from two states over. Now, all of a sudden, you have to plan your orders 120 days ahead of time for a container load and have it cross the ocean. It’s a whole different model. Small independent stores don't have all the resources and access to do that.

INTERVIEWER:    Is that another key factor in why the big keep getting bigger?

EPPERSON:         Well, is certainly was for Walmart. Walmart grew to the point where it has its own ships, its own buying system, its own distribution systems.

Take Ashley. The strength of Ashley isn't their furniture, and it isn’t their design. The strength of Ashley is their logistics, their ability to source efficiently. The quality's consistent, the design is consistent, and they get it here on time. You talk about a panic this last summer. Ashley got oversold and the stores couldn't get product for two or three months. Well, if your name's on the door and Ashley can't deliver, you're having a bad month.

INTERVIEWER:    Was that compounded by the 2015 dock situation, where things ground to a halt on the West Coast during contract negotiations?

EPPERSON:         I simply don't think anybody anticipated how strong this year would be. I'm sure the dock situation didn't help, but it wasn’t a factor in Ashley’s case. They use a Canadian port, Prince Rupert.

INTERVIEWER:    You talked about traveling to Taiwan and Singapore in the early 1980s. Over the years, have you visited most of the world’s key sources for furniture?

EPPERSON:         Yes. For example, we were there when China opened. I’ve been very   blessed. Everybody’s nice to me.

INTERVIEWER:    Does your firm do business with leading international players as well as U.S. companies?

EPPERSON:                         Sure, we do.

INTERVIEWER:    Anybody that you can mention that you've worked with in the past?

EPPERSON:         Samson is one example. Over the years, there’s been a bunch of them. My partner Howard is a specialist in the healthcare sector, so he still does healthcare deals. He’s working on several right now. He also did a fiber optics deal with a company in China. Fiber optics? I’m not even sure I know what fiber optics are, but he did it and did it successfully.

Jim sold a company to a plastics company. He sold a pharmaceutical company. You know, furniture's just the big half of what we do but we still do all kinds of things where they have an expertise that's beyond what I do, which kind of makes me feel better because I'd hate to think they were all dependent upon me.

INTERVIEWER:    Do you have any plans for successorship for your firm at this point?

EPPERSON:         It's our weak point. Howard's 68, I'm 67, Jim's 66. We had our big meeting here not long ago and we all agreed we're going to work a minimum of three years more going forward. I'm going to work forever. I really love what I do. I love the people I work with. I've got the best staff I've ever had. I honestly think there's a need for whatever the hell it is that I do. On an average day, I get calls from the Wall Street Journal, or Forbes, or this group or that group, or somebody somewhere who is writing a speech.

I love it when the president of a company calls and says, “Epperson, I have to give a speech on Monday and I haven't had a chance to write it. It's got to be upbeat, it's got to be positive, and it's for this group. Can you do it?" I LOVE those. I'm being a bit facetious, but we do those kinds of things all the time. We can whip things together pretty quick, and my assistant, Jin, and my office manager, Margaret, are wizards at making things look professional.

Today, there are so many positive things going on in the industry that these speeches are easy to do. Before that, I spent five years working where my primary job was holding people’s hands and telling them there was still going to be a future, because everybody got hit so hard. No one ever anticipated we'd go through what we went through.

INTERVIEWER:    That period was a “perfect storm” of trouble for domestic manufacturers since we had both the recession as well as fierce new competition from imports.

EPPERSON:         Absolutely. But the imports got hurt just as bad as the domestic guys did. Everyone was fighting for business. People were having to dump product at very low prices to survive. There was a lot of product out there that could be picked up for 20 cents on the dollar.

That led to the creation of these weekend-only stores and things like that where there's no set merchandise mix. They sell whatever they happen to pick up and offer deals on that.

A good example is The Dump, which is run by my friends the Strelitzes down in Virginia Beach. The Dump's been tremendously successful for them, and they're only open Friday, Saturday, and Sunday. You never know when you go in this Friday what's in that store, but there will be a lot of stuff in there this Friday that’s different than what they had last Sunday.

INTERVIEWER:    That builds on what you were saying before about retailers needing to do something different to defend the brick-and-mortar experience.

EPPERSON:         Are you familiar with Tuesday Morning? They send out a little catalog with stuff. The only thing that seems to be consistent, for some reason, is luggage, but anyway, it's a lot of different stuff. Like so many of my catalogs that I get, there's nothing in there that you really need.

INTERVIEWER:                    But it changes all the time, right?

EPPERSON:         That catalog comes out and the whole idea is, "We're going to open up Tuesday morning at 10 o'clock, and you better be here early or this is going to sell out."

That's the whole idea. You don't know what's going to be in there that you didn't see last week. Can you imagine if we had a concept in furniture where the consumers would come back every week just to see what's new or different?

INTERVIEWER:    It’s too bad consumers don’t have a way to see the amazing range of products that the industry sees during market.

EPPERSON:         For years, I have brought family and friends to market and they’re always blown away by what they see. One of my friends was a good lawyer here in town. He’s gone now, but he went to market with me several times. Willie Lanier and his wife went with me one time, and my physician's gone with me.

I love having somebody walk around with me at market for a day or two who's never been there before. I feel like I've seen everything, but they come through and say, “Epperson, look at that! I didn't know they made such things. I've never seen anything like that before. It's beautiful!"  When you see things through their eyes, you realize just how much creativity there is in this industry.

On the other hand, one of the last markets when I was with Pat Norton in the La-Z-Boy showroom, I asked, “OK, Pat, what’s new?" We walked into the showroom and he says, "Look at this. It's a low-back ladies recliner," you know, smaller scale. He sat in it and leaned back, and it had a pop-up headrest right here that came up. He said, "Isn't this neat?" I said, "Yeah, but I hope it works better than it did for Stratolounger and Barcalounger back in the early 1970s. They tried it then and it didn't sell." He said, "You realize you're here as a guest and you can be asked to leave at any time?"

INTERVIEWER:                    Too much historical perspective!

