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Ep 97- Creating a Fierce Culture with Andy Weiner
Creating a Fierce Culture with Andy Weiner
In this episode of Building Texas Business Podcast, I talk with Andy Weiner, CEO and Founder of RockStep Capital, about how to build a fierce company culture that drives performance, accountability, and trust.
Andy shares the story of launching RockStep Capital after his family’s retail business and how he’s grown it into a real estate investment firm managing more than 9 million square feet across 11 states. We dive into his 25 “RockSteps,” the unique set of behaviors that guide his team and define their culture. From “Be Easy to Work With” to “Keep Family First,” Andy explains how rituals, accountability, and belief turn values into real business results.
We also discuss his “Hometown America” strategy for investing in smaller markets and how a vertically integrated structure keeps his company nimble, innovative, and focused on long-term growth.
If you’re passionate about leadership development, business culture, and the mindset behind building great teams, this episode offers practical lessons you can apply in your own organization.
Transcript
Transcripts are generated by machine learning, so typos may be present.
Chris Hanslik: In this episode you will meet Andy Wiener, CEO and founder of RockStep Capital. Andy explains how he has created what he describes as a fierce culture by having everyone in his company adhere to 25 Rock Steps. Andy, thanks for taking time to come on Building Texas Business.
Andy Weiner: Excited to be here, Chris.
Chris Hanslik: So looking forward to hearing your story. Let’s start by just telling everyone what it is your company does and what it’s known for.
Andy Weiner: RockStep Capital, we’ve been in business 28 years. We are a shopping center investment company. So we invest in shopping centers in what we call hometowns throughout the United States.
Andy Weiner: We’re in 11 states right now. We have built or acquired about 10 million square feet of shopping centers.
Chris Hanslik: Wow, okay. What was it that had you focus on shopping centers as a strategy?
Andy Weiner: My Family, my grandfather actually, started Wiener’s stores.
Chris Hanslik: Oh, sure.
Andy Weiner: I don’t know if you remember Wiener’s.
Chris Hanslik: Of [00:01:00] course.
Andy Weiner: We had 159 stores. I ran the operations for the company.
Chris Hanslik: Okay.
Andy Weiner: And so I learned about retail. I was in charge of the stores, in charge of real estate, finance systems, accounting, hr, and so I grew up in retail. Grew up in the family business. Then, we did a chapter 29.
Andy Weiner: Do you know what a chapter 29 is?
Chris Hanslik: I do not.
Andy Weiner: We did two elevens and a seven.
Chris Hanslik: Okay.
Chris Hanslik: That gives you a lot of experience.
Andy Weiner: We get a lot of experience. That’s one of lessons learned. And so I started doing shopping center investing in 1997 and have been doing it since then.
Chris Hanslik: Okay. Very good. So sounds like not only in RockStepStep capital, you were running a business well before that?
Andy Weiner: Yeah. But just in retail. I ran all the stores and I’ve been in thousands of stores and thousands of markets and thousands of shopping centers and so done a lot of that and really been out there [00:02:00] getting gritty with the markets and properties.
Chris Hanslik: Oh, very interesting. So in, 1997, I think you said?
Andy Weiner: Yeah.
Chris Hanslik: What was it that got you started to make that pivot into real estate investment?
Andy Weiner: I knew that I wanted to do something in real estate and my closest friend is a guy named Brad Schlosser.
Chris Hanslik: Okay.
Andy Weiner: And Brad was already in the business and he decided to partner with me for the first 3, 4, 5 years just to learn the business. And it was a learning experience.
Chris Hanslik: Sure.
Andy Weiner: I didn’t know that in shopping center development there’s no income for a year or two until you find and build something.
Andy Weiner: And I ended up starting with Walmart.
Chris Hanslik: Okay.
Andy Weiner: We ended up doing four Walmart deals in the Houston region. Big kind of power centers. One up north, three south. Walmart was one of the reasons why we went out of business at the family business. Yet they were our first client.
Chris Hanslik: There’s some irony there, right?
Andy Weiner: A lot of irony. They’re a great company. I [00:03:00] love Walmart. So we ended up doing these 30 to 100 acre projects where Walmart took a piece and we built a Kohl’s or Ross Vertical. We did ground leases, we did pads, put in the utilities. Pure development. And then I started doing business by accident in Navasota. I wanted to do a Walmart relocation in Navasota near College Station. And a company called Tractor Supply
Andy Weiner: was on the same side. So I started a relationship with Tractor Supply, the country’s largest farm and ranch store. They gave me an assignment of Southeast Texas and Southern Louisiana small towns.
Andy Weiner: And so I started working in these smaller communities and I found out great place to do business.
