Andrew Kuhn October 1, 2021

Some Thoughts on Calloway’s Nursery, Inc.

I plan to use Focused Compounding as my investing journal. My “writeups” will be less structured than Geoff’s, but could serve as a starting point for members to research a new stock. My posts will literally be similar to emails that I send to Geoff whenever I have thoughts on a business — basically straight from the stream of my consciousness, lol.

Feedback/your notes/thoughts are highly encouraged in the comment section below.

The first stock that I want to talk about is Calloway’s Nursery, the garden and landscape retail store in DFW/Houston. Here’s a brief history on the origins of the company: taken from

The garden center industry in Texas underwent significant change during the 1990s as competitors fought for market supremacy–or, at the very least, for survival. Some market participants buckled under the pressure exerted by mass-merchandise, discount chains such as Wal-Mart and Kmart, while other garden center firms consolidated their operations to improve their odds for survival. Caught in the midst of the pitched battle for the garden business of Texas was relative newcomer, Calloway’s Nursery.

Calloway’s Nursery was founded in 1986 by three former senior executives at Sunbelt Nursery Group. Formed in 1984, Sunbelt Nursery was created to help expand Pier 1 Imports’ Wolfe Nursery Inc. concept. Selected to lead the company toward such an objective were Jim Estill, Sunbelt Nursery’s president and chief executive officer; John Cosby, the company’s vice-president of corporate development; and John Peters, its vice-president of operations. Together, the three executives helped develop the company into a regional force with more than 100 stores in a five-state area. After a change in ownership at Sunbelt Nursery, the trio disagreed with the new owners about the future direction of the company. In March 1986, they formed Estill/Cosby Enterprises to facilitate the creation of their entry in the garden center market, Calloway’s Nursery.

Although Estill, Cosby, and Peters were veterans of the industry, they consulted the patriarch of the garden center industry in the Southwest, 65-year-old Sterling Cornelius, before starting out on their own. Sterling Cornelius’ father, Frank Cornelius, started the family nursery business in 1937, initially occupying a portable building that measured only slightly larger than 100 square feet. Except for a four-year stint in the U.S. Navy during World War II, Sterling Cornelius was employed by his father’s company from its start, witnessing the addition of Turkey Creek Farms, a nursery operation, in 1951 and the company’s development into a favorite among Houston’s lawn and garden enthusiasts. Estill, Cosby, and Peters solicited the help of Sterling Cornelius because, by their own admission, they wished to copy the operating strategy used by Cornelius Nurseries. “We saw an opportunity to create a different kind of nursery in Dallas-Fort Worth, and quite honestly, Cornelius was our pattern,” Estill remarked in a November 26, 1999 interview with Dallas Business Journal. “Cornelius was always the group in Houston that went after the upper-income customer, and there wasn’t anything like that in the Dallas-Fort Worth area.”

After Sterling

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