EPPERSON:         Yeah, his point was, “This is our product and we just introduced it now. Let's leave it that way."

INTERVIEWER:    When you first started coming to High Point for market, did you do the full circuit of visiting showrooms and factories in the Hickory area as well?

EPPERSON:         Oh yeah. We’d go down to Lexington and visit a couple places down there. I’d call on Henry Link, Link Taylor, Dixie and Lexington. When you walked into the corporate headquarters, they had a plaque above the door that said, "Through these doors pass the smartest furniture buyers in the world." And when you went in the building, you left your car open because they had people out there who would vacuum out the interior while you were working.

Smith Young would come down, shake my hand and say, "I can't let you in, we're too busy." He never let me in his showroom. He'd sit down and talk with me for an hour, but he wouldn't let me in his showroom.

INTERVIEWER:    He was worried about what you’d tell his competition?

EPPERSON:         He just basically didn't want anybody coming in there who wasn't buying furniture.

Of course, I’ve also been asked to leave showrooms before. I fell asleep in the Stratolounger showroom one night. I was just tired. I sat down, and it was a very comfortable chair. I didn't realize it but the next morning I woke up and somebody was shaking me. It was 6:30 in the morning and I'd slept all night in their showroom.

INTERVIEWER:    What’s your outlook on the future of furniture markets?

EPPERSON:         I think the markets today are the best they've ever been, I really do. They're more organized. Unlike in the past, the monies that are being spent in marketing are being spent to the betterment of the industry as opposed to fighting back and forth.

Just look at the improvements to High Point, in the transportation systems, the way it's helping retailers, the way it’s being promoted. It’s so much better than it's ever been before. And it’s going to continue to get better as High Point and Las Vegas both strengthen their identities and product niches.

For a long time, you had the least expensive and the most expensive products shown side by side. I think you're going to see the showrooms in High Point and Las Vegas moved around so that more showrooms relate to each other and you're not going from pillar to post to look for similar products. I think that's going to help.

INTERVIEWER:    Is the bedding floor in Las Vegas an example of that?

EPPERSON:         Yes, exactly. Those things could be very helpful. I also think we've got smarter management now than we did. I think the dates are being set up in such a way that they're listening to people. I'm a big Bob Maricich fan and Scott Eckman also is a great guy, very sound. They do their research, they know what's going on, and they've got good investors behind them. I just really get enthused about markets because I love the markets. If I could go down there and spend two weeks, I would.

Some people don't understand markets — all they think about is product. That's not it at all. You've got to go down there and use that experience to learn what other people are doing and what works for other people, to learn what's the latest in merchandising and how to do things. I don't want to know just what's new, I want to know what's selling and how are they “selling it.” That's important.

If there's a failure I see at retail it’s that they're not paying attention to the basics. You don't put your most expensive merchandise next to your least expensive. It makes the least expensive look cheap, and it makes the most expensive look overpriced. You step your merchandise up — that's the way it's done. For a few dollars more, you get these features, and for a few dollars more you get these features.

One of the great things about the mattress industry for the last two decades is we've taught the American retailer they can sell $3,000, $5,000 and even $8,000 mattresses if you clearly explain to the consumer the benefits that come with each price level.

Motion and recliners are another product where benefits are visible. We used to have the basic chair and you could step it up to leather. Now you've got the basic chair, and you can step it up to leather, but you can also step it up to power where the back and the foot are hooked, or for a few dollars more where the back and the footrest operate independently.

Then, by the way, for a few dollars more we can put in sophisticated massage. We can put in articulated headrest, we can put in a light, we can step you up and make a basic $499 chair a $1,200 sale. We couldn't do that five years ago.

Look at the closing process. That’s the most amazing thing. In the past, we had credit. Now, we have secondary and tertiary credit sources along with rent-to-rent and rent-to-buy. Instead of closing 55 percent of our sales, we're seeing stores closing over 80 percent of their sales. There's no reason for anybody to go out of the store because they can't find a way to pay for it anymore. It's there, it's available.

If you look at Furniture/Today’s most recent issue, I think they had seven different secondary or tertiary financing options. The stores ought to be on their knees praising whoever for giving us this option.

INTERVIEWER:    The opposite happened during the recession, when all the available credit dried up overnight.

EPPERSON:         Nobody could finance anything. It all went to rent-to-own.

INTERVIEWER:    Has the going-out-business trend cooled down now that the recession is over?

EPPERSON:         We're not seeing GOBs like we were seeing then. There are a few here and there, and there are always going to be. In the decade of the 2000s, we lost 35 of the top 100 furniture stores. And how many did we lose in the 90s? Another 35. Part of it is real estate, and part of it is generational, with company founders retiring. It seems like about a third of our business turns over every 10 years.  Again, I think it's a very dynamic period, today, however with a lot of new ideas.

INTERVIEWER:    I seems like you’re as excited now about the business as you’ve ever been?

EPPERSON:         It's so much better than it's been in 10 years. And the opportunities are the greatest they’ve been since the early 1970s. We still have not created the concept that's right for the Millennials yet. Somebody's going to come along that's going to hit a nerve with the Millennials and that's just going to break open. When that happens, it’s going to go coast to coast.

It could be a This End Up-type product that's durable and cheap, something you use when your kids are young and then you get rid of. It might be something like that. That's what worked for our generation. I remember one of my friends got some and I asked why and she said, "The chairs are so heavy that when I put my kid in one and push him up to the table, he can't get out."

Remember all those names? Cargo, Crate American, Barn Door? There were a bunch of them around making crate-style furniture, and some of it was very creative. Here in town we had one called Pine Factory that did a good job.

INTERVIEWER:    You've met so many people at all levels of the industry. Are there are few individuals you would single out as mentors?

EPPERSON:         Larry Moh is one, he taught me about the global nature of the business. Pat Norton taught me a lot about the relationships between retailers and manufacturers and how they have to be handled. Art Van has taught me so much about retailing, enthusiasm and creativity. You know, there’s a long list. Bunny Wampler was kind enough with me and he showed me how creative things could work and how design could be fun.