Chris Hanslik: Interesting. Yeah.
Andy Weiner: And I reoriented the geography of our business to be in secondary and tertiary markets, which we call home towns.
Chris Hanslik: Okay.
Andy Weiner: And our business is today centered on finding great shopping center investments in hometown America.
Andy Weiner: And we [00:04:00] named our fun hometown America.
Chris Hanslik: I love it. The thing that I love most about that is you identified a neglected market.
Andy Weiner: Yeah.
Chris Hanslik: And built a business around it. Where there’s absolutely demand, I would think, and a need for newer shopping and retail centers.
Chris Hanslik: So, you go into real estate investment and then you identify this unique opportunity. How have you then built the company to support your goals and your vision for the company?
Andy Weiner: Sure. So we started in these hometowns and then the GFC, the great financial crash of 2008 came, and that was a pivot as well.
Andy Weiner: So we decided that buying existing shopping centers in small towns was a good business because #1, you couldn’t get new construction, couldn’t get a loan right? Couldn’t get a loan, couldn’t get a new construction done. And so we started in Vicksburg, Mississippi.
Chris Hanslik: Okay.
Andy Weiner: Second biggest battle in [00:05:00] the Civil War. The Battle of Vicksburg, July 4th, 1863.
Andy Weiner: And we bought an empty Kroger. We bought an empty a mall next to it from CBL.
Chris Hanslik: Okay.
Andy Weiner: We bought two properties at the same time. TJ Maxx was wanting to go in one of the two. We bought ’em both.
Chris Hanslik: Okay.
Andy Weiner: And we decided that we were gonna need equity and we started raising equity with a strategy. When we go into a hometown, we do two things.
Andy Weiner: We get local investors to be part of the equity alongside my equity and our other investor equity. And then we’ll get a local lender. A community bank lender that has a heart and a feel for the community to be that lender. And we’ve replicated that around the United States.
Andy Weiner: We’re the only one in the country to really focus on a strategy of community tie in.
Chris Hanslik: Yeah.
Andy Weiner: So you’re getting low. You’re not the big outsider carpet bagger coming in. Look, we know how to run a shopping center. We know how to underwrite it. We know how to do [00:06:00] property management leasing, but there are aspects that affect how a shopping center performs that are community based incentives.
Andy Weiner: Entitlements property taxes. Our investors are on the board of community college or the hospital district. So they’re effectively deputized leasing agents for alternative uses. They know what’s going on.
Chris Hanslik: Yeah.
Andy Weiner: They know what’s going on and and they have a financial interest to absolutely lease it up.
Andy Weiner: And we’re about to open a $50 million hockey arena in one of our shopping centers in Wisconsin. We’re gonna the opening next week. And one of our investors was instrumental in helping get the shopping center at our location.
Chris Hanslik: Wow, okay.
Andy Weiner: One of our local investors helps with property taxes.
Andy Weiner: It’s a lot of fun. You build a great network. They want to invest locally in an asset that’s important to the community with an institutional type of operation.
Chris Hanslik: Yeah.
Chris Hanslik: And again, the connections you’re making I can imagine bring you other [00:07:00] opportunities that might exist within the community.
Chris Hanslik: Absolutely.
Chris Hanslik: So, you don’t do it yourself. I assume you’ve built a team out to help with analytics, prospecting?
Andy Weiner: So we’re vertically integrated. We have everything in house. We have acquisitions, analysis, financial analysts. We have our own accounting finance.
Andy Weiner: Leasing, property management, construction management. We have about a hundred employees.
Chris Hanslik: Wow. Okay.
Andy Weiner: And currently we’re operating, as I said, in 11 states, based here in Houston. We’re based here in Houston, but our employees live all around the country. We did remote before COVID.
Chris Hanslik: Okay. Yeah.
Andy Weiner: And we have a very fierce culture.
Chris Hanslik: And what makes you use such a charged word? I love it, by the way.
Andy Weiner: It’s fierce.
Chris Hanslik: Yeah. What causes you to use that word in describing your culture?
Andy Weiner: Here we go. You ready?
Chris Hanslik: I’m ready.
Andy Weiner: So I have to start with the word Rock Step.
Chris Hanslik: Okay.
Andy Weiner: Rock Step is not a word in the dictionary, [00:08:00] but it is a dance move.
Chris Hanslik: Okay.
Andy Weiner: Okay. If you know what swing dancing is or ballroom dancing, you Rock Step. Step on count seven and eight. When you switch direct, I’m gonna do it for you. Is that okay?
Chris Hanslik: Yeah, I dunno if our screen’s gonna be big enough.
