Maryland retailer South Moon Under, at 50 years old, is revving the engine on growth.
The company, run by chief executive officer Michael Smith and chief creative officer Patricia Darrow Smith, is set to open a store in Georgetown on March 1, with six doors expected to open this year as the company, which Smith said has grown out of the mid-Atlantic, sets its sights on expansion south. That follows four store openings last year. Next year, the company aims to open between eight and 10 stores and then between 10 and 12 beyond that, with a move to the West Coast likely by 2020.
“We see this as support as we grow our e-commerce business,” Darrow Smith said. “Opening more stores gives customers the experience of the brand.”
Like others in retail, e-commerce for South Moon Under is the company’s largest door, with brick-and-mortar seen as a means for helping market the brand. The retailer has grown a loyal following of 20- to 40-year-olds — the sweet-spot customer is around age 35 — by carrying brands such as Free People, Wildfox Couture, Citizens of Humanity, Tori Praver, Jeffrey Campbell, Kendra Scott and L*Space. The business totals 28 doors.
The Smiths — the husband-and-wife duo who in 1985 founded White House|Black Market, which sold to Chico’s in 2003 — think the business can eventually grow to anywhere from 120 to 150 stores in the longer term to help serve as an extension of the online business, with doors ranging from 3,000 to 4,000 square feet in street and lifestyle centers.
“From a business perspective, you always ask how big the brand can be and in some ways it’s not how big you can be, but how much you should be because those are two different numbers,” Smith said.
The couple knows a thing or two about the business, considering White House|Black Market grew to 100 stores before its sale to Chico’s FAS Inc. The two parted ways with retail for a little while to focus on their kids. “Then they got tired of us,” Darrow Smith said by way of explaining their plunge back into retail.
The Smiths in 2016 acquired the retailer with the help of private equity firm JPB Capital Partners, with South Moon Under founder Frank Gunion remaining on the company’s board.
“The retail landscape has definitely been through some pressure over the last year, but I also look at the opportunity and I guess this is a little bit of a simplification, but I think you always have to respect your customer and understand your customer,” Smith said. “I think retailers fall down when they forget who their customer is.”
South Moon Under makes it a point of creating stores that aim to avoid being formulaic. Events, such as trunk shows or holiday-themed customer gatherings, help add to each store’s experience.
“A lot of businesses that just kept duplicating the box became very boring, so when you have a lot of businesses go out of business, then there’s a new opportunity,” Darrow Smith said. “We really believe that we’re seizing on the opportunity because customer experience has to be key. Shopping has to be fun. We really work hard to give her great customer experiences. We know her by name. We work the style with her and we work to have a lot of events in the stores so it’s more interesting than just coming in and shopping.”