NEW YORK — Customer knowledge, clear brand identity and an uncompromising vision of store concept and location are critical factors in building a successful real estate portfolio for a designer wanting to break out from wholesaling to department stores or other distribution channels and into their own branded stores, experts said.

“You must understand who your customer is,” said Jeff Green, president and chief executive officer of Jeff Green Partners, a retail consultant and site selection firm. “Whether it is their first or 15th store, a small business has to hit the home runs. The hardest thing to do is to open the ‘A’ stores first, but it is essential if you want to make an impact on investors and stockholders, not to mention your customers.”

A customer profile that marries the demographics with the “psychographics,” explained Green, will make clear where and what kinds of stores are needed. If a designer sells a product online or through catalogues, for example, he or she should use that information to locate the main clusters of customers and start developing a real estate strategy from there.

“We can’t advise people and locate them until we know to whom they are trying to appeal,” said Laura Pomerantz, principal of brokerage firm PBS Realty Advisors. “A designer has to be very clear about their customer base and the direction and focus of their business before they can begin to open stores.”

Once the customer is identified, brand clarity and consistency needs to be established for the stores. “Everything has to be consistent,” said Pomerantz. “The merchandise, the store design, the collateral materials that go to the customer, the advertising, and any marketing that is done at either the wholesale or retail level. There should be no confusion at the customer level about what the brand is.”

Brand awareness is a critical factor for manufacturers reaching consumers directly for the first time.

“Having a retail store is a great idea for a manufacturer,” said Robert Futterman, chairman and ceo of brokerage firm Robert K. Futterman & Associates. “You can control the environment, grow your stores at your own pace, and expand using cash flow from your existing stores.”

This story first appeared in the May 22, 2006 issue of WWD. Subscribe Today.

Futterman, who has helped retailers such as Intermix and Apple build their real estate businesses, cited designers Rock & Republic and John Varvatos as manufacturers who have successfully gone from strictly wholesale distribution to owning their own shops. Catherine Malandrino and Tory Burch are other examples of designers who used stores not just as additional sales outlets but as brand builders.

Malandrino said Futterman was “very cautious” in developing the brand. Having opened stores in Manhattan’s SoHo and Meatpacking District, Malandrino is looking to open a store on Madison Avenue and is working with Futterman on a national rollout.

“They are protective of the brand and how they’ve grown it, and now they are ready for the next step,” he said. “Once you figure out how to do two stores, you can easily do 20 stores.”

Tory Burch, Pomerantz’s client, has done the same. After selling wholesale, she opened one store in NoLIta.

“At least one store is very important,” said Pomerantz. “It shows the merchandise and the brand in its entirety, whereas your wholesale clients might merchandise it differently.”