[bright music] - Hello, I'm Nido Qubein.

Welcome to "Side By Side".

My guest today travels the world looking for what he calls the wow in designing furniture.

His ideas are sparked by the beauty he discovers in a forest, a stream, a cave, a mountain, or even a construction site.

As he likes to say, inspiration is everywhere.

He has turned his inspiration into a family business known worldwide, and it's based right here in North Carolina.

Today we'll meet Mark Phillips, the founder and CEO of the Phillips Collection.

- [Announcer 1] Funding for "Side By Side" with Nido Qubein is made possible by- - [Announcer 2] We started small, just 30 people in a small town in Wisconsin.

75 years later, we employ more Americans than any other furniture brand.

But none of that would've been possible without you.

Ashley.

This is home.

- [Announcer 3] For 60 years, the Budd Group has been a company of excellence, providing facility services to customers, opportunities for employees, and support to our communities.

The Budd Group.

Great people, smart service, - [Announcer 4] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors, locally, thanks to our teammates.

We are Coca-Cola Consolidated, your local bottler.

[bright music] - Mark, welcome to "Side by Side".

I've been very fascinated with your work, what you do, how you founded this company, what the products are, where you bring them from, and I want you to just educate us.

What is it that Phillips Collection does that is different than, distinctive in its own way?

What is that product line?

- We bring to market in partnership with nature, quite often, in organic contemporary furniture line, where we harness the beauty that nature has given us, and shape it into practical, usable products that provoke conversation.

- Give me an example.

What does that mean?

You partner with nature, and you turn it into something worthwhile and useful.

- We will look at the roots of a long ago felled tree, a teakwood tree that was harvested in Thailand has a root structure that goes out as far as the tree is tall, so 100 foot tall tree would have a root that's 100 foot in diameter.

We dig up those roots, and we carve them and cut them into coffee tables, dining tables.

- [Nido] I see.

- Sculpture, and try to be able to share neglected pieces of nature that are really quite spectacular.

- That's very interesting.

So you also plant lots of trees in Thailand.

I read somewhere where you've planted thousands and thousands of trees.

- It's an amazing opportunity to give back, but it actually sprung from an observation of ignorance of the next generation as to what these people really had.

I was in northern Thailand, and my main supplier there had to leave to go see a school for his child there, an elementary school.

And I said, "Oh, I'd love to see what you have."

And I went there and it's a beautiful campus, quite poor, and surrounded by magnificent trees.

And I asked the students, "Can you tell me "what this tree is?"

And they said, "No."

And I said, "Do you wanna do what your father does?"

And they said, "No."

So it was really quite interesting that in the midst of this beauty, there was just no tradition being handed down.

So I also noticed that they weren't playing at break time.

They were sitting around on their iPhones, and here you have these wonderful fields and beautiful weather.

And I said, "Why aren't you on the playground?"

And they said, "It's all deteriorated."

"It is rusted.

"The teeter-totter will teeter, it won't totter.

"And the seesaw would go only one way."

So I made a bargain with them.

I said, "If you guys, you six to 10-year-old kids, "can learn the names of the trees on your campus.

"I'll rebuild your school.

"I'll rebuild your playground."

And it was a modest expenditure, but they set up a botany class.

They took the name of each tree in Thai, and wrote it on a piece of paper, and hung it from that tree, and the next class would come out and say, "Oh, mango tree," in Thai.

And when I came back in three months, it was a very popular course, and they had aced it.

So we began to talk about awareness of what nature has around it, and they said, "Why don't we have more trees?"

And I said, "That's a wonderful idea.

"Let's plant trees together."

And I was able to gather 400 people to each plant 15 saplings.

It's a modest undertaking.

10 minutes to dig a hole, put the sapling in, get some water.

But 400 times 15, pretty soon we had 6,000 trees planted.

It took a day.

The military was involved, the teachers, the students, the workers, the farmers, the teachers.

It was an amazing collaboration.

And it opened my eyes as to how much good can be done with easy effort.

