By  on November 17, 2004

Arguably one of the hippest specialty stores in the country, Ron Herman has no ambitions to expand beyond California.

“I think of ourselves as Hollywood’s neighborhood store,” said Ron Herman, owner of the five-unit chain. Having bought Fred Segal Melrose in 1976 and then opened four more stores in Brentwood, Beverly Hills, Costa Mesa and Malibu, Herman couldn’t be happier with both the chain’s size and its Southern California location.

“I consider my size as small, very small, maybe medium. It means simple, not complex. It means neither I nor our staff try to overanalyze, and we don’t take ourselves very seriously. That’s the way in which we really have fun,” he said in his keynote speech.

And he feels lucky to be in L.A. “I’ve personally chosen to be in L.A. and to stay in L.A. We have a community of fashion-conscious people, people who set trends and are willing to take chances, and that news travels very fast.” He acknowledged that the store’s reputation — having been in business nearly 30 years — “is really quite large, and I hope it’s larger than we are.”

Herman said the company selects locations in an unusual way, and explained that he once took a trip to Las Vegas with the vice president of his women’s division, John Eshaya, to check out a site. “I said, ‘Here, sit on the bench in the middle of Caesars’ floor and tell me what you think.’ About five minutes went by and John said, ‘OK, they’re not here, let’s go,’ and we got on a plane and we left. So we don’t have a store there.”

Herman recently opened a tiny boutique in Malibu, home to many A-list celebrities. “The challenge has been to make that store feel like Ron Herman on a Saturday afternoon, in a space that’s only 700 feet,” he said.

The mainstay of his business remains jeans. Herman recalled a buying trip to Europe many years ago when he tried to buy these important designer collections, and they said to him: “‘No, no, no, you can’t have this, you can’t have that,’ and I kept asking why? And they said, ‘Because you’re just a jeans store.’”“But one really wise retailer, still alive and opening stores at the age of 85, said to me, ‘You’re not just a jeans store. You are the jeans store.’ And I went home thinking, let’s just focus on that,” said Herman.

“I learned something from that comment. We’re famous for that. We sell jeans in Melrose in a hole in the wall, a cubby this big. We call it a jeans bar. But I think jeans are our roots. They’re comfortable. They’re sexy. You change into them when you want leisure and to relax, and want to be comfortable, and I think they represent probably your most intimate piece of clothing.”

Interestingly, many of his employees, among them, salespeople, cashiers, delivery drivers, office and warehouse workers, manufacture accessories or apparel for the store. “The reason people come here is we have something unique. We have a lot of people in our store who make things, maybe as many as 20 people,” said Herman, noting that five years ago, Nina Garduno, a vice president and men’s buyer, developed a line called RH Vintage, which has been a huge success. She put a $1,000 pair of jeans on display in the front room and “we couldn’t make them fast enough.”

“Now it’s become a famous brand,” said Herman — the line has sold in stores in Paris, Spain, Germany, Italy and Japan. But Herman doesn’t set up a separate wholesale sales area for the line. Instead, it’s displayed in the Melrose store. “The floor of our store perhaps is the best showroom we have.”

Other employees with their own collections include Eshaya, who makes the Jet line, and Nia Nguyen, who started a T-shirt line called More. “My wife is now making skirts, and my daughter in the audience is wearing one of them. This makes us like a cottage industry. It works well to motivate people because they see opportunity working in our store,” said Herman, leading him to pose the question: “Can we do this because of who we are, or are we who we are because we do this?”Another thing that makes Ron Herman special is the way it mixes up the merchandise.

“Then we do the unimaginable. We take the collections, with the designers and labels, and we mix them, at the risk of being criticized; we do it for our customer. We do this not to create a better store, but to create a better shopping experience. That’s entertainment. It’s fun, it’s fashion. It’s what I do. I love it.

“People say our market is overcrowded. Nonsense,” he said. “There are new stores opening all around us all the time. It’s great, it’s new, it’s exciting, it’s competitive. Bring it on.”

Herman explained that not everything he buys for the store is a winner. A few years ago, he bought hundreds of three-button blazers and they didn’t sell at all. Now is the season of the three-button blazer, he said. “We took a risk, we were maybe the first. We were wrong at that time,” he explained. “We went back into the marketplace for the next season and there they were again. The reports and the data say, ‘Don’t buy those blazers again; you’re killing me with those blazers.’ Were we killing them or were we just too early? So, how important was the data, how important are the reports, how significant was the intuition? So we use it.”

