The Fulton family got into the home building industry by accident in 1976 when Ira Fulton, who at the time was running a chain of men’s clothing stores, loaned some money to a nephew who was trying his hand in the building business in Tempe, Ariz. When things didn’t go so well for the nephew, Fulton grew concerned and called in his son-in-law Norman Nicholls to keep an eye on things. At the time Nicholls was working in retail in Missoula, Mont.
“So Norm comes down from Missoula and six months later they not only made the original money back, they built 17 homes that year,” says Doug Fulton, the son of Ira and current CEO of the firm. “My dad said ‘just keep doing it, keep going’ and that’s the beginning of Fulton Homes.”
The Fultons ran Eagelson’s Big & Tall stores until 1996, when they decided to pivot full time to home building, which they saw as a more profitable endeavor. “In those days we could turn a cornfield into a model complex in a few months,” says Doug.
Although the Fultons checked out of the clothing business when they sold Eagelson’s, they still consider themselves retailers. Doug constantly sees similarities. “It’s turns, it’s absorptions it’s mark-ons, mark-up, and quick replenishment of inventory – which is now spec houses,” he says. “Before I came over here we had no specs, now it’s a third of our sales.” Their experience selling houses in the Phoenix, Mesa, and Tempe markets has earned them a spot at No. 66 on the BUILDER 100 list of the country’s top firms ranked by closing.
Market conditions are currently favorable in Arizona and Doug sees his region in competition with other Sunbelt destinations. “We’re one of the most affordable areas in the Southwest,” he says. “California is off the charts, Texas is pretty competitive, Colorado is way more expensive and Nevada is way higher than we are. We have jobs, industry and education, it’s a good place to live.”
Doug says that the company has not been adversely affected by the labor shortage because it has provided steady employment to a stable of subcontractors through good times and bad. But the labor shortage is affecting the completion of infrastructure projects that Fulton Homes relies on.
“We’re talking about streets, roads, curbs, gutters, sewers, cable, the whole industry has been pushed to capacity,” he says. “I was told last week that in 30 days any development job quoted won’t be able to get equipment on site until 2020. I have 5,000 lots under development as we speak.”
A Retail MindsetFulton has some stiff competition from the big dogs in town including D.R. Horton with 11.2% of the market share, Meritage at 7.5% and Taylor Morrison at 6.8%. To stay competitive, Fulton plays the role of small dinosaur. “You’ve got to be quick on your feet. We’re like the velociraptor running around the feet and ankles of the T-Rex,” he says. “We’re fast, we’re nimble we can scramble quickly, we don’t have committees, we don’t have meetings, everyone here is a working manager.”
At Fulton, formal sit-down meetings are discouraged. “When we built this building I made the hallways a foot wider because when I read about Gore of Gore-Tex in retail, they built their hallways a foot wider because most of the meetings occur in the hallways as you’re walking from one place to the next,” says Doug.
Fulton also believes in a sales axiom that he attributes to the John Deere tractor company: “Sell on quality, not price.” At Fulton that means not being the most affordable builder in the marketplace. “If somebody comes in looking for the biggest home for the cheapest price, we pat them on the back and send them to our competitors. That’s not us. We tell them, you’ve stumbled into Nordstrom’s and you need to be at Kmart,” he says. “We think in retail, we have retail brains here.”
The firm is a big believer in giving back to the community, much of it through the Fulton Foundation. Education is a huge theme as the Arizona State University College of Education is named after Mary Lou Fulton, Doug’s mom, and the Engineering College is named after his father. “We’re really proud of Tempe, we put down our stakes and we want to support everybody who’s here. We like this place,” says Doug. Besides his love of Arizona Fulton has another reason for getting up in the morning. “We’re delivering the American dream here,” he says.