NEW YORK -- The American Place, Edward S. Finkelstein's store that has been operating in China since last October, could close this season.
Finkelstein, the former R.H. Macy chairman, had visions of rolling out a small, moderately priced specialty chain in the Far East. He said Tuesday that if the store closes, it won't be due to a lack of business.
The 3,000-square-foot American Place store opened Oct. 8 on Beijing Road in Guangzhou in southern China.
It had a bumpy beginning. Deliveries were late, air conditioning was missing for months, and it was difficult to fill a few key jobs, including an assistant manager to help merchandise the store.
"The business didn't start responding until we got all things straightened out," Finkelstein said during an interview at his office here at 712 Fifth Ave.
After around three months, deliveries were normalized, prices were "sharpened" and the word about American Place spread, Finkelstein said. The store was never advertised, he added, relying instead on word of mouth.
But one essential piece is still missing -- a second store.
Finkelstein hoped to have it operating just across the street from the existing store. He is still trying to secure a lease to the 4,000-square-foot property, which he believes could rescue the business.
"If we are able to get a reasonable lease, we could be operating with 7,000 square feet by the middle of September," he said, adding that the issue will be resolved within "several weeks."
Another store would mean more volume and a bigger pencil for writing orders. According to Finkelstein's mathematics, he can run an effective retail business in China only if he has an annual volume of at least $3 million to $3.5 million to meet minimum order requirements. One store doesn't do the trick, he said.
According to reports, the one unit has averaged $500 in sales per square foot, and is tracking at about $1.5 million for the first year. Sales in March hit $200,000, which Finkelstein sees as an indication that the business has finally kicked in.
He declined to provide information on bestsellers but said that kind of data has been useful in strengthening Wisetex Ltd., the Hong Kong trading company set up last year by Finkelstein's son Mitchell.Wisetex has been supplying some of the merchandise to American Place. Among the store's products: twill pants, peplum blouses, chambray shirts, cotton-ribbed scoop-neck sweaters, colored denim jackets and leggings -- all with Western styling typical to U.S. stores.
Finkelstein said he has talked to potential licensees from Japan and Singapore who would run American Place stores. He declined to mention their names. He also raised the possibility of bringing in a Chinese or Hong Kong investor to put in "a small amount of money" to keep the current business alive. He pointed out that having an Asian partner would be helpful in business negotiations and bridging the cultural gaps. "We hope we can go forward," said Finkelstein, who continues to work as a consultant, here and abroad. "The concept is sound, but it's not going to develop as fast as we thought."
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