My career has been a blessing of riches. But there also have been challenges. I remember one night when I was an emcee for one of the association dinners in High Point. I was standing at the podium and I leaned to my left and my leg brace broke. I was holding onto the podium for dear life for the rest of the talk. I rushed through and got it finished and somebody came up and said, "Epperson, that was the worst program you've ever done." I said, "Look, if I let go of this podium I'm falling down. Go get me my crutches." Now that's a memory.

I remember getting the American Furniture Manufacturers Association’s Distinguished Service Award. I had no idea I was even eligible. I'm at Disney World for their meeting, which I used to attend every year. They start reading this thing and they talk about someone having overcome obstacles and stuff like that. Usually I have my list of people who I think is going to win, and I'm trying to think of who fits that. Then they say my name, and I had no idea.

Being inducted to the Hall of Fame was another huge honor. Bill Child and Bill Fenn were the first two individuals to get their awards that night, and now it’s time for the third award to be presented. Morty Seaman had been nominated. I turned to my wife and I said, "Morty's got it locked. I'm not going to make it this year." Then they called my name. I didn't deserve it. I mean, I'm not being modest. I'm saying what Morty has accomplished in this industry is so visible, it's so real, and I'm just an observer. I've never had an original thought in my life, I just listen to other people.

So I get up and explain how in my life I've got three families. I've got my family that I go home to, you know, wife and kids, that family. Then I've got my company family here. Then I've got my furniture family, these people that I've lived with for the last 40-plus years. This is really it: I don't come to market and other industry gatherings on business. I come because it's like a reunion. I'm seeing so many people that I want to see.

There are people out there like Larry Fruget. I cannot see Larry without breaking into a grin and laughing, because he's just one of the most entertaining, fun, nice, wonderful people. He's with Leggett, and every time we see each other we just light up. When I had my broken hip, he called me one day, and I had to beg him to stop because I was hurting so bad laughing. He's just one of those great guys in life, and there are so many of them.

Once I had a video camera, and I decided when I was at Wheat I was going to videotape some of the new product at market. We had a way to talk to all of our branches and do a video, and I was going to show them some of the new product and illustrate what was new and different and all that. Well, one day I came back to the room and the camera wasn't there, so I told the front office. This was back when the old Holiday Inn was there in downtown in High Point.

I said, "Look, would you report it to the police for me?” Well, I didn't give it another thought. I went about my day and did what I had to do, and I came back to the room that night and I got undressed. I took my brace off and I got in bed. I'm in bed and I hear a knock on the door. "Mr. Epperson? This is the police." "OK," I said, and I turn on a light. Well, this brace has got six sets of leather straps. It takes a while to slide your foot in get it pulled up. The knocking continued. "Mr. Epperson, this is the High Point police." And I'm yelling, "I'll be there in just a second!" I'm putting the brace on as fast as I can. Then I hear, “Bam, bam, bam. Mr. Epperson, come to the door, High Point police."

Anyway, I finally get to the door. I'm in my underwear and I open the door, and I said, "Look, I had to put this metal brace on. I'm sorry it took so long." Two guys came in and they said, "Oh, OK.” But they were very suspicious. They went and looked to see if I'd flushed away drugs or whatever. For the rest of that market, I'd be walking somewhere in a showroom and people would come up to me and say, "Epperson, is everything all right? I heard about you and the High Point police." I tried to explain to them what had happened, but everybody up and down that hall already knew the story.

INTERVIEWER:    You had another story in your memoir about being with Pulaski in a New York sky rise when you got stuck in a stairwell?

EPPERSON:         Bunny Wampler and his wife Joanne were one floor below me, and I think I was on the 14th floor. The elevators were way down the hall but the steps were nearby so I come out of my room and figure, "Well, I can go down one flight of steps." I go down one flight of steps and find that the door back in is locked. So I go down another flight of steps, and that door's locked. So I went all the way down to the first floor and find that those doors are locked, too. Finally, I went down to the basement level and I got out. Then I had to tramp upstairs and take the elevator up to the 13th, and I'm a whipped puppy at that point. I'm just tired as I can get and I have to explain to them, then I fell.

Those kinds of things happened to me every day. Because my left foot is basically locked in place, I would get in a position where I was going to fall and there was nothing I could do about it. I used to fall regularly everywhere I went.

One time, my father was going to pick up our Aunt Pearl. There was a hurricane coming and the wind was really strong. I walked out our front door and my left leg went, "Zoom," behind me, and I yelled for dad and he caught me. My left leg's completely paralyzed. I couldn't bring it forward to put my weight on it. I was balancing on my right leg leaning into the wind, and I couldn't get my left leg back underneath me.

There are no muscles there, and so you kind of learn to make do. Going up stairs is easy, but coming down stairs is tough. People don't seem to understand that when you go upstairs you plant your foot. You’ve got a railing and you can pull yourself up. Going down stairs, you plant your left foot and then you have to use your right knee to lower yourself, which is painful. People don’t understand, but I can go up a lot more stairs than I can come down.

INTERVIEWER:    It sounds like your family was very supportive and encouraged you to be as active as possible growing up. At one point, did your father even build a golf course in your back yard so you could give that a try?

EPPERSON:         We took clay flower pots and sunk them in the ground. We had a great little golf course and my across-the-street neighbor and I still laugh about that.

Dad just made me realize that I could not rely on working with my hands or my back like he did. It just wasn't an option. But for a long time, I had no plan. Until I met Kathy and realized I wanted her to be happy, I had no idea what I would have ended up doing.

INTERVIEWER:    How do you feel about where your career ended up, and the many contributions you’ve made?

EPPERSON:         I'll answer that several different ways. One, I had no idea I'd be involved in my own company. I always figured I'd be with a big investment bank or something all my life. Working for yourself is wonderful, and you will never earn what you are worth working for somebody else. Trust me on that one, I've learned that. At Wheat, as good as they were to me, they paid me only what they thought it would take to keep me there.