- But you majored in economics, not in biology, or botany, or anthropology, or any of those.

What got you interested in all this?

- It's an accident of circumstance.

I'm married to an architect.

My son is an industrial designer.

My daughter Jessica, who is also involved in the business, has a passion and an understanding for fashion and design.

That's not my strength.

I'm the pragmatist and I can see the opportunity.

So I think without some of the limits that others have, that wouldn't this root look great if it were on a wall?

And so we have these spiral patterns, or magnificent things that you look at, and you have to have a double take.

So I don't pretend to be a designer.

I'm smart enough to have developed good taste, but it's not in inherent in me.

My wife looks at a floor plan and understands the corner.

I have to stand in the corner to imagine what she's describing.

My son, who is an award-winning designer, with a degree in industrial design, is colorblind.

So he- - Wow.

- So, but you know, that hasn't been a limitation to form and function, and he sees degrees, but it's interesting what collaboration can do to create and overcome the weaknesses, or gaps in others.

Interestingly, we have recently had a serious partnership with Artists with Abilities, where we are working with what, - What does that mean, Artists with- - We are working right now with some groups in Winston-Salem with children that have special needs.

- I see.

- And haven't- - [Nido] This is the name of a group, Artists with Abilities?

- It's the moniker we've given it.

- [Nido] I see.

- Because these are, these kids have special abilities, and the fact that you don't have the movement of your hand, or the ability to construct sentences has nothing to do with the ability to create beautiful things.

So we have had a very interesting partnership where we take pieces from Phillips Collection, and we give them the paints, and with their art teacher, really ask them to go at it, and they create things that others wouldn't expect.

And we offer them for sale unapologetically at the High Point Furniture market, which is the big event in High Point for retailing or wholesaling of furniture.

And the pride and joy and offering is just incredible.

Nobody told them that black can't go with brown.

So they do things that you can't imagine.

I was struck by one young lady who has severe limitations of her hands, and she was holding a camera like this, and I don't even know how she was able to take the photos, but when I looked at her output, the vision she had for framing the items, it was mind blowing.

So it's a great opportunity to coax beauty out of nature, out of study, out of science, and out of the abilities of the unexpected.

- And not everything that you create comes out of the root of a tree?

- No.

- [Nido] There are other products from other sources?

- Correct.

We can't starve.

We have to have more practical products.

Not everybody wants a 12 foot long live edge table that weighs 800 pounds.

In fact, part of our capabilities is to ship and pack 800 pound tables.

Why not get into the 800 pound stone business?

So we have expanded not just from roots, but where we have a product called Origins to where we mine minerals, and shape them into exciting, unexpected and brilliant form.

- And what part of the world is that sourced from?

- That's Brazil, Mexico.

Some of our products actually come from Afghanistan and Congo.

So it's interesting where great minerals are found.

- And your customer base is home furnishings, or is it commercial?

Is it hospitality?

Who uses these products?

- Great question.

Our best customer is a designer who understands the imperfection- - Right, but ultimately.

Yeah.

- And that goes into better quality, higher end retail establishments, and we have a great foray into hospitality and into restaurants that want conversation-provoking products.

They want the stay there to be memorable.

We have 20 foot long conference tables that we make, and we always use a single slab of wood.

It's very hard to get nature to cooperate.

And we never cut down trees to make our product.

We have arrangements to buy the trees that have to be cut down when roads are widened.

When hospitals are being built, when schools are there.

So we have a local bank that we provided a couple of conference tables to, and it's quite easy for us to add USB ports and power, and make these functional.

And they came back after six months and said, "Mark, I have a complaint."

I said, "What is it?"

He says, "Everybody comes in, loves the table.

"Six months later they come back.

"Nobody remembers the agenda.

"Everybody remembers the table."

- Good for you, right?

- So it's good for us.

- Good for you.

So where would I see your products generally?

Is it, and they're not all a large table, right?

Some of them are small- - No, we have accessories and tabletop.

We have great retail partnerships with people like Restoration Hardware.

