Deegie’s Carma is getting its groove back.

This story first appeared in the January 4, 2011 issue of WWD. Subscribe Today.

The retailer, owned by the New York retail management and investment firm Three Wildcats LLC, launched with much buzz in 2008 because of its concept of integrating a clothing store, salon and cafe, as well as its Gensler-designed curvilinear shoe fixture. But it then suffered setbacks. The Kansas City, Kan.-area shopping center it opened in turned out to be a bad fit; founding partner John Wilson — who cut his teeth at Vestimenta, Ferragamo and Nordstrom — exited and became the president and chief executive officer of Antichi Pellettieri Bags USA Inc., and its initial 18,000-square-foot footprint proved to be too expansive.

“We opened up in what we realized later was the middle of the worst recession of our lifetime. Combine that with the fact that it was a large store and the fact that it was in an outdoor lifestyle center that was moving toward outlets,” said David Hulshof, Three Wildcats’ president and ceo, who leads Deegie’s Carma with Carmela Spinelli, former associate chair of the fashion design department at Parsons The New School for Design. “Through the downturn, you make your mistakes, you learn from them and you adjust your model.”

Deegie’s Carma has returned with adjustments. The company relocated in November to the Glimcher-owned open-air urban lifestyle center Scottsdale Quarter in Scottsdale, Ariz.; downsized its footprint to 5,000 square feet, with 3,000 square feet devoted to clothes, and eliminated men’s wear from the assortment. But the retailer remains dedicated to its original premise of crossing retail categories to be a one-stop shop for affordable merchandise, services and food in which customers — who average from about 18 to 30 years old and skew slightly older than Three Wildcats initially envisioned — linger.

“It is almost like what your grandmother or mother used to do when she shopped a department store. She’d go in, she’d have lunch in the tearoom, she’d have her hair done and it was an experience,” said Michael Glimcher, chairman and ceo of shopping center real estate company Glimcher Reality Trust. “Deegie’s is delivering that experience — but in a more modern and a more edited way.”

Some 80 percent of the Deegie’s Carma apparel assortment is less than $100, and the average clothing ticket is estimated to be around $170. Top brands include BCBGeneration, KensieGirl, Max and Cleo, Glam and Collective Concepts. Haircut and color services are mostly in the $40-to-$60 range, and the average salon ticket is roughly $110.

Spinelli stressed the price points differentiate Deegie’s Carma from high-end boutiques that offer clothing unattainable to many shoppers. “We were recessionistas before the recession because I don’t believe there is any reason to go broke to look good,” she said. Unlike merchandise at fast-fashion retailers, she added, however, “we are taking established brands so it is not disposable.”

Hulshof anticipates that Deegie’s Carma will generate $400 to $600 in annual sales per square foot. This year, he expects Deegie’s Carma to add two more units, and another two are expected the year after. Hulshof is aiming at Las Vegas and Los Angeles, and at outdoor lifestyle centers and bustling street retail districts for new stores.

“We are really focused on the West Coast, and the entry point to the West Coast is the Scottsdale-Phoenix market,” he said.

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