You talk about an angel on your shoulder. My wife and I when we got out of graduate school and I was at Scott and Stringfellow, we had a car payment, we had furniture payments, we had our apartment rent and several other things. We were struggling and we were trying to save money for a house. We weren't putting a nickel away. My sister calls me one night and she says, "Get up and go look at these three houses." She gave me the addresses of three little brick ranch houses.

It turns out a friend of her husband owned three rental properties, and for reasons too long to go into, he got caught fooling around and his wife wanted to sell them all. We went and looked at all three. We picked out one of them and we ended up getting that house for just picking up the mortgage. That's all. All of a sudden, we owned a home with a $14,000 mortgage on it. Our house payment was $95 dollars.

We got a Sears credit card and we got paint and stuff. I finished the floors on my knees, and one of my friends did roof work, and we have a friend who was an electrician come over and do a little work. We were in that house for 18 months and we sold it for $24,500, which was enough to buy a bigger home.

So we bought a home near the area where we are now, in Salisbury, but what we chose was a Swiss chalet. It had the living room, master bedroom and kitchen upstairs, and downstairs were the guest bedrooms and a little sitting area. The house was upside down. I didn't give it a moment’s thought. My father looked at it and he said, "This is ridiculous. You're going to hurt yourself going up and down those steps." Sure enough, he was right, and within 10 years it was a problem.

We didn't know what to do, but Mr. Wheat, who I'd been with then for nine years, called me in his office one day and said, "Epperson, I hear you're having trouble walking." I said, "Jim, you know, it's just polio. I'm getting older." He says, "And your house, you got to go upstairs?" "Yes, sir," he said, "That's ridiculous." He called in our head of real estate, a guy named Jerry Eanes, and Jerry and his wife went house hunting on our behalf.

They found three homes, and one of them was in the Salisbury area, which was in the best school district, on a golf course. The house was more than double the value of my existing home even if I got my asking price. Jim said, "Just tell me which one you want." Next thing I know I'm signing a contract. One of Jim's friends who runs a local Savings and Loan did the mortgage.

Kathy says, "How are we going to afford this?" We move into the house. My first paycheck comes and the difference between this paycheck and the paycheck before is the difference between $363, which was my old house payment, and $1,190, my new house payment. That difference had been added to my paycheck after taxes.

That was Jim Wheat. Now, how can you not love a guy like that? That's why I stayed there as long as he was there, but when he retired we went off.

That’s the angel on the shoulder. If my sister hadn't been watching out for me, I wouldn't have got in my first house. If Jim hadn't thought I was worth investing in I wouldn't have gotten this house.

Here’s another example. One night, I was driving home after the High Point Market, and I was tired. I'm in my Suburban. I like Suburbans. I can't drive them anymore but I was driving them then. I’m on cruise control going over 60 miles an hours and suddenly I start to nod off and drive into the ditch between the two lanes on route 360. It happened right where the road was perfectly straight, just a few pieces of brush and things. I woke up right away, and I'm able to stop the car and pull back up on the road.

That scared the dickens out of me. If that had happened a mile later, I would have been in a big grove of trees, if it happened a mile earlier, I would have run into a bridge above me. Somebody somewhere was watching out for me.

Look at me. I look like I'm going to have a heart attack any minute now, but my blood pressure is perfect, and so is my blood work. Other than just being fat, my doctor says everything's as good as it gets.

INTERVIEWER:    What’s your view on the next generation of furniture leaders coming up in the business? Are you encouraged by the talent that's waiting in the wings?

EPPERSON:         This past market, I saw Neil Goldberg from Raymour & Flanigan. One day, he had one son with him and then the other day he had Adam with him. I looked at those brothers and I told Neil, "I hope you know how lucky you are, how very blessed you are to have the young people that want to come into the business and appreciate what you created." Neil, his brother and his cousin took a huge risk buying that company from their parents. They were deep in debt, and they took a huge risk, and now they've got such a wonderful reward. It's one of the best stories in the furniture business and now he's got his kids working there. It’s just great!

Art Van is a similar story. And so is Ashley. Ron has Todd, and now Todd's kids also are involved. It's a wonderful story.

INTERVIEWER:    Do you find yourself serving as mentor yourself for some of the younger executives coming up?

EPPERSON:         They don't need me. I'm old school — they don't need me. I need them. When I get a new toy, I got to have somebody come in here and help me. Margaret and Jin come in here and help me on my computer at least once a day when I've done something stupid and help me figure out what I’ve done wrong. I was on the phone as recently as last week calling Amazon, and when I got somebody on the phone I said, "Look, I'm 67 years old and I've just screwed up. I think I ordered two of something I meant to order one of."

INTERVIEWER:    You’ve been involved with numerous industry associations during your career. How do you see their role in the industry?

EPPERSON:         I get very upset at people who take advantage of our associations. If it weren't for what the AHFA does, in terms of watching out for the regulations and other developments in Washington, we'd be absolutely up a creek. NHFA, or NAHFA as it's now known, is also out there watching those credit regulations and other regs that impact the retail side of the business. What would our retailers do without them? We still don't get enough industry members to join up to really support these groups. They just ride along hoping somebody else is going to take care of it.

I will speak anywhere for a non-profit if they reimburse my travel expenses. I'm happy to do it because those people need all the support. A lot of the work we do now — our economic forecast, our import studies, some of that other stuff we do — the only reason we're doing it is the associations used to do it but because of the downsizing of the domestic side of the business, and other reasons, they couldn't afford to do it anymore. We've stepped in and taken on that role for some of the associations. We're blessed with some great ones. ISPA, for the bedding industry, is a fantastic association.

INTERVIEWER:    You've been involved in WithIt too, haven't you?

EPPERSON:         I had been on WithIt’s board for a while. But I resigned this past June from WithIt and from the Hall of Fame. I hated to do that but I got invited to join Art Van's board. At some point in time, you just run out of time to do things.

I have learned so much from Ken Yost, Art Van and the rest of Art Van’s management, looking at retailing from the inside — whew! I had no idea how much planning and detail goes into it, from the different incentive programs and other things you need to keep your people inspired to all the changes in technology and social media. Wow!

