Q&A With PHS International's CEO Chuck Harnish

Established in the early 80s, PHS International has been — and continues to be — on a path of progression, evolving with the needs of the marketplace. When Jim Horne founded the company, it was called Professional Healthcare Supply and served as a small healthcare company. He met Chuck Harnish, who became his partner, both in business and in life, in 1990.

“I was working as a corporate trainer/human resources director for a small regional chain of restaurants and nightclubs,” Harnish told XBIZ. “A few years later, I was seriously burning out on the restaurant business and was looking for something else to do. Jim and I enjoyed each other’s company so much that we started brainstorming ideas of things we could do together. Soon after, I started a small business called Phabulous Handcrafted Stuff (PHS).”

We’re also quite proud of the relationships we’ve maintained with our customers, which remains the biggest asset we have, and the fact that most of our staff have been with us for 10-15 years.

Harnish made custom Christmas decorations and other handcrafted items — including turning some rainbow ribbon into several gay pride-themed items.

“A small gay pride store had just opened in Phoenix and Jim took my stuff in to try and sell it to the store owner,” Harnish said. “The store owner bought the items but stated that he really needed more rainbow stuff for personal use — necklaces, key chains, etc. We took his suggestion, went to a bead store, and started making a small offering of gay pride goods. Samples of our first collection of items easily fit in a small fanny pack. Our first ‘catalog’ was nothing more than a 3x5 photo of our collection arranged on our dining room table and then stapled to a trifold ‘brochure.’ We kept investing in the company, bought out several other small pride companies, and before you know it, our catalog had grown to more than 150 pages with more than 5,000 SKUs. Within five years, we were the largest gay and lesbian pride company in the world with sales on every continent except Antarctica.”

The Pride business flourished for PHS International for more than 10 years. However, by 2005, Harnish says the company started to see sales start to slow, “except for foreign markets, which still thrive to this day.”

“As gay people became more accepted in U.S. culture, rainbow-themed items became less important as a form of national recognition and relevance, so we knew we needed to diversify,” Harnish said.

With many of PHS International’s early accounts fulfilling “adult” sections in their stores, the company decided to move into pleasure products. Horne and Harnish then met product development pros Randy Alvstad and Michael Merrill and together they created a new concept: the first fully branded line of adult products, specifically merchandised and marketed for gay male couples, which is now called M2M.

“We knew that this line was a perfect fit for us and with its launch, we officially became an adult products manufacturer,” Harnish said. “We stunned buyers at our first ExpoMark trade show with a fully merchandised loaded 4’ x 8’ slat wall of M2M products. We created the first fully branded line of adult product that crossed over many categories of adult goods, all packaged in matching clam shells with coordinated colors and our distinct M2M logo.

“Our concept was not to sell individual products but fully merchandised displays of products. We brought traditional retail branding and display ideas to the adult industry and are credited by many industry veterans as the first company to do so.”

Since then PHS International has developed H2H — its product line for hetero couples, and the Fresh vegan-friendly line. Recently, the company added Gaysentials Pride merchandise, Bijoux de Nip nipple clamps, and Ka-Pow Color colorful BDSM gear to the line-up.

In this exclusive interview, Harnish discusses PHS International’s specialties, accomplishments and more:

XBIZ: What are the company’s principles? How have they evolved?

Chuck Harnish: We started out wanting to be a full-service “one stop shop” for gay retailers. It was also very important to us that our pricing be fair and reasonable; we treated PHS as a big business from the beginning, buying in large quantities so that we could offer much lower prices than our competitors. Quality customer service and quick speed have always been our top priorities. We always say that everyone who works at PHS has the same No. 1 priority regardless of position and that priority is to get the orders out. We are very proud of the fact that more than 95 percent of all orders ship on the same day they are received.

XBIZ: How did PHS become a hallmark brand for the LGBTQ community?

Harnish: Our huge selection and fair pricing first and foremost, but we also recognized early on the need to give back to our community and through the years have donated thousands of dollars in merchandise and cash support to hundreds of organizations and groups throughout the world.

