Shinola Jacques Panis GlobalShop

LAS VEGAS — The six-year-old Detroit watch company that’s carefully built a brand around craftsmanship is now staring down the face of a hotel, begging the question of just how far the Shinola name can go.

The runway would seem long in the eyes of the company’s president Jacques Panis, who delivered the keynote address Tuesday at the GlobalShop conference, which runs here through Thursday.

The company is set to open a Shinola-branded hotel in downtown Detroit, totaling 130 rooms, in fall 2018.

Shinola is not about American made; we’re not saving Detroit,” Panis said. “This hotel implies further job creation and training and that’s Shinola’s mission.”

It’s also — if successful — a much larger glimpse of what the brand could grow up to be. The company, which began making watches and bicycles, also now sells leather goods, jewelry, pet accessories and, more recently, branched into audio with turntables. Hotels could mean home goods and the like, but whether the property becomes one large-scale showroom from where bed linens and fixtures could be purchased remains to be seen.

“You can buy the hotel if you want,” Panis said jokingly of a conference audience member who asked if items in the hotel would be for sale. “I would say this, because if I say too much our publicist will kill me: We are now in your home with the turntable so imagine what we could do with the hotel and where that might go. We are developing all of the furniture, all of the fixtures from the knobs on the doors to the knobs in the bathtub. So where could that go and what does that mean and how much further can we take this brand from an elasticity point of view?”

While hospitality isn’t a traditional category for a fashion brand to necessarily branch into, it speaks to the general approach the company takes when it comes to expansion in general.

“For us, it’s always been about the story,” Panis said. “We have an authentic, real transparent narrative and that is the core foundation of what we started, and we’ve maintained the integrity of those stories. We continue to tell stories and we continue to look for categories in which there is a small, defined market, a small defined manufacturing hub in the U.S. But, again, the key word being small. And with innovation and capital we can go into these categories.”

The company has seen successes. Shinola was founded in 2011 in Detroit, where it has a 95,000-square-foot factory. It had four employees at the start of the business. Today, there are 659 worldwide. The firm counts 19 stores in the U.S. along with one each in Toronto and London.

The company has largely opened stores in neighborhoods rather than in malls, although it does have some shopping center locations such as the one at Caruso’s The Grove in Los Angeles. Its first store, the Detroit flagship, continues to be its top-performing door. The store notched sales of $3 million in its first year in operation, making $180,000 in the first two days of being open.

The company is set to open a Brooklyn store in the next few weeks and also has plans to open a much larger footprint store outside of Detroit this year. Creating stores that are unique to the communities they reside in has been part of the brand’s success. For example, the downtown Los Angeles store also has an on-site tattoo parlor. The Abbot Kinney Boulevard store in Venice has a hidden audio room that shows off the company’s turntables.

“It allows for that behind-the-scenes tour. That little gem. That little nugget,” Panis said of Abbot Kinney. “We can’t forget word of mouth and how important word of mouth is when it comes to someone’s engagement with the brand. If you go into one of our stores and your experience is bad, the whole world is going to know. If you go into one of our stores and the experience is good, you might be willing to tell a few people.”

With 21 doors, the company is perhaps in a more enviable position, unencumbered by the baggage of a real estate portfolio in the hundreds some larger competitors have.

“For those big organizations, it has to start at the top and come from the boss,” Panis said of what larger companies can do. “Look, the big retailers around the world that have 2,000 stores that are all cookie cutter and you plop a box into a box, it doesn’t have to be that way. There are ways through innovation, through creative work to develop experiences in 2,000 stores. They can be unique. It goes back to people though.”

The off-price channel with a few outlet malls is also a component of the business moving forward, but the doors will be on brand, Panis insisted.

“Any retailer — large, small, medium — has to find a way to liquidate things that didn’t work….We have to get rid of products that did not work and we have to do that in a way that still allows us…to do that at the level of quality that we adhere to in all our other stores. We’re not just going to open up a [off-price] store and just load it up with goods and fixtures and do what a lot of brands have done from an off-price point of view. So  we’ll have to do a couple more here and there. It’s a part of the business and it’s not something we shy away from.”

The company recently closed its Silver Lake store, with Panis saying the location was “just a little bit off the beaten path and wasn’t the right environment for Shinola.” The company still has three stores in Los Angeles. There have been risks involved in implementing and testing different things related to creating an in-store experience.

“Risk is involved with anything and everything people do on a daily basis,” Panis said. “A lot of it goes back to decisions that are for the brand. How can we mitigate that risk is something we ask ourselves when we’re going into these community environments. Risk is just a part of it. You don’t build a watch factory in Detroit and then worry about risk.”

Whether Shinola hotel guests will be able to buy the contents of their rooms in the future or what other business expansions the company will embark on next remains to be seen, but the brand and maintaining it drives all of those conversations at the end of the day.

“If we destroy that or dilute that,” Panis said, “we have a big problem on our hands.”

For More on Shinola in WWD:

Shinola Shows Its Support of the American Worker in New Ads

Shinola Launches Pamela Love Jewelry Collection in Toronto

Shinola to Open Branded Hotel in Detroit

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