You'll find some of our products at the Better Retailers throughout.

Locally, we have a terrific partnership with Furniture Land South.

- And you show, you have showrooms and I assume in High Point, but where else?

- Also in Las Vegas and Dallas.

We are in the airport.

We have exhibited in many of the shows that are in facilities and conference centers, like in New York Javits Center, when they have shows for designers, architects, - Atlanta Gifts?

- Atlanta Gift has been a great place for us as well.

- What is the biggest challenge in your business?

Is it marketing the product?

Is it sourcing the product?

Is it getting people who can work on the product?

What challenges you?

- Can I say all of those?

- [Nido] Yeah, but in what percentages?

- You're asking for biggest.

You know, people are your business, and we would be nothing without the loyalty and talent of our, and we've had remarkable retention, but it's harder as we have grown to find people that have the work ethic and sensitivity and longer term horizon that we need.

So the product, interestingly, there are always hiccups in supply chain, and these gracious pieces are disappearing.

And we want to be mindful of our stewardship and what we can do.

But we have managed to continue to find new sources as we go into the minds of Brazil and bring out amethyst, or the rivers of Indonesia where we find incredible neglected pieces.

The hardest thing for us to do is to scale our business.

Many people want one dining table.

I can't sell them three.

- I see, I see, yeah.

- So we have to, as a company that sells many one of a kind business products, we've had to give an individual SKU, an individual identifier, so that if you go to our website and pick out a dining table that's eight feet long, and it's curved a little bit to the left, and it has this character, we wanna make sure we get you that one.

And in the past, we've had our sales representative in Texas sell the same product as our sales rep in Miami.

And I've aggravated a customer who's committed to a significant purchase.

So we have learned the need to become technologically competent, to have our inventory now in the cloud, and instantaneously have a product disappear when somebody else claims it.

So it's the need to sell products one by one by one in our Origins, or our Elements Collection, that has presented a problem in scale.

- Yeah.

But you're not suggesting that any product you have, you only have one unit of it?

- Correct.

- There are some, like an amethyst or whatever, you can create many, many copies of the same thing.

- Right.

- Right?

- We have a repeatable line where we try to find unique and high style products that we can cast, and apply a bunch of finishes ranging from liquid silver to gold leaf, to bronze patina.

So yes, that's an important part.

What really separates us is the uniqueness and the unexpected combinations that you'll find at Phillips.

- And so you went to University of Michigan, you were born in New York?

- [Mark] Yes.

- And you went to University of Michigan, studied economics.

- Correct.

- [Nido] And then you began your business, Phillips Collection, what year?

- 1981.

- [Nido] And where was the first showroom, or the first central location?

- We warehoused, if you can imagine that, in Manhattan on 61st street.

And we would receive, not a container, but a small portion of a container.

Imagine bringing in enormous pots or roots- - [Nido] Yes.

- Into a building on the third floor.

- Yes.

- With navigating- - How did you do that?

From the outside into the window?

- Sometimes from the outside.

- Yeah.

- But often you learn some hard lessons about a 40 inch diameter pot and a 39 inch diameter doorway.

- So are you suggesting, therefore, that you buy the product, you source it, you warehouse it.

- Correct.

- Then you display it.

- Correct.

- And then you sell it to designers who then are serving retail, commercial, et cetera, customers?

- Exactly.

- You don't take an order and go find something?

- We can do that, when it's within our can, if we understand how to get it, we do custom work on a regular basis.

- [Nido] I see.

- People see our potential, like the caliber of product we have, and find a bar made of onyx and say, "I need it, but it's gotta be 20 feet long.

"Can you do that?"

And no, it won't withstand that span, but we can do two tens, and we can combine this.

And so we, in collaboration with designers who understand our product, create spectacular products that fit the niche required.

- So your price, therefore, has to reflect the inefficiency that is found in non-duplicatable product, right?

If you're gonna go find one product, warehouse it, and sell it, you can't amortize that cost over 500 units of the same?

- Well, you are obviously the economist.

