CAN MOM-AND-POP OUTFITS COEXIST WITH A MASS MERCHANT
Byline: David Moin
NEW YORK — Mayor Rudolph W. Giuliani seeks to accelerate the influx of superstores, such as Kmart, Caldor and Sears, to the city through a rezoning plan. Giuliani thinks there’s room for 50 such stores, which he claims will stimulate the economy and increase jobs.
“The net effect would actually help the development of small stores,” Giuliani said. Not everybody agrees. Some mom and pop outfits fear the new competition will crush them. Others don’t, but they fret over the possibility that the city extends special incentives to the retail giants, easing their entry to the city and providing competitive advantages.
In light of the controversy, WWD sampled retailers in the city for their opinions on the mayor’s plan and its impact on smaller stores. Peter Koch, owner, Town Shop, between 81st and 82nd Streets on Broadway, selling intimate apparel, lingerie, swimwear: “When Barnes and Noble opened a year and a half ago, it really spurred the amount of traffic that passes by and looks in our windows. Sales rose 8 to 10 percent at the time, and I can’t see any other reason for that.
“A small store such as ours can give the kind of service that no department store gives – deliveries, free alterations and attention in the fitting room. We will continue to survive and do well. These stores can only help us.
“Filene’s Basement is a different type of customer. Our customer is value-oriented, but not looking to buy on sale every time. We also have a constant flow of merchandise, whereas the Filene’s Basements might have odd sizes, such as a 38 double-D bra. They don’t have a range of sizes. They have closeouts, irregulars. Our customer wants first-quality merchandise. “I don’t think more big stores in the neighborhood would really hurt us. We’ve been in this business since 1936 and managed to weather a lot of things. It’s how you handle your customer. That’s the big difference. If a customer likes you and likes to shop in the store, even if it’s a buck or two more, they will pay, just for the service. We have built a better mousetrap here.”
Monroe Milstein, chairman of Burlington Coat Factory off-price chain: “There are some shops that will flourish and others that will come and go. Stores shouldn’t be affected if they are efficient. Generally, when we move into an area, we create more business. People are drawn to the area. Better and bigger merchants create more business. Generally, we have been doing well in New York City as any good merchant would do here. We can do well anytime we have reasonable rents so that we can maintain low prices. We haven’t gotten any breaks from the city.”
Jeff Cohen, vice president, Conway Stores, a local soft goods discounter:
“I think there is some good stuff here and some stuff that’s not so good. The plan will keep shoppers in New York, which will be good for everybody and create jobs. I’m not concerned about the competition. If the city offers special incentives or tax relief to other merchants, that puts us at a disadvantage. There are situations where retailers are given tax breaks for going into less-developed areas.
“We have a tremendous tax burden in New York City. We pay a huge tax on top of our lease rate.
“We’re kind of excited about Kmart [which is opening opposite Conway on 34th Street]. They do a lot of advertising, which will bring more traffic in the area. Kmart is much better in hard goods, but we are the soft goods kings in this city. They won’t beat us on price and selection.
Lee Mandelbaum, vice president, Certified Fashion Guild: “Most of the stores affected will be on the lower end. It will force the price issue. Some areas are underserved. In certain other areas, there is a heavy concentration of these [low end] stores, and there’s a lot of price undercutting.”
Aaron Cohen, owner of the two Grand Slam moderate women’s units, on Fordham Road in the Bronx and on Times Square:
“It’s okay as long as it’s an even playing field. But it would be unfair if the city gives them [superstores] some breaks — incentives to locate in the boroughs, tax breaks. That would give them the advantage to undercut us on certain items, with a shorter markup. We pay full price for everything.
“When Caldor opened three blocks away on the Grand Concourse, business dipped, then leveled off. It’s really hard to measure the effect. I’m not sure. It’s a very busy area, though there are some empty stores in this area now. There never used to be.”
Robert L. Mettler, president of Sears Merchandise Group: “Having a retail mecca in New York City [with more superstores] will have a beneficial effect on all retailers. I think a lot of things [in addition to zoning regulations] have to be relaxed for retailers to be successful. I’m not sure what the parking situation is going to mean to the stores, for example. But if New York City is going to continue to be a retail center, it has to make it easier for people to shop.”
Terry Folcik, assistant buyer, Easy Pickins, a moderate juniors chain:
“It can either be advantage or disadvantage. Kmart will bring more people into the city, and many will notice our name and find out, hopefully, that we have better prices. Our 34th Street store is a very good one, and it has a lot to do with Macy’s. People shop the streets. Kmart will absolutely help too. If they carry some of the same merchandise and it’s cheaper, we might have to restructure our markups. But we have loyal customers, tourists too, coming in on 34th.”