INTERVIEWER:    That's interesting. It sounds like this involvement has taken you to a new level in your understanding of the business?

EPPERSON:         We've taken many companies public over the years and put together these documents that go into great detail on the companies, in terms of who they are, what they've accomplished, and what their asset base is. But Art Van has a more sophisticated setup than anybody I've ever worked with before, and they're a private company. I'm sure Ashley is just the same and they're a private company. It's mind-boggling.

Plus, things have changed. Being a public company, I used to think that was something that was worth aspiring to and everybody ought to be public. Now, I can't think of anybody I hate enough to encourage them to go public. Being public is just the pits.

INTERVIEWER:    Can you expand on that?

EPPERSON:         I think going public today is a bad choice for most companies — not all, but most. It's no fun anymore. Look at what both Tempur-Pedic and Sleep Comfort went through in fighting unfriendly takeover offers in the last five years. Ethan Allen just went through this thing a group of investors is trying to throw the board out. It's not what it used to be.

INTERVIEWER:    How has the role of women in the industry changed during your career?

EPPERSON:         The easiest, quickest fix for the furniture industry is to get more women involved. As it is now, even today, most of your furniture designers are men and they design something and sell it to an executive group that's also made up of men. Then your manufacturing team is made up of men who make the product, and they introduce it to the marketing people, also men, who then sell it through a rep organization that's made up of men. They sell it to retailers and the retail buyers are men. All women do is make the ultimate decision. It's stupid. We've got to change that and we've got to recruit more women into the business.

I looked around this past High Point Market, and if there was a single change at this market from the past five High Point Markets, it was how many more women were there. I really felt like that was a major advance. That's probably because more of the stores are bringing bigger teams back to market to look for product, but I think that's a huge plus.

INTERVIEWER:    That must be a dramatic change from when you started your career in the industry.

EPPERSON:         Oh yeah. You see it with some of the recent inductees to the Hall of Fame. Trying to find women to go in there has been a challenge. For a long time, it was mostly just Mary Henkel but now we’ve got Aminy Audi of Stickley, Stella Harris of Furnitureland South and Jena Hall, the designer. And there are some up-and-comers now who are going to be great in the business.

INTERVIEWER:                    What do you like most about the industry?

EPPERSON:         The people. There are so many different personalities, and the way things work, the way things fit together, is so interesting. The manufacturers and vendors, and the importers, and the retailers — each group has their own particular personalities and challenges and opportunities.

INTERVIEWER:    Is there anything that you're particularly worried about when you think about the industry’s future?

EPPERSON:         We're always going to have to have furniture. It doesn't have to be made out of wood, but people are always going to need something to sit on, to eat on and to sleep on. We're going to be around forever. I'd much rather be making and selling furniture than making food or automobiles.  That's all going to change. As the world changes, the safest place for you is in your home. That’s where your loved ones are, in your home. I just think anything that's home driven is going to prosper in the next 50 years or longer.

Plus you got this new generation coming up that's so exciting. These kids are so entrepreneurial, and technologically savvy, and they’re more productive than anyone else. You've got women earning 60 percent of the degrees. Now, what does that tell you? Who's going to be in control five, ten, fifteen years from now? Who's going to be making more money in five, ten, fifteen years from now? It's great.

INTERVIEWER:    How about the racial and ethnic composition of the industry — is that also changing?

EPPERSON:         Without question. In terms of both manpower and marketing, it's getting better. Remember, that theoretically, the Millennials are the first generation where women and minorities have had the same educational opportunities, and supposedly job opportunities, as white males. What that creates in terms of opportunities and income shifts is very dramatic.

Now they've got to take advantage of it. I think women are doing a better and more effective job of taking advantage of opportunities in our industry right now than the minorities are, but there's a huge role for minorities in our business. If you look around there aren't that many that come down to market. I judge it by market because that's where you have to be if you're going to be successful. I don't know how you cannot come to market and expect to be a successful retailer.

INTERVIEWER:    When you think back on your many decades in the industry, are you surprised that some of the big retailers that were so dominant in the 1960s and 1970s have disappeared from the scene, such as Levitz, Rhodes and Heilig-Meyers?

EPPERSON:         I think we've seen that numerous times. I'm still wondering what on earth went wrong at Heilig-Meyers. Somebody has to explain that to me. They had a wonderful business model. They made money off their financing, and they made money off their merchandising. How could you go out of business? They did. Fortunately there are other very successful chains who do basically the same thing still today very successfully, like Schewels, for example.

A lot of the companies that have failed were well-run companies, very well thought out. I look back on a Levitz, and Levitz was the hottest thing going for a long time. We also had Gold Key, Mangurian's and all these different people copying Levitz for a while. Then they did their first LBO and everybody made a lot of money off of them, because they had a lot of extra inventory. With the second LBO, they put even more leverage on it. It didn't do as well, but it still did OK. So they took it public again, and then they did another LBO.

With those LBOs, what they didn't do was keep the stores in the right locations. They also didn't keep the stores fresh, clean and well displayed. By the time the fourth and fifth owners were coming in and they could buy it cheap, they’d contact us and say, "Well, we're going to turn things around.” It was too late. The stores were in bad locations, with decades of maintenance that had been deferred, and you can't just correct that overnight. The concept of carrying that much inventory at every store also wasn’t working any more. It goes against everything that business schools teach in terms of turning over your product and making your margins. The situation wasn't fixable.

The problem with Levitz, in my opinion, also was it outgrew the family management team. They grew to the point where they were buying high-traffic locations that were too expensive. The problem is that people move and neighborhoods move, and then so does the traffic. They didn't keep up with that.

INTERVIEWER:    Is that a common problem?

EPPERSON:         If you look at our country as a whole, at furniture retailing, most stores fail to move with their demographic. For most people, once they set up a store, that’s where it stays. They say, “Daddy started the store here, so we're going to keep the store here.”

The two retailers that I give most credit to that don’t do this are Ethan Allen and Havertys. They're the ones who aggressively move their stores to keep their stores current with the demographics and the market.