The burning question he’s asked every single day is, “What’s new?” said Herman. “That is a direct response to open-to-buy. It’s open-to-new. We’re never closed. We’re like Denny’s. We’re open 24 hours, seven days a week. We’re open to new ideas, new designers. A lot of designers want to be in our store because they want to be discovered. They think that being in our store will help ensure their success. I like to think we are a must-see stop on your trip to L.A.”

The reason people shop at his stores is because they offer things that aren’t available anywhere else, he said. Also, he believes customers like to see the drama unfold.What also makes Ron Herman unusual is that his employees are like set designers and do the store’s construction work right in front of customers. “We have an entire staff of people who do nothing but hammer, nail and build. If you’ve been in our store, you know you run the risk of stepping on a nail or being hit by a piece of wood moving through. We don’t close when we do that. The magic is done before your eyes. We’re constantly a work in progress. We do this work out in the open, so you can see how it’s done. You go away having participated in the changes that take place in our stores.”

Personal service also has always been a hallmark of the operation. For example, Herman said he once had to export (and then import) six suitcases of clothing to the Bahamas because a recording artist who was filming a music video there requested it. “He wanted us there with the clothes,” said Herman. Just the other day, a customer who loves to shop came into the Brentwood store with her child because she didn’t have a baby-sitter. One of Herman’s employees took the child out for ice cream so the mother could try on clothing. And to make it even easier for customers with dogs to shop, the new Malibu store has dog bowls out front for food, bones and water. “We like the dogs to come in the store, but we’d rather they stay outside,” he said.

Herman finds himself dealing with a sense of urgency on a daily basis. “I don’t have to create a sense of urgency. I have to deal with a sense of urgency. That is my business. I have a person asking me all the time, ‘Give me something cute to wear and I need it now.’ And that’s my job. And to do that we have to take risks,” he said. In doing that, he relies on his intuition.

In response to a question from the audience, Herman explained how his business is divided between more established brands and the young up-and-comers. “When I walk though a larger store, I notice that the motivation that attracts you from one place to another is usually a name on a sign: ‘Oh, there’s Jil Sander, oh, there’s Miu Miu, oh, there’s Vera Wang,’ and you’re drawn to that. In my store, we don’t do that. We don’t have names up, so you don’t know what you’re being attracted to. You’re not put off because you don’t see large branded names. We mix these less-known [brands] and by mixing them, they are swept up in the wake of those designers that are well known. You as a customer are attracted more by the look of the display.”He said you’ll see it, touch it, try it on and then purchase it. “And the price is the least important thing of all,” he added.

With a background at both the Wall Street Journal and J. Walter Thompson, Herman was asked how his earlier experience shaped his retailing career.

“From the Wall Street Journal, I learned I don’t want to work for a large corporation and I didn’t want to go to another sales conference in Buck Hill Falls, Pa. From J. Walter Thompson, I arrived there and learned what it’s like to be Forrest Gump in 1968. They were at that time working to reelect Richard Nixon and I had graduated from Berkeley. I moved to drive a truck delivering clothes to a store. I learned I didn’t want to do advertising.”

In fact, Herman doesn’t advertise his stores at all, and relies strictly on word-of-mouth. Several years ago, he put a denim jacket with 10,000 studs out on the selling floor for $500. The intention was that somebody was going to go home and say, “I was in a store today, and those guys are nuts,” he said. He expected they would tell their friends about the $500 jacket, and someone would rush in the next day to see it.

One person questioned how Herman feels after giving a new brand its start and then having to drop it when it sells to department stores or opens its own stores. Is it the same story again and again?

“We do know the future. But the reason I’m still enthusiastic, optimistic, encouraged and passionate about our business is I’m actually getting some pleasure from that. I can give you a list of the names of the stores opening around us. Marc [Jacobs] is opening three stores — it’s like driving through Marc Jacobs-ville, and then you get to Paul Smith-ville, and then you get to Costume National, and Miss Sixty, even G-Star has its own store. And yet we remain core. I feel the sun is really shining on us. It feels [like] there’s more awareness to fashion and it’s all using us as the stable center. I enjoy that.”As for the store’s future, Herman said, “Too often people try to grow by going outside themselves. Our growth is within us. My goal has never been to be a multibrand store or be well known walking down the streets of America. If you did walk down the streets in Chicago and say, ‘What about that Ron Herman?’ Most people would say ‘Who?’ And ‘Who cares?’ And maybe that’s a good thing. That’s how we remain exclusive. There’s so much more to be done where we are. I like being grounded in a whirlwind of change.”

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