By his own admission Julian Tertini is no good at running a furniture store. That comes as a surprise given his name is inextricably linked to two of the biggest names in Australian furniture retailing.
Tertini, born in Italy in 1948 before migrating to Australia aged two with his parents Marino and Nives, helped set up pioneering retailer Freedom Furniture in the 1980s.
Today, he is managing director of Fantastic Holdings Ltd, Australia's largest vertically integrated furniture company. His rise to the top of the retailing sector is the tale of a great businessman and a dash of good fortune.
In the 1970s, Tertini was working in the public service in Canberra, dissatisfied with his career and with an inkling he wanted to run his own business. A new home owner, he was on the hunt for cheap but trendy furniture. At a store in the Canberra suburb of Fyshwick, he came across a shop selling state-of-the-art designs made from pine. Tertini looked around and realised the store was full of young people like himself handing over money.
"I thought: ‘Hey this looks like a good opportunity, furniture might be the go to make money’.”
Lady Luck was standing by his side that day as the sales assistant who served him, an old man nearing retirement, offered to introduce him around the Melbourne manufacturers.
From the basement up
Tertini's first furniture shop in a Canberra basement was a far cry from the stylish, location-savvy Freedom and Fantastic stores to which he later put his name. However, he argues that location only becomes important once your business moves into the mainstream.
"When it is new and fresh people find it exciting," he says. “They will seek you out wherever you are.” The basement was cheap, but it gave Tertini an outlet to sell his stock. And, if you believe in the notion of business karma, that Canberra shop has been of inestimable value. Tertini recently ran into the son of the basement landlord:
"I met him and he said: 'You saved us from bankruptcy by taking that basement. We hadn't been able to lease it out for two years'. And I said: 'Funny enough, you started us in business, because no one would lease us a property, except you'." With the success of his first store, Tertini made a startling discovery, but one which would push him on to the path of expansion – he hated running a shop.
"I'm not a good store manager and I realised that by being in the store I would go crazy," he recalls.
"So I thought I've got to go and open a second store. I was in that and then I was really feeling penned in. That's how it evolved, because I thought I'm not a good store manager, so let me employ someone who is. I got a store manager who did a better job than me and I thought: 'Well what am I going to do? I may as well open a second, third, fourth store'. And then I found my own niche, which is not being trapped in one spot and that's the part I enjoy."
Although he tells the story with humour, it is also a parable for business disciples.
"I've said a lot of small businesses stay small because the owners think they're the only people who can do everything right, whereas I felt the opposite. I felt I'm the only one who can't do it right, so I'll employ people who can. That pushes you up and up and up."
The Freedom Furniture brand was born when Tertini teamed up with Sydney partners, including Peter Palan, who had opened similar stores. Tertini explains:
"We combined our advertising to save money and we actually had, at the bottom of our ads, four different trading names at one stage. It got to the point where we said, listen, we are either going to get together or we are going to fight it out because I'm going to open stores on the North Shore. So we said 'let's get together'."
Using their own money, Freedom was taken interstate and new stores popped up everywhere. Tertini had developed a remarkable passion for the furniture business. He read books about Ingvar Kamprad and Terence Conran, the respective founders of the giant Ikea and Habitat chains, and he had an innate sense for selecting great-looking furniture that people would buy at affordable prices.
However, as store costs began to hit $2 million for new Freedom outlets, the group looked to go public. Tough economic times were keeping investors away, but in 1991 stevedoring supremo Chris Corrigan and the Lang Corporation saw public listing potential down the line and bought Freedom out. Suddenly, Tertini had lots of money, but nothing to do.
After spending three weeks at the beach, he realised retirement was "not what it's cracked up to be". He puts it down to the migrant work ethic drilled into him by his parents, who were refugees from northern Italy after World War II.
Trying something new
A five-year no-compete clause led Tertini to open businesses as diverse as coffee shops, indoor climbing gyms and property development. But none of them captured his imagination.
"As soon as the five years was up, Fantastic (Furniture) came up as an opportunity and I said: 'You beauty, back to what I like and what I know'." Tertini felt the major players had been ignoring the budget end of the market inhabited by students, poorer families and young couples. As usual, his instincts proved right.
Listening to Tertini's tale it all seems so easy, yet he likens his success with that of Ian Thorpe. “Did he become a champion when he won his first gold medal or was he already a champion in the making when he was 12, 13, 14, getting up at 5am? So it's the cumulative result of a lot of small actions and decisions that lead you to that position.”
Tertini's position is one of financial comfort, yet it is the thrill of business success – not the cash – that motivates him. He loves the furniture business, and the people in it.
With a retailing empire at Fantastic Holdings that now employs more than 1400 staff nationally and revenue of more than $450 million (company owned and franchise stores) in the 2010 financial year, Tertini tries to put employees before structure.
It is an approach he recommends. “I think the mistake companies make is they try to negate human nature by controlling it, setting up a lot of systems that actually work against them, that stifle people. I learnt that very early working for the government where I felt stifled. It didn't mean I was incompetent, it just meant the system didn't allow me to work in the way I wanted to work and get good results."
No doubt Australian home decorators are pleased he voted no to Canberra's bureaucrats.