A FAMILY AFFAIR
MULTIGENERATIONAL RETAILERS SHARE THEIR SPECIAL TAKE ON THE BUSINESS.
Byline: Kathryn Hopper
They are the survivors. The independents who have stayed in business for decades, even generations, in the ever-competitive world of retail, weathering economic ups and downs and seeing styles and customers come and go. Many of these independents are now welcoming second and third generations at the helm. As grown children and even grandchildren join the family business, they bring their own kind of expertise, from launching Web sites to finding new lines that appeal to younger shoppers. Here are the survival stories of several independents and some of the steps they’re taking to make sure they’re around for future generations:
A chain of women’s apparel stores based in Dallas, Colbert’s has been managed by the Greenberg family since the they purchased the company in 1948 from its founders. Although the company grew to 27 stores in the Sixties, today it operates 11 locations, ranging from 6,000 to 13,000 square feet, in cities including Dallas, Atlanta, Memphis and Jackson, Miss.
President David Greenberg, who’s part of the third generation of retailing Greenbergs, said the company is eyeing Laredo, Tex., and Mobile, Ala., for possible expansion. “Right now is a great time to be looking,” he said. “I’m in this for the long term, so I negotiate when things aren’t at their peak.” Greenberg typically looks for strip mall locations, as opposed to megamalls, which he said are too expensive. Colbert’s closed many of its mall locations in the late Seventies and early Eighties because rents were too high. “Now malls are begging for tenants,” said Greenberg.
“Things go in cycles. You have good times and you have bad. Today, the hardest thing we have to do is keep our core customers, women from age 40 to 60, and to keep growing,” he added.
Colbert’s discovered that hats were a category that had been largely abandoned by the majors, so the store beefed up its assortment with extensive in-store displays, pairing elaborate hats with coordinating dresses and suits. “We found that market and have become one of the largest hat retailers in the country,” he said, noting that many women purchase the store’s hats to complete a church-going outfit. Colbert’s buyers also find less-carried looks at markets others bypass, such as Toronto and Montreal. “Places other buyers think are a waste are really not at all,” said Greenberg.
Like other retailers, Colbert’s has struggled in the post-Sept. 11 environment. Greenberg said sales in 2001 had seen single-digit drops. Spring sales have been spotty, with some Colbert’s units enjoying gains and others still struggling.
Greenberg attributes his company’s survival to his hard-working staff. “People make your company, you don’t make your company,” Greenberg said. “It’s the people you surround yourself with. The real business is done on the sales floor.”
John B. Malouf recognized a market for upscale goods back in 1949, when he found out residents of his hometown, Lubbock, Tex., were traveling to Dallas — a good 345 miles away — to buy designer looks. Malouf’s eventually grew to 20,000 square feet of selling space.
Ten years ago, John Malouf opened a second, 8,500-square-foot store in Burlingame, Calif., managed by his son, Sam. The stores had a combined annual sales of $8 million in 2001, slightly down from the previous year, which Malouf attributes to a slowdown in west Texas’s agriculture business and the Silicon Valley dot-com bust.
Both locations offer such women’s labels as St. John, Max Mara, Geiger and David Yurman jewelry, plus men’s wear lines such as Brioni, Hickey-Freeman and Oxxford.
The company recently launched a Web site at maloufs.com, a project that was instigated by Sam Malouf. The only delay in launching the site, said Malouf, came about because it took over a year to give the site a design that was as sophisticated as the store’s. The Web site is strictly promotional for now, with an e-tailing plan in the works.
Malouf’s also relies on STS software, which John Malouf calls “the Cadillac of systems,” to keep track of consumer data. Malouf said installing the software was one of the best business moves he ever made because it allows him to target his advertising: Recently, he sent out 500 St. John mailers to shoppers who had previously bought the line. The software has more than paid for itself, he added, and he is installing an upgraded version later this year.
John Malouf said one of the top retailing lessons he wants to teach his son Sam is to keep debt to a minimum. But he admits that the Depression-era mentality can be a tough sell to the younger generation.
“They want to have a certain lifestyle,” he said of younger retailers. “They aren’t as willing to put the money back in the business.” Young retailers, he feels, face different challenges than the ones he did. “Today’s customers aren’t as loyal as they used to be,” he said. “Our most loyal shoppers used to give us 90 percent of their business, but now it’s only 60 percent. That’s because they are shopping for entertainment and when they travel. We have to work harder to make our store even more appealing, and to really court them.”
“This business is energy and creativity,” said Lester Melnick, who owns three eponymous stores, all in Texas: one each in Dallas, Fort Worth and Plano, with a fourth under construction in Plano. “You have to give people a reason to come in. People come here because we know them; we know their sizes, their colors and what’s already in their closets.”
Melnick got his retail education at Neiman Marcus, where he spent 10 years rising from floor manager to coat buyer to assistant merchandise manager during the Fifties and Sixties. He left to start his own store in 1962 and used tactics he learned from mentor Stanley Marcus, such as luring customers with festive in-store events, like South Seas-themed parties, for which daughter Leslie Diers, now president of the family-owned chain, was put to work stringing leis.
Though her lei-making days are long over, Diers is still helping out dad. The only one of his three daughters to enter the business, Diers said her father’s energy and affection for the trade is infectious. She tries to complement his years of experience by helping him target an important customer: The working mother in her 40s.
