Montgomery’s approaches 130 years with eye toward sixth-generation leadership

This piece is presented by Prairie Family Business Association.

Alexandria was where the train line ended in Dakota Territory and a business began in 1888.

The passenger, George H. Montgomery, had gotten on board in his native Wisconsin and gotten off when he could go no farther. A woodworker, he used his skills to start Montgomery’s Furniture and Funeral.

“It was natural to build caskets and furniture,” said Clark Sinclair, the fourth generation to lead Montgomery’s.

Next year, the business will celebrate 130 years. Next month, it will accept the 2017 Boyd Hopkins Sr. Excellence in Family Business Award from the Prairie Family Business Association.

“This award is bestowed by families who have won it previously, and they clearly recognized the rare achievement Montgomery’s has made transitioning its business over more than a century,” said Stephanie Larscheid, executive director of the Prairie Family Business Association.

“In Montgomery’s, we see an example of a business that has adapted to the ever-changing retail industry while carving its own niche and giving back to its communities.”

Successful successions

George transitioned the business to his son, W.R. Montgomery, in 1918. Two years later, George’s son-in-law Gilbert Loomer joined the team. Gilbert’s two sons eventually bought the business in 1959.

A horse delivers mattresses in the earliest days of Montgomery’s.

“Following a devastating fire in 1964 that destroyed the then downtown Alexandria store, the interstate had just gone through, so they put a building on the interstate,” Clark said. “That was a pretty modern thing at the time. All the furniture businesses were in little towns everywhere in old buildings downtown.”

The brothers opened a store in Howard after requests from the community and then one in Arlington.

Son-in-law Clark Sinclair joined the business in Howard in 1977.

Clark and Connie Sinclair

“Little towns didn’t pan out well because the rural population in the 1980s started declining,” Clark said. “When I started in Howard, there were a dozen stores within 40 miles selling furniture.”

Clark, though, never saw himself getting into the business. He loved his job as a school counselor, but after agreeing to help his in-laws, he came to embrace the furniture industry.

“I remember how hard my parents worked and how often they were at the store,” said his son, Eric. “It was your typical small family business where they were making it all happen on their own.”

Eric Sinclair

It’s a rule in the family business that the next generation gets experience working elsewhere. Eric worked at the Madison golf course and grocery store, and mowed yards growing up.

He graduated from Augustana University, became a manufacturer representative for Rowe, a fashion-forward upholstery company, and lived in Michigan and Houston for 10 years.

“My wife, Neala, and I worked together, and we were loving our life and our job, but we came to a point where we wanted to start a family and decided Houston wasn’t going to be the place,” Eric said.

“We take a lot of pride in being a fourth-generation business that has the opportunity to get to the fifth generation, so it was an intriguing challenge to carry on the legacy. And I’ve lived all over the world, and South Dakota is one of the greatest places, so getting back was a real blessing.”

Transition and growth

Eric and Neala moved back in 2006.

“It was kind of a unique transition,” he said.

He thought he would spend time in each department and in various roles. Instead, his parents put him in a leadership position “and let me learn as fast as I possibly could,” he said. “I have amazing parents who gave me a ton of leeway to learn and fail on my own and then be there to support me. So it’s been an interesting journey.”

It just seemed like the right approach, his father said.

“He was old enough and had been around enough that it wasn’t like he was just out of school,” Clark said. “We knew Eric had a great opportunity to do things that needed to get done if we were going to change.”

That began a whirlwind five years of growth. Montgomery’s opened a Sioux Falls distribution center and acquired furniture businesses in Watertown and Sioux Falls. The company doubled the size of the Sioux Falls store to include a full design studio, Mattress 1st Sleep Center and Montgomery’s Modern showroom, and remodeled the Madison store.

“A lot of family businesses haven’t been able to compete because they have not reinvested in their businesses and done things that allow them to be competitive,” Clark said. “We knew we had to grow if we were going to be competitive.”

During that time and continuing today, Eric has been able to rely on an affinity peer group he belongs to through Prairie Family Business Association.

“In the peer group, I see what lots of generation changes look like, and mine was extremely unique,” he said. “The biggest benefit is just the opportunity to network and get to know people in the same spots in their lives and what their challenges look like and learn from them. It’s has been very helpful.”

Legacy continues

Eric was named president of Montgomery’s in 2013. Clark remains CEO, focusing mainly on special projects. Connie continues to play a key role in merchandising, and Neala works in the business office. A newly formed senior management team will support Eric as his parents transition to retirement.

The Sinclair family

One thread throughout the generations is a lack of entitlement, Eric said.

“Because you had two son-in-laws come in who weren’t handed the business and we had a family policy where you don’t have an option of coming into the business but have to be successful on your own, that’s powerful,” he said. “People were excited about the business but weren’t handed the business. They had an opportunity but didn’t think something was just going to happen.”

Clark also credits an intense focus on buying, which he describes as an art and a science. Twice a year, a seven-member team attends market to choose merchandise. The team members go to multiple other markets.

“We want the business to be fashion-forward, exciting, and we want people who have a passion for design and fashion changes,” Clark said. “That can attract the kind of customer who has a little higher expectation of what they want in their home. It’s not the easiest part of our industry to make work because it’s a lot of work.”

The staff of 100, however, finds a culture of respect within Montgomery’s, he said.

“The most important thing is finding the right people with the right attitude about work and treating each other with respect,” Clark said. “I’ve never felt it was how much business we did. It was how we did business. And that’s being a family and not heavy-handed or disrespectful.”

Montgomery’s has been able to attract “really amazing people,” he continued. “And as we grow, we’ve been able to attract a really broad range of people and pay better and offer more benefits. We still pay 100 percent of the employees’ health coverage. Those are the kinds of things that are important to us.”

The Sioux Falls team at Montgomery’s

Of course, it has taken decades to get there and support along the way.

In a fitting twist, when the business accepts the Boyd Hopkins Sr. award next month, it will create another tie between the Sinclairs and the Hopkins family – their lender at CorTrust Bank for many years.

“When we moved to Sioux Falls, there were no family members financially backing us. We were on our own,” Clark said. “If it wasn’t for Jack and Boyd Hopkins, we probably would not have survived. Jack was our banker, and he was really supportive. It was not a normal banker-client relationship. He was so easy to work with. And to be chosen for this award by peers who have won in the past is really special.”

The Watertown team at Montgomery’s

Montgomery’s has no thoughts of slowing down. Clark and Eric foresee more opportunities to grow through acquisition.

Eric’s biggest goal for the business, though, is seeing it through to the sixth generation.

“I think I have the work ethic of my parents, and they have taught me many great things. One of the top is you reinvest almost every penny back into the business. Everything goes back into making sure we have state-of-the-art facilities filled with beautiful products and a great staff.”

He might be well on this way to his ultimate goal, too.

Eric’s middle daughter, age 7, is known to stand at the front of the store, pointing, and ask: “Who’s waiting on that customer?”

“Hillary didn’t get to be president,” her grandfather, Clark, said. “But she might be.”

The Prairie Family Business Association is an outreach center of the USD Beacom School of Business.

Montgomery’s approaches 130 years with eye toward sixth-generation leadership

The business started building furniture and caskets, will turn 130 next year, and is getting a special award soon.

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