JD Ewing, CEO of COE Distributing, has one of the more unusual origin stories in wholesale distribution: he built the company his grandmother founded to $21 million in revenue, sold it in a roll-up acquisition, and then watched the acquiring entity go bankrupt. Ewing and his wife/business partner, Melanie, bought the business back through bankruptcy court, growing it past $100 million before recently converting it to 100 percent employee ownership.
On a recent episode of the Driven by DCKAP podcast, Ewing sat down with host Karthik Chidambaram to walk through the full arc of that journey: the decision to restart instead of walk away, the COVID pivot that saved the company during its worst stretch, and why he chose an ESOP over a private equity exit when it came time to think about succession.
Podcast Highlights
Restarting After Bankruptcy Meant Deciding What Kind of Company to Build the Second Time
When COE Distributing came back out of bankruptcy court in January 2010, Ewing and Melanie had a choice about how to run it. Going from 75 employees to 16 and starting over gave them the chance to be deliberate about culture in a way that a growing company rarely gets. A book he came across about five years into that rebuild changed the direction: “Becoming Your Best: The 12 Principles of Highly Successful Leaders” by Steven Shallenberger.
“We thought we were putting employees first, but we really weren’t putting them as out in front as we possibly could. That book changed the way we interacted with our employees and really grew our culture. The employees have to be at the center, growing as individuals, as well as part of the team,” said Ewing. Every new employee now receives a handwritten note from him tucked into a copy of the book, and first-year hires go through a 12-week book club reading it chapter by chapter with the rest of the team.
The COVID Pivot Kept the Company Alive and the Team Intact
COE entered 2020 up 39 percent over an already-record year. By April, revenue was down 75 percent. No one was going into offices, and offices are what COE sells furniture for. The decision Ewing made in the first weeks was to hold the team together regardless, and then find something to sell in the meantime. He landed on plexiglass sneeze guards, sourced through connections from the NAW, and they became a lifeline.
“All 1,500 to 2,000 customers at the time were in the same situation. Our goal was, what can we do to be important to them and keep their business running? Same thing we were trying to do: keep our employees engaged and paid. And that was a really critical pivot,” Ewing said.
COE’s third quarter of 2020 became its best quarter ever. The relationships sustained through that period also meant the company was top of mind for customers when the office refurbishment wave eventually came.
The ESOP Was the Only Exit That Preserved What They Had Built
When JD and Melanie started thinking about the next chapter, three of their four kids had built careers outside the business. He ran a parallel process: evaluating private equity and strategic buyers through an investment bank while simultaneously exploring an ESOP with outside advisors. The comparison was not close.
“ESOP was the clear choice for me. It’s the right thing to do for the business, for the business continuity piece of it. With private equity, everybody knows something changes. We wanted to preserve the culture and make sure the business was continuing to operate on the same values and with the same leadership. We were able to achieve that with the ESOP,” said Ewing.
Fourteen months in, the same management team is running the same company, and the weekly leadership calls have shifted in character: people are asking why money is being spent a certain way, whether there is a better ROI on a decision, because now they own the outcome.
More Information
- For more details, visit the Driven Podcast portal or tune in on YouTube or Spotify
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About the Driven by DCKAP Podcast
The Driven by DCKAP Podcast is an audio and video show that explores B2B leaders’ stories, digital journeys, and insights on trends in distribution and manufacturing. The podcast is hosted by Karthik Chidambaram, Founder & CEO of DCKAP, who grew the company from a startup to a global team of more than 200 employees. Follow Driven by DCKAP Podcast on YouTube or LinkedIn.
About DCKAP
DCKAP is a leader in digital solutions that help distributors’ systems talk to each other. Its technology simplifies software integrations, e-commerce, and product information management for B2B companies. DCKAP’s flagship product, DCKAP Integrator, helps distributors and manufacturers automate data between ERP, e-commerce, and CRM systems. Founded in 2005, DCKAP is a global and distributed team headquartered in Austin, TX. Visit dckap.com or follow on LinkedIn.
About COE Distributing
COE Distributing is a wholesale distributor and contract manufacturer of commercial office furnishings, delivering innovative workspace solutions through its private-label brand OfficeSource. Founded in 1947 as a family-owned business, the company has grown into a 100 percent employee-owned organization with distribution hubs in Pennsylvania, North Carolina, and Texas. COE partners with a global network of manufacturers and serves resellers across the country and the Caribbean. For more information, visit www.coedistributing.com.
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