I mean, you've nailed it.

[Nido laughing] But yes, it is something, people don't mind paying more if it's worth it.

- [Nido] Yeah, yeah.

- You have to demonstrate a difference, and then it's up to the individual to see if that difference is worth the price- - Your customer's always a designer?

- No, but best a designer.

- I see.

- And now, as we are selling through some of the major retailers, it is, of course, accepted by the public, and so it has to meet with their approval- - I mean, I asked the question because designers typically have more leeway in pricing and so on.

They're trying to create something unique, distinctive, fit, a certain design or placement in a certain location.

And therefore, you know, you're gonna do better with a designer than with a retail customer, like me going in and saying, "Hey, I like that," and "Oh my gosh, it costs that much?"

- We'll do better and you'll do better if you recognize the need and the contribution of the designer.

So, but as our business grows, and as our digital muscles improve, we are doing more and more outreach on the internet, so we have to be very careful.

- You don't have an E-commerce business?

- [Mark] Not B2C, not business to consumer.

- Right.

- But business to business- - I see.

- But when we market a product through Wayfair, the consumer is seeing our image.

He's ordering it through Wayfair, or through one of our retail partners, or through the designer.

- So if I go online and go to Wayfair, the founders of whom, by the way, I know, and you know.

- [Mark] Yes.

- Again, another innovative duo that had an idea and went out for it.

I see it online.

I see a picture of it online, and I order it.

- Yes.

- I'm assuming you have it in the warehouse?

- They will only take products that are on stock, or a reliable history of delivery dates.

- Because they're looking for a quick turnaround delivery?

- And they're looking for, they are looking to not disappoint the customer.

- Yes, yes, yes.

- Today everybody, I mean, next day is not even good enough sometimes.

- Yes, yes.

- So, and our product, when you buy a particular dining table, it takes us two days to prep it.

The photo that you see, that we took when we unloaded it in the container, is nowhere near as beautiful as the product you're going to get, because we deluxe every one 100% QC.

- Where you do that?

- In our showroom, in our warehouse, excuse me, in High Point where we have- - [Nido] I see.

Where do you get the craftspeople to do that?

- Actually, we have a few inspired experienced craftspeople, but we have trained and have tenured carpenters.

We have six full-time carpenters who make sure that everything is level, that any potential problems with a big thick piece of wood are adequately dried and have the protective, we call them butterflies.

So that when you have a live edge product that's thick and comes from a rainforest, there are special considerations.

- [Nido] Yes.

- The real torture test for us is selling a product in Denver.

When a product goes to Colorado, they have dry, they have heat, they have snow, they have freezing, they have wet.

And so it goes through all of the environments.

- I see, I see.

- [Mark] That challenge the movement of organic- - All the things that impact the preservation of that product?

- So if it can endure Denver, we're in great shape.

- [Nido] I see.

- Miami, on the other hand, is a replication of the rainforest environment it's in.

- It's easy.

- They thrive.

- [Nido] It will survive.

- So we have to Denver-proof our products, and then we can go.

- I see.

In the state of North Carolina, where might I go and see some Phillips Collection and how would I know that's a Phillips Collection item?

- Interesting.

We both market anonymously and proudly with our name where the retail partner allows it.

The best representation would be Furniture Land South, who is a million square foot largest furniture store in the world, that has a significant sprinkling of our product throughout, with everything from their hospitality entrance, to their sleep center, wall art, to dedicated showrooms that have Phillips Collection.

So you can see our product in a Furniture Land vignette or in a Furniture Land room.

In other retail partners that we have will be integrated into it, and hopefully our products have enough of an identity, they leap out and say that's what's making this room.

- But in terms of finding it in a final placement in North Carolina, where would I see it?

Do I see it in a museum, in a university, in a business headquarters?

- You can, it's hard to see it in consumer's homes, because that's quite a private moment.

- Right.

- But we have had a wonderful opportunity to place certain pieces here.

- Yes.

- You will see it frequently in restaurants, in hotels.

- Yes.