Andy Weiner: I’m gonna be low. 1, 2, 3. 1, 2, 3. Rock Step like ball pivot chain.
Chris Hanslik: Okay.
Andy Weiner: So at your wedding, if you were ballroom dancing, you were Rock Stepping on count seven and eight. So we use the RockStep step as a metaphor. For being nimble, being responsive, listening to the music in the industry. And so at our company, Chris, we use it as a verb. “Hey, we got an opportunity.
Andy Weiner: We need a Rock Step. We got a problem, we gotta Rock Step guys”. And so everybody at the company, everyone in my family, we use it. We use it as a verb to RockStep, to be able to switch directions quickly, be responsive. Second, I wrote a list of 25 [00:09:00] behaviors, specific behaviors that I am passionate to the mat about.
Chris Hanslik: And we call these behaviors core values.
Andy Weiner: No, you failed. We call them RockSteps.
Chris Hanslik: Okay. RockSteps. Okay.
Andy Weiner: You completely blew Chris. Okay? you didn’t do your homework. Didn’t do your homework. So we have a Rock Step of the week. Every 25 weeks we have a ritual where all hundred people get on a teams call at 10 o’clock on Monday and we talk about the Rock Step of the week.
Andy Weiner: Here’s a list of them all. We’re RockStep number 12: be easy to work with.
Chris Hanslik: Easy to work with.
Andy Weiner: And so at 10 o’clock this week, I love this, somebody wrote an essay. One of our employees wrote an essay. They get up and they talk about what does it mean personally, professionally, to be easy to work with.
Andy Weiner: And then we call at random two or three other people. “Hey Chris, what does it mean for you to be easy to work with? When have you been in an environment where you’ve been around people who haven’t been easy to work with?” [00:10:00] And it’s the ritual and language we use. Next week is Rock Step 13: bring it every day.
Andy Weiner: What does it mean, Chris, to bring it every day in your personal life and your professional life? If you were gonna interview at RockStep, you have to come to the interview, what are your favorite three and why? What are your most challenging three and why? To come to RockStep, you better be good at what you do.
Andy Weiner: Leasing, property management, accounting, whatever. To stay at RockStep, you gotta follow these.
Chris Hanslik: Yeah.
Andy Weiner: Okay. And so I’ll go through mine, my favorite three and my most challenging three. is that okay?
Chris Hanslik: Absolutely.
Andy Weiner: Great. RockStep number one. Go take a look. It’s one of my favorites: do the right thing.
Andy Weiner: We’re in the investment business. It’s a world of gray.
Chris Hanslik: That’s what it is, yeah.
Andy Weiner: You gotta figure it out. You gotta clean up that world of gray. RockStep number three: be punctual. On time is five minutes early and if you’re on time, you’re late.
Andy Weiner: It’s about courtesy RockStep. Step 24: keep family first.
Chris Hanslik: Amen.
Andy Weiner: You have to take care of your health. You have to take care of [00:11:00] your family before you take care of RockStep. The most challenging RockStep, step number four: be a fanatic about response time. A little hard to keep up.
Chris Hanslik: Yeah.
Andy Weiner: Sitting here, I’m not responding to emails, right?
Chris Hanslik: You’re pulled a bunch of different ways.
Andy Weiner: Pulled a bunch of different ways. It’s a challenge. RockStep seven: listen generously. My wife, Meredith, would confirm that I have issues here. I’m impatient. I’m thinking sometimes when you’re talking about what I wanna say.
Chris Hanslik: Sure. Natural.
Andy Weiner: I do think women probably listen better than men. RockStep 25: keep things fun.
Chris Hanslik: Okay.
Andy Weiner: So Meredith, my wife, would say “Andy, you take the fun out of fun.” So I will tell you I’m very serious. Very serious. I’m very happy on the inside. Chris, just want you to know that.
Chris Hanslik: I believe that.
Andy Weiner: Okay, and Meredith is very happy on the outside. She’s a little bit nervous on the inside. We balance each other out. I will tell you that anyone that will stand up in a podcast and do a RockStep dance move is fun. you tell her that.
Chris Hanslik: [00:12:00] We tell her that next time
Chris Hanslik: I see her. Absolutely.
Andy Weiner: Anyway, I wanted to go into that because we have people from Blackstone, Brook Field, CBL, some of the big institutional real estate companies. And I believe that one of the reasons they come and one of the reasons they stay is because we take this stuff seriously.
Andy Weiner: We’re not perfect. People can hold us accountable, but it’s how we build trust. It’s how we resolve conflict. It’s how we want to become the best performing team we can be. And we want to ritualize it. We want to use the language, we want to challenge each other. We wanna hold each other accountable to specific behaviors.
