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A New Paul Harris on Retail Scene

NEW YORK — Like a phoenix rising from the ashes, the sixth store operated under the Paul Harris nameplate opened last month in Indiana.<br><br>The current Paul Harris operation, to be sure, is not the same retail chain that filed for Chapter 11...

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NEW YORK — Like a phoenix rising from the ashes, the sixth store operated under the Paul Harris nameplate opened last month in Indiana.

The current Paul Harris operation, to be sure, is not the same retail chain that filed for Chapter 11 bankruptcy court protection in October 2000. That Paul Harris operation ended up in the retail graveyard, but not before former chief executive Charlotte Fischer swooped in to purchase the trademarks for a paltry $43,000.

Fischer’s new company, PHS Indiana Inc., continues the tradition: All six stores are housed in former Paul Harris sites in Indiana. The first store was opened in Carmel on Nov. 1, 2001, followed by one in Daleville on Nov. 16. PHS then opened one in Kokomo in February 2002, Terre Haute in March and Indianapolis in April. The most recent, in Fort Wayne, was opened on July 11.

According to Fischer, the company is spending $1,500 on average to open the new sites. Ordinarily it would cost about $225,000 to build a store from scratch and $100,000 to reopen an existing location. However, PHS has the advantage when it comes to startup costs: The firm bought the furniture, fixtures and equipment left over from the original operation — enough for between 150 to 200 stores — during a separate bankruptcy court auction.

While Fischer said that individuals have expressed interest in investing in the company, she doesn’t expect to need financing until the company hits a store base target of between 10 and 20 locations. Although the plan had been to have 10 stores by the end of 2001, the company was able to open just two sites. Now the expectation is between 12 and 15 locations by Christmas 2002.

“Everything changed after Sept. 11,” Fischer said.

The ceo said that she was in New York on a buying trip for the Carmel, Ind.-based chain when the horrific events occurred.

“I was near Sixth Avenue meeting a buyer for hair accessories for our first store, just a few blocks south of the Empire State Building. Minutes after the first plane hit the World Trade Center, a store proprietor asked me what I thought about the plane hitting the building. I was so focused on my store that I wasn’t sure if I heard correctly. I assumed that this guy blew it all out of proportion and went to Sixth Avenue, where the plant markets are, to take a look. Many people were busy working, but they were looking north so they didn’t see a thing. I turned south and could see all this smoke.”

This story first appeared in the August 12, 2002 issue of WWD.  Subscribe Today.

The sight put matters in perspective: “What I realized was just how focused I was on my business and that there’s so much more that’s important in this world than just the stores,” she said.

Early concerns were even whether the first store would open. “I wondered about that a lot. The country was about to go to war. We took it day by day and proceeded as planned, because we already agreed to lease the space at the Carmel site and made some commitments to inventory,” Fischer recalled.

All of the merchandising was initially done domestically from New York, although some of that has shifted overseas. The buyer hired by PHS, Brad Guth, had been a vice president at the defunct Paul Harris.

“It was a terrible time to start an apparel chain. Getting the business up and running isn’t really difficult, but there was a lot of hard work involved because we didn’t buy the history of the original operation. I wish I had the old records. I had to reposition the chain through contacts from memory, in addition to remembering what we bought and where we bought it. The company closed as a juniors company, and we were planning on taking it back to its roots in the misses business,” Fischer said.

So far consumers have gravitated toward fashion merchandise such as floral print capris, or similar items in trendy colors such as hot pink. Fashion denim is also a top seller. According to the ceo, “We couldn’t keep up with the initial demand in the first couple of months that we opened.” Also in demand is silver and turquoise jewelry. While the Midwest has traditionally been more conservative and the Paul Harris customer focused on core basics, Fischer observed that these days merchandise with a fashion content is selling at a brisker pace than it did just a few years ago.

“Many think that the old Paul Harris is back, but it never will be. That is one reason why we’ve added significantly more fashion. Some customers love it, but others have asked me why I am adding more fashion. The fact that this is a new company forced us to have more fashion than in the past so we don’t grow old with the customer. With the right mix, we can keep our traditional customer and still add to the customer base,” she explained.

Another change from the old Paul Harris days is the buying, which had been done from Indiana. “I’ve found that it is better to have at least some of the buying done from New York. The location is key to giving you accessibility to sources and current trends,” the ceo said.

To be sure, Fischer has many challenges to face, including potential disruptions in sourcing. “We’ve recently done some significant purchasing from India. There’s so much that is unpredictable in that part of the world because of the recent conflicts with Pakistan. For us it is a major concern, because we don’t want to have an expectation of product flowing in from the region when, in fact, we might not be able to get it out of the country. Now I need to consider alternatives just in case,” she noted.

“In addition to opening the new stores, I’m also starting a new company. It will be interesting to see how all this will unfold,” Fischer said.

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