- As well as homes throughout.

- And how would I know it's a Phillips Collection item?

Give us one or two descriptors, if you will.

I acknowledge the fact it's unique, distinctive, you know, I mean, I think I can spot some of your products.

- Yes.

- But if I've never known the Phillips Collection, what are some of the distinctive elements that would say, "Hmm, that's a unique product.

"That looks like it could be a Phillips Collection item."

- There has to be a reference to nature, and there has to be something unexpected.

- Always a reference to nature, whether it's a stone, whether it's wood?

- The inspiration comes from nature.

The interpretation can be varied, but it should have a nod to nature for creating- - [Nido] When you say inspiration, do you mean, you mean the identity of the image, or do you mean the actual raw materials that makes the image?

- I'm more referring to the image, and not the raw material.

- [Nido] Okay.

- But I mean, we try in our Origins and Elements lines to use only natural material, but we have casting capabilities and ceramic- - [Nido] I see, yeah.

- And that allow us to show things- - [Nido] You have a deeper, wider product line, and so- - We have almost 8,000 SKUs.

- [Nido] Wow.

- Stock keeping units.

- Wow.

- So it's quite hard.

Many of them are one of a kinds, but we are technologically very efficient, and we keep track of our inventory, and we keep track of our ability to present this remotely.

That's our goal.

How can we create more business rather than just the incredible jaw-dropping impact of walking into our showrooms, and seeing things of a scale and proportion and combination that are totally unexpected?

- You are a founding member of the Sustainable Furnishings Council?

- [Mark] Yes.

- What is that?

What does it do?

- We wanna be mindful that these great treasures that we find are not infinite.

And we want to be, you know, fortunately my kids are my partners, and they are spearheading all of the green thinking that has to be a part of businesses as they grow, and what we can do to give back.

Sustainable furnishings makes us think, what can we do to not waste?

How can we transport this more easily?

How can we create, how can we monetize, not just the root of a tree, but the trunk or the crown?

The crown is where the trunk turns into the beautiful branches.

- You use all of it, in other words?

- We try.

We invest a great deal of effort and time to use everything.

And the sawdust is used to fire the kiln, and the chips and fragments of teakwood, we are now using to, we have a line called Teak Slice, where we take the end cuts and piece them together, and create conventional shapes, round tables.

And we're always looking to find ways to create things.

This is a specialty of my son Jason, who is our industrial designer.

And I said, "I'm finding a lot of these capabilities.

"You figure out how we can scale it."

And he'll take an unusable root of a tree, and figure out how we could adhere a metal shelf to it.

And all the something that should be, something that would be neglected or thrown away, or used as kindling, can be something of beauty, and can be remarkable, which is an important part of what we want.

- Yeah.

What you do is fascinating, because it's innovative, it's creative, it's enterprising, but you've taken nature.

You said, I love your term, "We partner with nature."

You've taken that, and you've said, "How do I multiply it?

"How do I extend it to as many uses as possible, "through as many environments and sectors as possible?"

And yet, I suspect, make it affordable and lasting in its beauty, and its usefulness.

Mark, what fascinates me about our state of North Carolina is that we have so many people who have great ideas, and Philip's Collection is just a great idea.

You had an idea, and you took a risk, clearly, from being in New York to begin with, and then expanding worldwide.

And you've employed a lot of people, and done a lot of things.

And for that, I honor you, my friend and I thank you very much for being with me today on "Side By Side" - [Announcer 1] Funding for "Side By Side" with Nido Qubein is made possible by- - [Announcer 2] We started small.

Just 30 people in a small town in Wisconsin.

75 years later, we employ more Americans than any other furniture brand.

But none of that would've been possible without you.

Ashley.

This is home - [Announcer 3] For 60 years, the Budd Group has been a company of excellence, providing facility services to customers, opportunities for employees, and support to our communities.

The Budd Group.

Great people, smart service.

- [Announcer 4] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors, locally.

Thanks to our teammates.

We are Coca-Cola Consolidated.

Your local bottler.