Andy Weiner: And I wrote every one of these, and I go to the mat.
Chris Hanslik: I’ll tell you, I love the conversation of culture. I’ve heard some great stories about culture, certainly in the 90 plus episodes I’ve done in this podcast. But just in general conversations, yours just went to the top of the list by a long shot.
Chris Hanslik: This is remarkable stuff.
Andy Weiner: Yes. Thank you.
Chris Hanslik: I knew when you [00:13:00] used the word fierce, it was gonna be good. You don’t use that word if you can’t back it up, but these 25 RockStep steps and how you use them every week and focus everyone is remarkable. It is just really fascinating.
Chris Hanslik: I can’t wait to read these more.
Andy Weiner: You need to look at them. Tell me your favorite three and your most challenging three. You don’t have to, but that’d be good if you could.
Chris Hanslik: Okay. Yes. And then what you said in there that I wanna make sure we go back to, because I think it’s so important in building good company, is that
Chris Hanslik: you hire from your cultural foundations and you, I would assume, fire from them?
Andy Weiner: Absolutely. Now, the challenge is that you can’t sort for that when you hire, right? All of us know that. You try to ask the right questions. You try to do the test. The reality is, until you live with someone, you really don’t know what they’re like.
Andy Weiner: That’s the truth.
Chris Hanslik: That’s the truth other than the obvious. Some come in and you’re like, [00:14:00] this isn’t going anywhere. wait.
Andy Weiner: Yeah. but if they check the boxes on their skillset
Chris Hanslik: Yeah.
Andy Weiner: And they talk the talk here, and you do your research and you do your reference check, you still never know.
Chris Hanslik: That’s right.
Andy Weiner: You don’t know. I tell people the hiring process is more art than science.
Chris Hanslik: Yeah.
Andy Weiner: And you won’t know until you get the person in your environment you don’t know.
Chris Hanslik: Correct.
Andy Weiner: And in a position where there’s some stress.
Chris Hanslik: Correct.
Chris Hanslik: So this could not have happened overnight, Did this develop over a period of time?
Andy Weiner: I made a list with our executive team of behaviors that create excellence. That create a top performing employee. We just put on the board a hundred ideas.
Chris Hanslik: Yeah.
Andy Weiner: And then narrowed it down to the 25 that meant most to me. In other words, it’s mine.
Chris Hanslik: Yeah.
Andy Weiner: Yeah. Things [00:15:00] that I am passionate about, things I will go to the mat on, and then I wrote out the wording. The words are important.
Chris Hanslik: Yeah.
Andy Weiner: And at 10 o’clock somebody reads the exact words out loud to everybody, the two or three sentences, and then they summarize their essay.
Chris Hanslik: Yeah.
Andy Weiner: And the essay has to be something personal, not AI, although some people use AI, right?
Andy Weiner: But it’s gotta be something personal about them and their personal lives and in their personal lives as it relates to their professional life as well.
Chris Hanslik: Amazing. So love it all. and I can’t wait to read them more as I said. Shifting gears a little bit, your roots are in Texas?
Andy Weiner: Yes.
Chris Hanslik: I’d be curious to know how you perceive being able to be in Texas to start this business and then grow from there, has benefited you and the company?
Andy Weiner: Sure, so let’s talk about Houston and talk about Texas. We should all be grateful that we live in [00:16:00] Texas and that we live in Houston.
Chris Hanslik: Yeah, for sure.
Andy Weiner: My business takes me all around the country. I visit markets, our investors are throughout the country. I visit and think back, what a great city we have.
Andy Weiner: What a great place we have. What a spirit of community, a spirit of business, quality of life. The ability to go to the movie theater without blowing your brains out.
Chris Hanslik: Yeah.
Andy Weiner: You can run to the cleaners. The grocery stores are accessible. The basics of life are really good here and people are friendly.
Andy Weiner: People want you to succeed. It’s a good place for a family. It’s a good place for business. Houston’s reputation is not known as a pretty city. It’s basically a rentention pond, that’s what it is. It collects water.
Chris Hanslik: Okay.
Chris Hanslik: But in terms of quality of life, it’s outstanding. And I do think our developers in Houston, we’re blessed to have so many good real estate developers.
Chris Hanslik: City [00:17:00] leaders and philanthropic leaders are changing that about Houston not being pretty. The national narrative may still be there.
Andy Weiner: But it doesn’t have topography.
Chris Hanslik: True.
Andy Weiner: It doesn’t have topography,
Chris Hanslik: But we’re making it more urban and livable.
Andy Weiner: Yes, absolutely.
Andy Weiner: Which I think benefits all of us.
