Desert storm: they took over their father's company during a recession. But within a decade, brothers Buzz, David and Edward Ghiz had swept through Phoenix and Las Vegas. Here's how they did it

Pool & Spa News, May 7, 2004 by Rebecca Robledo

It was the time second-generation business owners dread, yet spend their entire lives working toward.

When George Ghiz passed away in May 1988, his three sons were ready to run Paddock Pools & Spas. They'd grown up with the Scottsdale, Ariz.-based company and done everything from cleanup to management. George had a well-thought-out succession plan: The eldest, Buzz, became president while younger brothers David and Edward served as senior vice presidents. David managed the retail operations and Edward took over the construction end of the business.

"[Our father] felt that for the transition to be successful, we'd have to stay out of each other's hair," recalls David Ghiz, 46.

Paddock was healthy. The company built approximately 600 pools and generated around $25 million annually. But George's sons were still in their late 20s and early 30s. "I would get calls on the phone: 'You know, second-generation families lose businesses 40- to 60 percent of the time. This is a big business. Are you sure you're ready?'" says Buzz Ghiz, 50. "I'm thinking, 'Holy crud!'"

Then, just two months later, the nation was hit with one of the worst recessions of the century. It was white-knuckle time. Paddock's numbers started softening and while they weren't seeing red yet, things weren't pretty either. The brothers started taking jobs for less than they should've.

"The more we did, the more we lost," says Edward Ghiz, 44, who has since left Paddock to start a new pool-construction company called [H.sub.2]O By Design Pools, Spa & Landscaping in Tucson.

So the brothers developed an aggressive business plan. The idea was threefold: Create super-size stores that rival Disney outlets; increase construction by targeting home builders; and maintain an extremely high customer-satisfaction rate.

Between eight locations in the Phoenix/ Scottsdale areas and two in Las Vegas, the company currently generates $110 million in revenue yearly. Now called Paddock Pools, Patios & Spas, it also holds a 22 percent market share in the ever-burgeoning Arizona desert scene. Today, it has transformed itself into one of the most successful family-owned pool companies in the nation.

Bigger and better

Paddock's stores leave a big impression on customers and industry veterans alike. The 22,000-square-foot showrooms take pool and spa retailing to a new level, with full-sized pool and spa displays, landscaping and custom-label patio furniture, which Paddock helps design.

"I think they've established their stores as a standard in our industry that we all work toward," says Brian Quint, a former NSPI president and co-owner of Aqua Quip, a Seattle retail/construction firm that also is a Pool & Spa News Top Builder.

In fact, another retailing institution, Litehouse in Brunswick, Ohio, which is owned by SCP Pool Corp., approached the Ghizes about purchasing the company. While the brothers explored the possibility, and notified their 500-person staff about the potential acquisition, it didn't turn out to be a fit in the end.

"The deal just didn't meet the expectations of buyer and seller," Buzz Ghiz says. "The Ghizes are retaining ownership and moving forward."

To keep merchandise moving, David Ghiz treats his locations as backyard superstores. He has added patio furniture, accessories and barbecues to the company's existing line of pool- and spa-related goods. He also developed a new philosophy of store design, making the locations look like backyards rather than retail spaces.

"When customers see Paddock, they get wowed and think 'backyard,'" David Ghiz says. "[They stop] thinking about what might have been on their minds before they walked in."

This design philosophy grew out of an original concept by his father--Garden Town. Built in 1964, the 10-acre display park features eight pools and five spas. People thought George Ghiz was crazy when he conceived it, says son Buzz, but his father likened it to selling a car: If people can see it and feel it, they'll want to buy it.

Today, Paddock's prototype store features a complete backyard-pool display. And in all the company's showrooms, patio furniture is arranged in vignettes, creating relaxing environments where customers want to sit down and get comfortable. As a result of this "see it and feel it" approach, the Summer & Casual Furniture Manufacturers Association bestowed its Apollo Award for furniture retailers on Paddock in 2000.

The layouts evolved when David Ghiz analyzed world-class retail spaces such as the Disney stores. They taught him the importance of detail in designing a realistic scene. To mimic a backyard, he used skylights in place of the sun to illuminate real softscaping. People and plants convincingly feel they're in an outdoor environment.

The Mirage Hotel and Casino in Las Vegas also played a key role in helping Paddock create an inviting atmosphere. "People are mesmerized by those beautiful aquariums behind the [check-in] counter," says David Ghiz. "The lines get long, yet nobody gets upset." He placed similar, smaller aquariums and television sets in some of his stores.