“We’ve survived by changing with the times,” said Diers, a mother of two. “Our customer has been a woman my mother’s age. We need to change to serve a new generation.”
To that end, the Lester Melnick stores are adding contemporary departments called “Leslie’s, stocked with lines such as Laundry by Shelli Segal and Tessuto. And to better serve working women and harried moms, the north Dallas Lester Melnick, the company’s flagship, recently extended its hours.
Melnick’s grew as the north Texas economy boomed, at one time operating a dozen shops in the region. The Seventies arrival of malls and more department stores killed off many of the city’s independent specialty shops, but Melnick’s survived.
Melnick said the current economic climate and the competitiveness of the retail business has made it tougher than ever to be a specialty store. He said it’s difficult to compete with major chains that enjoy price breaks from manufacturers and meet consumers’ demands for discounts.
“You have to battle people’s perception of ‘Why pay retail?”‘ he said.
Despite the challenges, Melnick sees opportunities, too, and is opening his fourth location later this year in Plano, to serve the growing number of potential customers moving into the town’s mixed-use Legacy development.
To compete with the majors, Melnick works to offer exclusive lines such as Yansi Fugel, Ann May and Basler. In the past year, Melnick’s has also added perfumes by Jean Laporte and the michaelmarcus cosmetics line by Dallas makeup artist Michael Shoemaker.
In February, the Dallas flagship in the Preston Royal shopping center welcomed Sebastian Ahmadi as its in-store shoe retailer.
Those additions work with the flagship store’s fur department and beauty salon to provide one-stop shopping for women preparing for a big night out. It’s a strategy both Melnick and Diers say is necessary to serve their time-pressed customers.
Melnick said the Preston Royal store recently got a boost when a Chico’s opened up in the same center, drawing more traffic. He noticed, though, that Chico’s continued to draw shoppers after Melnick’s doors closed at 6 p.m. That observation, coupled with a decline in Saturday customers, prompted Melnick last month to extend store hours until 7 p.m. As a result, Melnick said traffic hadn’t increased that much, but the shoppers who came in just before 6 p.m. didn’t feel as rushed.
“My salespeople aren’t trying to get them out the door,” he said. “It’s going to be an evolutionary thing. But it’s something we have to do to reach busy women who don’t have time to come in on Saturdays anymore.”
Barbara Abdalla Black is the third generation to operate the Abdalla’s department store business in Lafayette, La. Founded by her grandfather 106 years ago, the company at one time had as many as five stores, including locations in neighboring New Iberia and Abbeville, but today operates one 30,000-square-foot store in Lafayette. Black is the only family member still in the department store trade.
“The thing that keeps us successful is being locally owned and being a part of the community,” Black said.
In the Seventies, the store had to begin competing with the influx of department stores and the development of two malls.
“For years, we were the department stores here,” Black said. “But as chains came in, we had to become more like a specialty store and offer services you can’t find at other department stores.”
That includes alterations, gift-wrapping, delivery and wardrobe consulting. Black is also tweaking the merchandise mix and recently added more home and gift items in time for Mardi Gras.
Black said having a unique assortment is pivotal for her store. When she saw bridge lines such as Ellen Tracy, Dana Buchman and Anne Klein picked up by department stores, she stopped buying them.
“Lafayette is a small town,” she said. “People don’t like to see the same thing everywhere, especially if they are paying bridge prices. We had to get out of those lines and find something exclusive.”
Abdalla’s has clung to one family tradition that dates back to its beginning: The store is closed on Sundays except during the Christmas shopping season. “If shoppers really want to be here, they’ll come on Saturday,” she said.
Betty Thrasher, owner of The Rosebud in Temple, Tex., grew up watching her parents run a dry-goods stores, a furniture and variety shop and a uniform outlet in the small town of Rosebud, about 27 miles east of Temple in central Texas. But she didn’t acquire her own store until the age of 50. (Previously, she’d been in the wholesale cosmetics business.)
“I loved fixing people up, so I decided, ‘Why not have a store because I’m doing it anyway?”‘ she said.
In 1979, Thrasher opened a small store in Gatesville, about 38 miles west of Temple, and was satisfied with the location until a friend picked her up from work and told her, “I’ve found your new store.” It was located in the larger town of Temple, where her friend convinced her there was an untapped market of shoppers who had the income, but not the access to the latest looks.
The Rosebud’s lines include Ilde Marshall, Zonda Nellis and a private-label line of linen goods for spring and summer. Thrasher doesn’t give out her sales volumes, but said business has increased each year, even when the local, agriculture-based economy was hurting.
Like many retailers, Thrasher has struggled since Sept. 11. She’s responded to the dropoff in business by increasing her promotions, doling out champagne to Friday-afternoon customers and has held “Margaritas and Markdowns” events.
“It’s all about having fun, coming and seeing your friends and maybe buying something that makes you feel great,” she said. She keeps in touch with customers via twice-yearly newsletters that resemble handwritten notes and credits her retailing family and small-town background for teaching her the importance of personal relationships.
“You have to be compassionate, care about people, learn their names,” she said. “I learned to care about people. Today, I’m concerned people don’t care as much about each other, but we need to.”