Chris Hanslik: Correct. But I totally agree with your point about city of opportunity and diverse in so many ways, however you want to use that word.
Andy Weiner: Correct.
Chris Hanslik: Attracts business and then I think helps businesses here grow.
Andy Weiner: Correct.
Chris Hanslik: So it’s interesting to get your perspective. You were talking I guess about all those things being in the retail investment world that create opportunity for you.
Andy Weiner: Correct. Now what’s interesting is we don’t invest in Houston because we’re small town guys.
Chris Hanslik: Yeah.
Andy Weiner: So we’ll invest throughout Texas. Not in Dallas. Okay. So we’re basically a red state company or a red county [00:18:00] in a purple or blue state. We are hometowns. Hometowns are not Atlanta, San Francisco, Los Angeles, New York, Chicago, Houston.
Andy Weiner: Those aren’t our definition of hometowns. Hometowns are smaller than a million. They could be as small as a hundred, 200,000.
Chris Hanslik: Sure.
Andy Weiner: But they have to have something that drives population growth. That’s our criteria.
Chris Hanslik: Okay.
Andy Weiner: You have to have an essential driver. So you have to have either tourism or Fortune 1000 companies or great hospital districts or military government facilities or major universities.
Chris Hanslik: Yeah.
Andy Weiner: Or some combination.
Chris Hanslik: Yeah.
Andy Weiner: Some combination that drives population growth.
Chris Hanslik: So you get this going and, you talked about the fierce culture. How do you go day to day in maintaining that culture and keeping it alive? [00:19:00]
Andy Weiner: I think you have to talk about it a lot. You have to repeat a lot.
Andy Weiner: You have to create rituals and you have to believe it. Believe it deep.
Chris Hanslik: Yeah.
Andy Weiner: In your heart and your gut, you gotta really believe it.
Chris Hanslik: Yeah. Love that. Okay. Move to a different topic.
Andy Weiner: Sure.
Chris Hanslik: Always like to talk about innovation.
Andy Weiner: Okay.
Chris Hanslik: How are you at RockStep step incorporating technology and innovation to make you more efficient?
Chris Hanslik: And if, usually efficiencies, create more profit, what are some of the things you think you’ve implemented over the years to help you accomplish that?
Andy Weiner: Innovation. There’s a lot of places for it, but I’ll mention a couple. We have switched from a syndication model to a fund model, and that’s a big change in real [00:20:00] estate.
Chris Hanslik: Yeah.
Andy Weiner: So a syndication model is: find an opportunity in investment, stop, raise your X dollars, spending 4, 6, 8 weeks, just extreme focus.
Chris Hanslik: Sure.
Andy Weiner: And then move on. To the next deal, six months down the road, stop, that kind of thing. A fund is a different structure, and the reason why we have a fund is that in our business, in our sub-sector, we operate in grocery, open air, and enclosed malls, which is the Wild West, a lot of distressed assets.
Andy Weiner: The sellers of distressed assets will not allow you to win the bid. Unless you have committed capital and a fund structure, you don’t have time to wait. That pause, they’re gonna say “yeah, I’ll pay you $25 million and I’m gonna syndicate the deal.” They’re gonna say ‘no, you’re not gonna get the deal.”
Andy Weiner: So we’re moving to a fund structure, which means that you have to have a process of [00:21:00] continually reaching out to investors, communicating to investors. We have a CRM. We have things that other companies don’t, and we’re a shopping center company, so now we’re becoming a sales and marketing company to have continual fundraising into a fund because traditionally in real estate, people’s pipeline, people’s opportunities outpace their ability to raise the equity.
Andy Weiner: And so now we’re restructuring so that our fund can outpace the opportunities out on the acquisition. Make sense?
Chris Hanslik: Yeah. So that’s one. I like that.
Andy Weiner: Okay. And the second is we operate again in this area of insolvency, in closed malls.
Chris Hanslik: Okay.
Andy Weiner: Okay. Which is the wild West. And we’ve had to learn how do you deal
Andy Weiner: with this opportunity, and we’ve had to learn different [00:22:00] ways of managing these properties profitably. And so do you know what a cap rate is?
Chris Hanslik: Yes. A cap rate.
Andy Weiner: So cap rate for shopping centers, yield on cost is typically six, seven, 8%. In the enclosed mall sector, cap rates are 15%.
Chris Hanslik: Big difference.
Andy Weiner: So big difference.
Andy Weiner: And so there are very high cash flow properties, but very complex.
Chris Hanslik: Yeah.
Andy Weiner: There’s lots of opportunities with them. And so we’ve learned that some malls are great cash flow plays. Some malls, you shrink the amount of retail and you do something else. You redevelop them. Some malls, you sell off the periphery at an arbitrage.
