NewBath: A New Orleans Firm Built on Determination and Resolve

NewBath CEO Larry Closs

Amidst constant chatter of American decline, political dysfunction, and economic malaise, one might think that firms across the country are waving a collective white flag of surrender to the wave of success from East Asia. Against all odds and despite all statistics describing the contrary, however, individuals and firms across the country have refused to give in to a narrative that misses the forest for the trees. Whatever happens externally, America, at its best, allows individuals to achieve their own goals and shape their own destinies.

Although all 661 individual firms on the Inner City 100 list have navigated recent crises admirably, one firm stood out for both its values and its grit. NewBath, ranking number 14 on the 2011 Inner City 100 list, presents a quintessentially American story of struggle and renewal.

Based out of New Orleans, Louisiana, this seemingly modest bathroom remodeling firm has grown at an annual rate of nearly 87% over the last 5 years. Ostensibly ordinary in its business, the firm has nevertheless been extraordinary in its commitment to success.

Like many entrepreneurs, CEO Larry Closs knew little about tubliners when he embarked to earn a living around their installation in people’s homes. What he did see was an opportunity to work near his home in downtown New Orleans and a large potential market for his product. Confident and optimistic, he opened his first warehouse near his home in late 2002. With cheap public transportation in the middle of an industrial cluster, he thought he had been granted a formidable advantage in his inner city location…

Until Hurricane Katrina hit.

Seven and a half feet of water flooded his warehouse, destroyed his entire stock and forced him to re-evaluate his company’s future.

Undaunted, Closs forged ahead, re-launching a new warehouse 50 yards away from the old one as a monument to his company’s determination. Fighting off insurance companies, a diminished labor supply, and a general loss of economic vitality in New Orleans after the storm, NewBath refocused its product line and now sells a broad range of bath remodeling services beyond the tubliners on which it started. To further hedge against geographic risk, the firm has diversified its consumer base to Houston, Texas. The company even saw a growth in revenue between 2008 and 2009 in spite of the credit crunch. NewBath is an exemplar of the idea that firms need not be in perceived ‘high-growth industries’ (i.e. biotechnology or cloud computing) to provide high returns and lasting value.

After the Inner City 100 list was published last year, Closs was offered an investment by venture capitalists to further grow his business. Access to capital was unimaginable to the firm that once had to rebuild from rubble. Closs credits his success to the customer loyalty engendered by sticking with an urban community at its lowest point. As Closs himself said,“Businesses in the district have driven the rebuilding of the area after Katrina – much more than the city itself. I rebuilt my warehouse across the street because I’m committed to the city of New Orleans.”

While other countries can peg away at our measurable advantages, the intangible values that have always undergirded commerce – trust, decency, and continuity – continue to be enduring sources of American strength.

Do you know of any firms like NewBath that are located within an urban area and growing in spite of the odds?  Nominate them for the 2012 Inner City 100 for recognition in Fortune as well as a year-round, cost-free management education offering that includes a day at Harvard Business School, access to ICIC’s CEO Series Webinars and a network filled with other CEOs of fast-growing firms.   

BY Sathya Vijayakumar on September 26th, 2011

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