Most stores don’t do that. The market can change so much around you and you're sitting there selling the same thing you sold 10 years ago, but your market has completely changed. That doesn't make any sense. Retail concepts have to change and evolve. We went through a period where small specialty stores were the rage, and now about the only small specialty stores you see are bedding shops. Bedding shops have exploded and are taking over, but there's a tremendous redundancy among the bedding shops. I worry about that.

The only bedding specialist that I see that truly differentiates itself is Art Van's PureSleep. I know I'm biased but the technology that they use with the consumer when they come in and lay down and it prints out options that are best for your particular height, weight and everything, is terrific. I think that gives the consumer a lot more confidence when they go to make a buying decision. Not that they move you to the most expensive bed — they usually choose a low, medium and high-priced bed that are best for you out of the mix on the floor. I think that's what's got to be done in the future. You've got to help the consumer buy something because it's right, not just because you say it's good.

I've always been suspicious when I go in a restaurant and they make a recommendation. When I was at the University of Virginia, and I worked at the Boar's Head Inn, what we told the waitresses to push as a special was usually what we had too much of from the night before. I'm always wary when somebody tells me this is a fantastic deal and once it's gone you'll never be able to see it again. I'm sitting there saying, "Yeah, you got too much of these." That's the way I read it. That's just me.

INTERVIEWER:    So, at Art Van, they’re using in-store diagnostics to give consumers information to better understand their body type and sleep styles?

EPPERSON:         It makes a lot of sense. The first thing they do is they help you pick out the pillow or, as they call it, the bed for the head. I think that makes a lot of sense because a lot of people don't spend any time on the pillow.

INTERVIEWER:    Talk about that time when there were a lot of outside players coming in to furniture who thought they could remake the business. Didn’t most, if not all of them, eventually leave the industry?

EPPERSON:         My favorite example was Champion Paper. They bought Drexel. I happened to sit next to a director of Champion one day on the plane. I can't remember where it was going to or coming from. He was a nice guy, and we were just talking back and forth, when I learned he was on the board of Champion, I said, "Y'all just got rid of Drexel Heritage. Why?"

He says, "Scott Paper got into the business, Mead got into the business, all the other paper companies were getting into the business, so we thought we needed to. Once all the officers and directors had redecorated their homes, we looked at the numbers and it didn't make any sense to keep it." I thought that was probably the most honest answer I've ever gotten.

INTERVIEWER:                    What about Masco? What happened there?

EPPERSON:         Masco had so many smart people. I think Wall Street is what did them in. Wall Street basically convinced them that being in the furniture industry was the wrong thing to do. I think if they had stuck with it, they could have been successful. But Wall Street said, "You're worth more without the furniture operation than you are with."

INTERVIEWER:    There was that immediate pressure for a return, and they didn't have the patience to wait 10 years to see it develop?

EPPERSON:         Exactly. I think it's a shame. I hope someone writes a book about Furniture Brands because that's one terrific story. How could you have the industry's leading brands all under one roof and have them deteriorate and decline like they did? What's so odd about it is five years or so before they went out of business, or went through bankruptcy, they started contributing stock to their pension plan. If you contributed and the stock's $20 a share to your pension plan, and then your stock goes down to $10, all of the sudden you've got to put in enough stock to make it back up. The debt that eventually put them out of business really was generated trying to keep the stock price up to match the pension plan. It was such a shame. You look at the talent that went through that company. I hope the new people at Heritage Home are more successful.

INTERVIEWER:    Did the rise in import competition also play into their demise?

EPPERSON:         I'm sure it did. You look around, and you see that some domestic manufacturers were able move to imports easily and well. But even so, you now have these big Asian factories that invested in China that are no longer price competitive with other countries. They’ve got that investment — they've got those factories. What are they going to do? They got the same problem we did.

Are they going to walk away from those factories? Are they going to start importing from Vietnam and elsewhere? It's a never-ending cycle. What China is doing to us now is exactly what the Southern states did to New England last century. Now I'm wondering who's going to do it to China.

INTERVIEWER:    Is there another new country or part of the world that may emerge strong in furniture down the road?

EPPERSON:         I was thinking perhaps of another planet. We're running out of places to make furniture cheaply. We can't make it out of ice. I don't know if there's anything in Africa. I don't know where else we can go except outer space.

Seriously, China is getting more and more sophisticated in its economy and they don't want dirty, low-paying industries. Vietnam's already making signs that they don't want dirty, low-paying industries. They’re saying, “Thank you for coming in and teaching our people how to work in factories. Thank you for coming in and teaching our people how to work with machinery. But you put out pollutants and don't pay worth a hoot, so now it’s time to go somewhere else.”

INTERVIEWER:    Is that what happened in California? There was such a strong base of manufacturing in southern California up until the late 1980s and all of sudden it disappeared. Was it the tougher regulatory environment that caused most of that activity to move elsewhere?

EPPERSON:         I can't think of anyone I dislike enough to give them a plant in California right now. I know there's furniture made there but it’s nothing like it used to be. Today, there’s regulation on top of regulation.

INTERVIEWER:    Which underscores why the associations are so important?

EPPERSON:         They're the only ones who understand it. I sat through a program with the AHFA in Hickory, North Carolina, a couple of years ago. When Bill (Perdue) got through presenting, I went over to Andy (Counts) and I said, "My God, I had no idea." I didn't understand 10 percent of the battles you guys are facing.

He said, "Nobody does." Everybody assumes somebody else is going to take care of it.”

Going back to the 1990s, there was a regulation that said if you had underground tanks you had to remove them or you could fill them with sawdust or another soluble that would soak up anything that's left in that tank so it couldn't leak. The next year, they changed the regulation where you could no longer keep the tank underground, even if it did have that in it. Now you had to go in and dig the tank up, and the tank now is heavier because it's got all that stuff in it. Now you're not just getting rid of just the tank, you're getting rid of all the solubles that you put in it. By changing the reg that one year they made everything twice as expensive as it had been. The people that met the regs in 1990, as of 1995, had to pay a lot more to meet the new regs. And that’s just one example. It makes no sense.

