Summary
Overview
John Gabbert founded Room and Board after leaving his family's traditional furniture business, Gabbert's, following a bitter falling out with his father. Inspired by IKEA's vertically integrated model in the 1970s, John built Room and Board into a national modern furniture brand known for American-made, high-quality designs featuring steel, solid wood, and natural fabrics. Despite family estrangement lasting over a decade and refusing all private equity offers, John grew the company organically into a hundreds-of-millions-of-dollars business that now operates as an employee-owned ESOP.
The Family Business and Early Influences
John Gabbert grew up working in his father's traditional furniture store in Minneapolis, which sold American colonial-style furniture - very different from mid-century modern designs. While running Gabbert's in his early twenties, John became frustrated with the manufacturer-controlled model where retailers had little input on product selection or longevity. A 1972 trip to IKEA in Sweden proved revelatory, showing him a completely inverted business model where the retailer designed products and controlled manufacturing.
- Gabbert's sold traditional American colonial furniture with turned legs and floral prints, not the mid-century modern associated with that era
- John's father innovatively displayed furniture in fully decorated rooms rather than rows, and included a coffee area and kids' play space
- John became president at age 23, running the business while his father spent six months a year in Florida
- He grew frustrated that manufacturers controlled product selection, frequently discontinued items, and salespeople on 100% commission worked for themselves, not customers
- A 1972 trip to IKEA showed John a model where retailers designed products and controlled manufacturing - a revelation that shaped his future
" Sometimes the decisions you made where you did nothing is the most important decision in the business. "
" If somebody is working for you on 100% commission, they're working for themselves. They're not working for you. "
" I just remember being startled by how much sense it makes, knowing that the frustrations are with dealing with American manufacturers, the way the process was set up. "
The Family Rift and Breaking Away
In 1980, John's father reneged on a legal agreement to sell him controlling shares of Gabbert's, believing John's modernization efforts would ruin the company. When John's three siblings sided with their father, John faced a choice: sue his family or walk away. He chose to leave, trading his 30% stake in Gabbert's (worth $800,000) for full ownership of Room and Board, a small experimental division he'd created. This decision led to a decade-long estrangement from his entire family.
- John had a signed legal agreement from 1977 that his father would sell him controlling interest by October 1, 1980
- His father refused to honor the agreement, fearing John's changes would ruin Gabbert's
- John's attorney said he could win in court in 2-3 years, but John refused to sue his family
- John traded his 30% stake in Gabbert's for full ownership of Room and Board, which had just three locations
- All three of John's siblings voted with their father, leading to a family estrangement lasting at least 10 years
" I basically didn't see family for at least 10 years. "
" I spent those next six or eight years, I did a variety of things. I started a business called Bedrooms for Kids. I had a wholesale showroom. I bought a design studio. So I spent, as I look at it now, I kind of wasted eight years doing things instead of building room and board. "
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