XBIZ: Which of PHS’ accomplishments are you the most proud of?

Harnish: First, all the hard work we did in the early years with no business loans or outside investments. We’re also quite proud of the relationships we’ve maintained with our customers, which remains the biggest asset we have, and the fact that most of our staff have been with us for 10-15 years. We have very little turnover, and I think that speaks to the quality of workplace we have created for our employees.

XBIZ: What inspired PHS to create the M2M line? What was the industry’s response to the line’s debut? How did consumers respond?

Harnish: M2M was the brainchild of Michael Merrill and Randy Alvstad. They brought the original concept to us and together we developed the brand you see today. We created M2M as a way of giving back to the gay community, which had supported us so well for so many years. No other adult brands had overtly embraced the gay community, which we felt was deplorable; during our first ExpoMark, we were shocked by the prevalence of subtle homophobia displayed by some of the industry’s top movers and shakers. It was a real eye-opening experience.

Once we had the complete line, we had to spend the next few years working hard to win over many of the top retailers and distributors. We were even told by one chain owner that he had zero gay customers, even though his most popular DVD rentals were all gay titles. We thought we had an immediate slam dunk with M2M, but it took time for many of the top players to stock the brand. However, it’s now a mainstay in most adult stores.

XBIZ: Discuss Michael Merrill’s return to PHS as partner and co-owner. How will this influence the brand’s future?

Harnish: We are so excited to have Michael back as a partner and part owner. First, because of his boundless energy and incredible creativity — he makes us all better at what we do and really energizes our entire staff. Secondly, it is a relief for Jim and I to have someone of Michael’s abilities to take over for us as we start to think about semi-retiring and starting the next chapter of our lives. We know that PHS International will be in great hands.

XBIZ: What sets PHS apart from its competitors?

Harnish:Today I think it is because of our personalized service, our willingness to help a customer regardless of what it takes, and our ability to adapt to accommodate almost any customer request. One of the great things about PHS is that we don’t have any rules in place to hinder employees in their ability to take care of our customers; we empower our employees on every level to do the best they can. Also, I think it is our ability to develop unique products that are not already offered by everyone in the industry, including biothane rubber, stainless steel, beaded clamps, and beaded pasties. We smaller companies have to constantly be looking for ways to stay relevant, as it is nearly impossible for us to compete with the Big 5 on price. Lastly, I feel that our commitment to our brand sets us apart. We continue to push sales of fully merchandised displays rather than individuals products in order to establish brand loyalty and repeat business.

XBIZ: How expansive is PHS’ product range?

Harnish: Our product range covers the entire spectrum of adult products: cock rings, nipple clamps and adornments, pasties, vibrators, dildos, douches, collars, harnesses, whips and paddles, leashes, restraints, weights, and more. We feature softer items and hardcore items, often merchandising softer goods with harder goods to entice buyers to check out items they might not normally have considered. We work really hard to create cross-sale displays in which product sells other product.

XBIZ: Who is involved in PHS’ product development? How would you describe the process?

Harnish:Jim and I have largely been the “idea guys” for the last few years. With Michael back, we’ll be able to rely on his creative and thoughtful mind to not only think up new products, but also find ways to change or update existing items to remain relevant and on-trend. We also work with quite a few factories that frequently present what they feel would be great fits for us.

As for the process, our team works very quickly and it’s not unusual for us to have a new product developed and ready within a few months. I think we work “off the cuff” quite a bit, in the sense that we seize opportunities and jump on new ideas while they’re fresh. We’re not a company that forecasts out over years and years, remaining nimble and flexible works quite well for us.

XBIZ: What are the company’s goals for the future?

Harnish: Our No. 1 goal is to continue to listen to our customers and provide them with fast service and quality products, all while staying on top of consumer demand. We’ll be keeping a close eye on markets that remain underserved and undervalued by conventional adult manufacturers and find ways to create fully merchandised collections that make sense for our ever-evolving industry.