Andy Weiner: Okay? Buy something for 15 cap, sell a restaurant in front for five cap. So in other words, there’s a difference. We had to learn how you can create value. Depending upon the market, the tenancy, the physical asset, et cetera.
Chris Hanslik: Makes sense though. Each market’s [00:23:00] different.
Andy Weiner: Yeah.
Chris Hanslik: And you’ve gotta get in and roll up your sleeves to figure out.
Andy Weiner: Yeah.
Chris Hanslik: What that difference is and what’s gonna make it work.
Andy Weiner: And what’s happened in real estate in the last three years in particular is that the rise of interest rates has just changed the whole structure of commercial real estate.
Chris Hanslik: Sure it has.
Andy Weiner: Yeah. And most people who’ve invested in real estate have invested some in office, but primarily in multifamily.
Chris Hanslik: Okay.
Andy Weiner: And then to a lesser extent, industrial. So of the four asset classes, multifamily is number one, industrial is number two. Office used to be next to it.
Chris Hanslik: Sure.
Andy Weiner: And then retail was dead last.
Chris Hanslik: Okay.
Andy Weiner: So what’s happened is interest rates have put a squeeze on multifamily and industrial and the retail sector. The shopping center sector is the place for yield today because you have positive leverage.
Andy Weiner: Positive leverage means your cap rate is higher than the interest rate on your debt, and sometimes significantly higher.
Chris Hanslik: [00:24:00] Yeah.
Andy Weiner: So you get yield straight out of the box. That’s great. No pun intended.
Chris Hanslik: Yeah. But a lot of people, You hear a lot of people stay away from retail. Although, I just recently was reading, going back to Houston, I think it was Lee and Associates,
Andy Weiner: Okay.
Chris Hanslik: Reported that Houston was the number two city for retail construction right now. With almost 4 million square feet under construction.
Andy Weiner: It’s starting to come back a little bit.
Chris Hanslik: Yeah.
Andy Weiner: But generally what’s happened in retail is that Amazon and COVID killed the weak guys.
Chris Hanslik: Yeah.
Andy Weiner: And those that survived, they have their own e-commerce strategy.
Andy Weiner: They’re able to compete and hold market share and grow market share against Amazon. And they got a great balance sheet. And so they’re telling Wall Street, we want 50 new stores this year, 200 new stores. But except for places like Houston, a little bit generally there’s very little new retail construction around the country.
Chris Hanslik: Yeah.
Andy Weiner: So that’s why retail has been [00:25:00] more in favor. I was on a panel yesterday up in New York with the head of Wafra, which is the Emirate Sovereign Fund. Big dogs, they’re betting big in our sector really because of those issues.
Chris Hanslik: Yeah. So let’s talk about what are some of the challenges for your business given the economics that are out there?
Chris Hanslik: The economic trends that are going on. What are you seeing that you’re gonna have to navigate through?
Andy Weiner: Right now we’ve got a lot. I mean we have a lot. We see a lot of opportunity in what we do, which is hometowns.
Chris Hanslik: Yeah, okay.
Andy Weiner: There’s opportunities to buy assets that produce the kind of returns we’re looking for our investors.
Andy Weiner: I think the challenge is always construction costs. Will tariffs make construction materials even more expensive? Sure. Okay. Will [00:26:00] tariffs create more inflation and slow down retail? Retail sales? So retail sales, the last three years have gone up about this level. But the actual unit sales have stayed flat.
Andy Weiner: So because inflation of goods, the consumer is stressed.
Chris Hanslik: Yep. Hard.
Andy Weiner: It’s hard to believe there’s not a recession. The signals out there that we’re hearing and we’re seeing our touchpoints show stress in the consumer.
Chris Hanslik: Yeah.
Andy Weiner: And somebody making $50, $60,000 a year
Andy Weiner: paying more for whatever at the grocery store is a real issue.
Chris Hanslik: It’s a real issue. Less, discretionary spending, which can impact retail.
Andy Weiner: Yeah.
Chris Hanslik: Yeah. Interesting. There’s definitely, as you said, all the elements of a recession around, yet we don’t seem to find ourselves in one.
Andy Weiner: The stock market doesn’t say it. So it’s somewhat baffling,. And we’re [00:27:00] not betting interest rates are gonna go down.
Chris Hanslik: Certainly not dramatically.
Andy Weiner: And there’s a lot of political hockey going on around that too.
Chris Hanslik: Absolutely. Let’s chat a little bit about just leadership in general and maybe, lessons learned. I believe strongly and we can learn a lot along the journey, but it’s usually some of the mistakes we made where we learn our biggest lessons. Anything that you can think of in kind of that in starting RockStep?
