Husband and wife Matthew and Katy Culmo own By George, one of Austin’s most successful apparel boutiques, which is celebrating its 29th anniversary. With its 4,000-square-foot contemporary flagship and a 2,000-square-foot addition focused on designers in the heart of downtown Austin at 524 North Lamar, the store’s two locations reflect the trendy beat of Austin. Its original space opened on the University of Texas campus nearly two decades ago but closed last year. Its latest door bowed in 2007 on Austin’s hip SoCo (that’s South Congress Avenue). But these days, By George is feeling like David fighting the Goliaths of new national stores moving into Texas’ capital city.

WWD: What was the style and the retail scene like when you opened in 1979?
Katy Culmo: There weren’t many stores here. The Cadeau has been around for 50 years, and the big department store was Scarboroughs. We were on the college campus in the bottom floor of a high-rise dormitory. Austin was really earthy, crunchy, supercasual, a big music scene. I miss it.

WWD: How has Austin changed over time?
Matthew Culmo: People have been drawn to Austin in the last 15 years, and with that comes the big developments and the major specialty chains. The number of luxury stores has increased, but the buying power here isn’t such that it can sustain all those stores. People come to Austin to be able to shop at cool specialty stores like ours, and now they go to the stores they go to in all the other cities — that’s the frustrating part.

WWD: What about Austin’s style has stayed the same —  how would you describe the DNA of Austin’s style?
K.C.: Birkenstocks, hippie, casual.
M.C.: Austin is hip, it’s not urban. You can go to the nicest restaurants here casually. That’s why people have moved here — because it’s not the scene from Houston, Dallas or L.A.

What brands do you carry? How has that changed over time?
K.C.: I’ve had French Connection from Day One. Now it’s in the younger SoCo store. I bought my first house on the money I made on Esprit in the early Eighties. I’ve carried some version of Urban Outfitters from its very beginning; now I have Free People and Leaf Daughter. Our new SoCo store is very tourism-based, because that is one of the places on everybody’s radar. It has more denim and little independents like Ali Ro and Madison Marcus. It also has our diffusion lines — we carry Tracy Reese in our downtown flagship versus Plenty in SoCo.
WWD: You’ve added designer space. Is there a real demand for designer-priced goods in Austin?
M.C.: We thought that Austin was ready, and that was an evolution of part of our business. We still have 4,000 square feet dedicated to contemporary versus 2,000 to designer, but that part brings in a customer who otherwise had to go to Houston or Dallas.
K.C.: But if people are going to spend that type of money in Austin, they want something with shelf life, so we’ve done better with Lanvin and Bottega Veneta than Chloé or Stella. In Austin, if they are going to spend $2,000 or $4,000 on something, they want to feel like it’s like furniture.

WWD: How has The Domain affected business?
K.C.: We’re not doing as much business as we were a year and a half ago — we’re maybe off 10 percent. We’re overretailed in this economy. It’s becoming harder for the independents to compete with the majors. When a new development opens up, even your best customers are going to check it out — but they will come back to you. We’ve got our boxing gloves on for our market share. We created a By George charge card and quarterly style reward bucks and so far, it’s really working. When Neiman Marcus first opened it ran a campaign “Keep Austin Fabulous” as a take on “Keep Austin Weird,” and we ran a counter campaign: “Fabulously Local.”

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