INTERVIEWER:    Have we reached a place where there's some recognition of the need to protect U.S. manufacturing and jobs?

EPPERSON:         I'd love to think so. I think we've got a really good shot at domestic upholstery. Domestic wood, I'm concerned about, unless you're doing some sort of customized or artisan-type business. Otherwise, the bottom keeps going down in pricing.

Still, one message I’d like to emphasize is that I think the industry is about grow into a period of extraordinary prosperity. I think the Millennials are going to do for our industry, in terms of demand, what we Boomers did, and more, back in the 1970s and 80s.

Unfortunately because of that funk we went through from 2008 to 2012, a lot of our families are saying, “Son, I don't want you in this business. It used to be fun but it's not anymore.” That's not true. It's getting better and better. When we get to where we’re going with household formations and we get where we need to be in housing start-ups that have to come in order to meet the population demand, we’ll have fewer retailers than we used to have and those retailers that are out there are going to get the benefit of all the stores that failed. I hate for us not to get that message across to our young people.

INTERVIEWER:    What do people think of when they hear the name Jerry Epperson?

EPPERSON:         My friend Bob Aragon told me years ago, “"Your humor is so self-effacing."

I reminded him that I'm from a very small town, I had a very modest upbringing, and I've had the opportunity to go to the White House. I've had the opportunity to travel all over Europe, all over Asia, and almost every state here. I've had a chance to dine with the mayor of Hong Kong and I had a chance to sit as far as from here to my wheelchair from the premier of China. Like I tell my wife: It's been a hell of a ride for us. It’s nothing like what we expected.

Somebody once asked me, "Why did you stay in one house 30 years?" The truth is this house is so much nicer than what my wife and I ever envisioned we'd get to live in that we're still amazed that we get to live there. We used to tell ourselves if we could just get a little three-bedroom rancher, that's really all we need. Now we're in Salisbury on the fourth hole of the golf course.

I’ve spent 25 years running this business with the same partners. They’ve been with me every step of the way. It's astonishing. One of the most astonishing things is that Jim and Howard have been willing to defer their own egos so that I can go out there and do the public speaking and win all the awards and get all this recognition. They do nothing but sit back and do the work. It's truly astonishing.

INTERVIEWER:    Did your son or daughter ever consider joining your company?

EPPERSON:         At one time, I was hoping my son would come into the business. But Will said he didn't want to just be known as my son, that he wanted to do other things. I understand that. I think that following a father into business is one of the toughest roads to pass down. When I look at Todd Wanek following Ron, or Glenn Prillaman following Albert, or any of these other families, it’s tough on the kid to live up to what the father did. You end up putting extra pressure on yourself in terms of achieving what you think others expect of you than what they really expect of you. I regret that Will didn't want it, but I'm as proud of Jin as I could be if he were another son.

INTERVIEWER:    Your daughter also sounds happy in her own work.

EPPERSON:         She's doing so good, I'm embarrassed. If I was doing as good as she was when I was her age, I'd be rich by now. I'm most proud of the fact that both my kids are level-headed. They’re not pretentious, they're not pompous, they married well, they're easygoing. We've been so blessed. I tell everybody at Thanksgiving and Christmas, to look around and if you watch TV for 15 minutes, you see where everybody hates everybody, and we don't have that problem. We all love one another.

We're just so blessed as a family. I give a lot of the credit back, of course, to my parents, but a lot of it back to the polio. It lit a light under me that, if I hadn't had polio, I would be an unemployed furniture worker living in a trailer. I wouldn't have had any inspiration to get off my butt and do anything else.

INTERVIEWER:                    That's a remarkable way to look at it.

EPPERSON:         Believe me, relative to many other people in our culture, the Eppersons aren't that far from swinging in vines. I'm the first in my family to go to college. Both my kids went to good colleges, and both did well and married well. I'm hoping to have a lot more grandkids, but I've stopped hinting because they keep telling me to shut up.

I don't even mind not walking. It bothered me for a while, and my doctors were real worried, because they thought I'd get depressed. But as I keep telling them, I don't mind not walking because, while I enjoyed walking, I was falling down so much. What we've learned is that these bones that I have, especially in my left leg, are like toothpicks. It takes nothing to break it. This brace I'm wearing doesn't do anything except make me feel more like if it gets bumped or something like that that it's not going to snap.

Again, it’s what I’m used to. I’ve never owned a pair of shorts. I've never owned a pair of sneakers, tennis shoes, whatever you want to call them, athletic shoes. It's very rare I've owned matching shoes because one foot's a size four and the other's a size six. Don't ask me to buy shoes, I'm not real good at it.

INTERVIEWER:    In addition to your many industry involvements, is there anything you want to mention in terms of community activities?

EPPERSON:         I support my church but my wife does most of the work. She's involved in 15 different committees. I don't know what all she does up there but she's up there a lot. She also does volunteer work with a couple of low- income schools. She's the one that does it all.

INTERVIEWER:    When you have time off, what are some of the thing you do to relax?

EPPERSON:         When Kathy and I had young kids and I was going to all these conventions, we’d go to Orlando three and four times a year. I’d speak at conventions in Hawaii and all these different wonderful places. At that point in time, Kathy and I never had an interest in getting our own vacation place because we always got to vacation at these other places at other people's expense. There’s nothing wrong with that.

But In 2000, we decided we wanted to have a place of our own that we could go to. That’s when we bought this little farmhouse at the beach, about an hour-and-a-half from here. It was built in 1899 and should have been torn down a long time ago but we thought it had character. We went in and put in central air and all the things to make it modern.

I cannot tell you how much it means to have a place where you do nothing but relax. We have so much wildlife down there, and we can just name everything — you see it down there all the time. It is entertaining, it's relaxing, and if right now somebody came to me and offered me a trip to wherever, I’d rather go to our little farmhouse.

We especially enjoy having our children, and our granddaughter Julia, join us there. It’s like having your own private beach.

INTERVIEWER:                    How often are you able to get there?