Andy Weiner: Sure.
Chris Hanslik: Could share that?
Andy Weiner: Yeah.
Chris Hanslik: Tell us that story.
Andy Weiner: I think one of the biggest lessons I’ve learned in life is that you cannot live without consequences. In our family business Weiner’s stores, we had two parts of the business. One part had a strategy of dealing with inventory that wasn’t effective [00:28:00] and it produced paper gains but sent signals to our customer that were negative and we weren’t operating effective enough in terms of inventory management.
Andy Weiner: Inventory, stretch inventory is retail. That’s what it’s about.
Chris Hanslik: Sure.
Andy Weiner: That’s what it’s about. And as a result, we couldn’t compete with Walmart. Even if we were perfect, we might not have been able to compete with Walmart. But we were heading down and we couldn’t correct the strategy. So if there are things happening in your life and in your business that are negative,
Andy Weiner: you can’t live without the consequences. They’re gonna happen. It’s a fact.
Chris Hanslik: Yes.
Andy Weiner: It’s a fact.
Chris Hanslik: Life’s about consequences. We make choices. It is a fact. Not all consequences are bad, right?
Andy Weiner: Correct.
Chris Hanslik: But you just have to know there’s gonna be a consequence. It’s a fact. [00:29:00] I think one of the things that as a leader you have to learn, and maybe that goes back to the Weiner’s story, is if that strategy or decision is starting to create negative consequences
Chris Hanslik: how do you adjust shift? Make the shift.
Andy Weiner: You try. Try to correct it, and if you have a roadblock that you cannot overcome, you’re stuck.
Chris Hanslik: Yep. You’re stuck. You either have to exit or you go down with everybody. I guess in the retail world that your family business was in that’s what happened with big box retail coming in.
Andy Weiner: Yeah. There are certain strategies of pricing in retail: there’s two strategies. There’s what is called high low and there’s everyday low pricing. High low is market high and then promote it aggressively every weekend to get people to come in. Kroger, Kohl’s, JCPenny’s market high drive traffic through promotion.
Andy Weiner: The other way is everyday low pricing. Walmart, HEB. [00:30:00] Neiman Marcus Sak’s. That’s everyday low pricing. They don’t run promotions to drive traffic. And what’s happened in clothing retail is that there is a winning strategy that has won. And that’s the off price strategy. So the TJ Maxx, they have different divisions.
Andy Weiner: Ross, Nordstrom Rack. This 20,000 square foot store collection of off price goods has a markup that is pretty standard. It has a markdown cadence that’s very refined, and as a result, they can turn their merchandise five, six times a year. Our company was turning our merchandise twice a year.
Chris Hanslik: Oh, okay. Yeah.
Andy Weiner: And TJ Maxx can do $10 or $12 million in a store 20,000 feet next to a Dillard’s or a Macy’s of a hundred thousand, 120,000 feet, doing the same volume in [00:31:00] capital, a capital structure inside a box that takes very little money to keep it fresh. Five or 10 or 15 years from now, a Dillard’s or a Macy’s might need $5-$10 million of refresh dollars for new carpet.
Andy Weiner: Just a refresh and there’s not enough profit to keep the store refreshed.
Chris Hanslik: Yeah.
Andy Weiner: And so over time, the lower volume department stores go out of business.
Chris Hanslik: Yeah.
Andy Weiner: That’s what happens. That’s what you’re seeing.
Chris Hanslik: For sure. What advice would you give to entrepreneurs out there now, or maybe an aspiring entrepreneur?
Chris Hanslik: Encourage them, but maybe give them caution of if, you were gonna do it again, what are the one or two things that you would say, “here’s my words of wisdom.”
Andy Weiner: In terms of business, words of wisdom?
Chris Hanslik: I would say, let’s say business words and maybe in the context of inspiration too.
Chris Hanslik: Do it, [00:32:00] but just be aware that this could be around the corner or how to be ready for that.
Andy Weiner: I’m not exactly sure how to answer that, but I will tell you that the advice I give is you’ve gotta be gritty, you’ve got to dig in. You’ve gotta work harder than other people, gotta show up earlier.
Andy Weiner: You’ve got to work later and you’ve got to work hard, especially when no one’s looking. Especially when no one’s looking.
Chris Hanslik: Yeah.
Andy Weiner: Okay. And that I can tell who’s gritty and who’s not. You can tell. You can tell.
Chris Hanslik: Yeah, I know you can. Okay. Yeah.
Andy Weiner: And so having this passion might not be the right word, but this habit.
Andy Weiner: Giving all learning as much as you can [00:33:00] is how you succeed in whatever you’re gonna do.
Chris Hanslik: Yeah. Okay.
Andy Weiner: The second thing I would tell you is I try this. Am I perfect? No. But I want Act two to be more important than Act one.
Chris Hanslik: Okay.
Andy Weiner: Okay. In a play, act two is always more important than act one. That’s where the things happen, right?
Andy Weiner: And even though I give a lot of energy and passion at the workday, when I get home that is my act two. And Act two is more important in my life. There is nothing more important to me than Meredith. And I need to have the energy and focus and commitment to make sure in my life and everybody’s life
Andy Weiner: act two is always more important than act one.
Chris Hanslik: That’s great stuff, Andy. I really like that. thank you for sharing that.
Andy Weiner: Sure.
Chris Hanslik: And so you know now before we wrap up, just a couple light questions.
Andy Weiner: Sure.
Chris Hanslik: What do [00:34:00] you do to decompress, recharge so that you can bring that energy and passion?
Andy Weiner: Look, I love the Astros.
Andy Weiner: I love to watch TV with Meredith and watch our shows. I will tell you that I have a little bit quirkiness related to Chick-fil-A, if I could share that.
Chris Hanslik: Okay. Yeah.
Andy Weiner: Okay. So you know of nobody that eats Chick-fil-A more than me. For breakfast, six days a week, lunch seven days a week, part of dinner four days a week.
Andy Weiner: I have Chick-fil-A. I brought it here. It’s in the fridge.
Chris Hanslik: Okay.
Andy Weiner: Yeah. Okay. I had it for lunch. I had it for breakfast. And I’m having it for dinner every day. Six days a week for breakfast, seven for lunch, and four for dinner. And I am a Chick-fil-A one member.
Chris Hanslik: Okay.
Chris Hanslik: I didn’t know that existed.
Andy Weiner: I got invited to it about a year and a half agp. I’ve been invited to their headquarters for a tour. Meredith and I are going there in three weeks to tour their headquarters in Atlanta, and I have a Chick-fil-A Diet. [00:35:00]
Chris Hanslik: So do you go to the same Chick-fil-A Almost?
Andy Weiner: I go to 31 84.
Chris Hanslik: Okay.
Andy Weiner: 31 84. It’s by my office in the Heights. They do 220 cars an hour through the drive through. They’re building a third drive through. They’ll do 300 cars an hour. I know their volume, I know their average ticket sales. They are a machine
Chris Hanslik: And they know you.
Andy Weiner: They do. Yes.
Chris Hanslik: Yes. Okay. But then the big, maybe the biggest question that I have, and anyone listening is, how do you do lunch seven days a week when they’re closed on Sunday?
Andy Weiner: I go there Saturday morning and I buy two salads. I put one in the fridge for Sunday.
Chris Hanslik: Okay.
Andy Weiner: By the way, it’s quirky. It’s a little bit bizarre.
Chris Hanslik: It is bizarre. Do you always order the same thing?
Andy Weiner: Exactly.
Chris Hanslik: Okay.
Andy Weiner: It’s just habit. I’m into habit.
Chris Hanslik: Okay. Apparently, because that one takes the cake.
Andy Weiner: It’s bizarre.
Chris Hanslik: It is bizarre. Okay. The last question I wanna ask I’ve asked every guest on the podcast. Do you prefer Tex-Mex or Barbecue?
Andy Weiner: I would say TexMex. El [00:36:00] Tiempo probably is my favorite.
Chris Hanslik: So one of those three dinners, that’s not TexMex.
Andy Weiner: No, but again, when I said dinner four days a week.
Chris Hanslik: You left three.
Andy Weiner: Friday, Saturday, Sunday. That’s right. I’m, bad. I’m bad. Bad. Okay.
Chris Hanslik: So you gotta be somewhere.
Andy Weiner: Gotta be somewhere.
Chris Hanslik: So that’s great.
Chris Hanslik: Andy, thank you so much
Andy Weiner: Sure.
Chris Hanslik: For sharing your story. That story of RockStep step. Such a unique story and I will always remember the fierce culture.
Andy Weiner: All right.
Andy Weiner: All right. You gotta remember the RockSteps.
Chris Hanslik: I’m going to do that as well.
Andy Weiner: So thanks again. Thanks, Chris.Chris Hanslik: Thank you. That’s it for this episode of Building Texas Business. Don’t forget to check out the show notes at boyer miller.com/podcast for insights and resources from today’s conversation. Learn more about how Boyer Miller can help your business grow at boyermiller.com. Thanks for listening, and we’ll see you next time.