EPPERSON:         During the summer months we'll go two or three times a month, if I don't have to travel somewhere else. During the colder months, we go there maybe once a month. Right now, we're in the process of downsizing from our main house to a condo, so we're not going down there hardly at all. I miss it. Instead, I’m spending all my spare time working at home, throwing this away, throwing that away, finding those Christmas presents I set aside in 2006.

INTERVIEWER:    I see lots of interesting memorabilia here in your office, including replicas of the Titanic. Can you tell us about that?

EPPERSON:         I started collecting miniature models of ships used in movies a long time ago. That used to be the way directors did the special effects. That one was used in the movie "Raise the Titanic". At the end of it, the director sent it to me. Unfortunately, it's been dropped a couple of times and it's not in good shape anymore. That's why it's up there and not where you can see it. Until then, that sat on the corner of my desk for a long time so people knew I liked the Titanic.

One day, a friend told me about that one. That was made in the Russian shipyards. It took 1,500 man hours to make. It's not a kit. Every part of that was made by hand. It was available through an auction at Sotheby's. I put in what I thought was a reasonable bid, but Kathy would kill me if she learned what I paid. So I got that. That is truly a museum quality piece.

INTERVIEWER:    The detail is incredible.

EPPERSON:         Then after that, my hobby kind of mushroomed. This model came from a friend of mine named Joe Guthrie. Joe also gave me the Richmond newspaper that was put out right after the Titanic sunk. My nephew gave me the big blueprint you see on the wall.

This one was made in New York City by a pharmacist who makes one very detailed model every year and then sells it and contributes the money to his church. That one you see is hitting the iceberg and it lights up. It's got people on the decks and all that. The one right above it, my granddaughter and I made. It’s made out of building blocks similar to Lego's.

Then the one right under the TV set is the neatest one of all. It was put together by a group of students. On the right front, there's a little panel that you can pull back that opens up a little slit in the side of the Titanic. You put in a tank of water and the bow will slowly sink and the rear end will come up. At the just the right point, it breaks. The back half of it then falls back in the water. The front half sinks to the bottom of the tank. The back half slowly fills with water and then it sinks and follows the front end to the bottom.

INTERVIEWER:    That's ingenious.

EPPERSON:         You can see the crack there, where it's designed to break. It is truly amazing.

INTERVIEWER:    So you occasionally re-enact the sinking?

EPPERSON:         Only once. It just blew me away that it worked.

That model is of the Enterprise. I've got a friend who used to bring in furniture and he worked with a company in the Philippines. His manager of the plant over there used to take scrap lumber and make airplane models. They sold them. We've got a few around here. He built that up into a pretty good size business.

One day, he had his people take pictures of the U.S.S. Wisconsin. They then got a book with all the measurements and made a bunch of all-wood, hand-detailed Wisconsin replicas. The local paper in Scottsdale did a story and somebody flew down from the Navy department and bought all of them and they used them as gifts. So then they made copies of the aircraft carrier Enterprise.

Well, one guy from the Navy looked at it and said, "It's a beautiful model, but we like battleships." So Ed called me one day and he said, "You want an aircraft carrier?" That's where the aircraft carrier comes from. It's got a mirror behind it, so you can see both sides.

I also like miniature furniture, and I like hand-carved bears. All these are from Big Sky Carvers. My whole beach house is decorated with bears.

INTERVIEWER:    Any other hobbies you’d like to mention?

EPPERSON:         One of my favorite professors at UVA was the first person to tell me about the cartoonist Carl Barks. Carl Barks took over from Walt Disney with the Disney Ducks. While Walt Disney created Donald Duck, Carl Barks created Uncle Scrooge and Huey, Dewey and Louie, and April, May and June, and the rest of them.

If you look at his art and the way it's drawn, in the scenes behind the primary character, it could be in a framed picture, it could be the grain in the hardwood flooring that he's walking on, there's another story in there. Sometimes two more stories. There have been doctoral thesis written on Barks Art and the other stories, and how they are related in the background of these cartoons. I enjoy that a lot. I still get the comic books and I read Disney Ducks when I have a chance.

I read all the time. I enjoy reading and I don't care whether it's newspapers or magazines or trade publications. That’s kind of what I do for my Furnishings Digest newsletter now. I'm going through all these different publications trying to seek out anything that on some plane has something to do with the furniture industry and that we can glean an insight from.

That research also helps us put together those big studies that Jin and I do, like our recent Home-Centric report about more people doing things more from home. Whether it's our distribution analysis with what's changing at retail, or our import study, or our new economic forecast that I'm working on right now, we’re the only ones who do such things. They’re good for me because they make me keep up with everything.

If you're a major private equity group or a major corporation somewhere and you're looking at doing something in the furniture industry and you want to learn about it, you can come here and we can show you documents that explain the different sectors to you. How they work together and all that. What we put in our publications isn't even half of what we know, it's just a tease to let you know that we know what we're talking about. That's our marketing difference.

INTERVIEWER:    Your dad must have enjoyed seeing your involvement with the furniture industry, and some of the executives he had met, deepen over the years.

EPPERSON:         Absolutely. He just loved the fact that I got to know Mr. Lane. That was just wonderful. In fact, when dad retired from the railroad, he went with me on all my travels for a year or so. He had such a wonderful time.

INTERVIEWER:                    What a great experience.

EPPERSON:         That was before he got sick. When dad stopped working, he passed away very soon thereafter. I'm afraid the same thing will happen to me if I don't stay busy. I need the discipline of getting up and talking on the phone and visiting with folks. Staying at home and doing nothing? Kathy told me if I wanted to retire, that was fine as long as I found her a job to get her out of the house every day. I agree with that.

INTERVIEWER:    Jerry, we've covered a lot of ground. Is there anything I haven't thought to ask you?

EPPERSON:         You haven’t asked me how I stay so damn good looking.

INTERVIEWER:    That goes without saying. Jerry, it’s been an honor to talk with you. It’s been a very enjoyable discussion. Thanks for your time.

EPPERSON:         Thank you for driving all this way to Richmond to share Chinese food with me.