ALL IN THE FAMILY
MULTIGENERATIONAL RETAILERS OFFER THEIR SPECIAL TAKE ON THE BUSINESS.
Byline: Kathryn Hopper / Melissa Knopper
They are the survivors. The independents who have stayed in business for decades — even generations — in the ever-competitive world of retail. They have weathered economic ups and downs and witnessed the arrival and passing of trends and customers. Many of these independents are now welcoming second and third generations to the helm. As children and 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 strategies they are using to make sure they are around for future generations.
Theodore, Southern California
Herbert Fink doesn’t have time for golf. He doesn’t have time for lengthy vacations. In his nonstop effort to cater to the whims of upscale Southern California shoppers, he has to focus on his seven-unit business each day.
“This isn’t a business you can come and go in,” he said. “You have to keep on top of it all the time, everyday. You can’t afford to take a few months off. If you do, you can’t go back.”
Fink’s retail empire includes men’s and women’s stores on Rodeo Drive in Beverly Hills and men’s and women’s stores in Malibu. The company also operates women’s stores in Brentwood and Calabasas, as well as a casualwear, Caribbean-themed store in Malibu.
Fink grew up in a retailing family and never really considered doing anything else.
“I was born on the cutting table,” said Fink, whose father ran a variety goods store. Fink, who facetiously gives his age as 25, does admit to spending the last 50 years in the retail trade and doesn’t plan to retire.
“I’ll probably die in the saddle,” he said. “I do this instead of playing golf.”
The Fink family retailing tradition is carried on by his daughters, Leslie LeTellier and Lisa Davis. LeTellier manages the two Rodeo Drive stores, and Davis is the women’s buyer.
Asked what retail lessons he has imparted on his children, Fink laughed and replied: “They are the ones who teach me. They have their own ideas, but working with me, they know they have to do things the ‘Theodore Way.’ We have to because, after 50 years, we’ve become an institution.”
The “Theodore Way” includes catering to the area’s upscale clients who demand the latest looks. The store’s top lines include Dolce & Gabbana, Jean Paul Gaultier and Ann Demeulemeester. The stores carry a limited amount of accessories by the same lines and jewelry by Loree Rodkin.
Fink said “people weren’t in the mood to shop” after Sept. 11, so business suffered. He added, “If you know what you’re doing in the first place, who your customer is and what they want, then you’ll get through the tough times.”
Fink said retail has changed a lot in the 50 years he’s been in the business. For example, he used to have several mall locations, but moved out of the malls because his upscale clientele began veering toward neighborhood shops.
“With the exception of South Coast Plaza, the upscale customer in Southern California doesn’t really want to go to the mall,” he said. “Stores get tired, neighborhoods get tired. In this business, you have to be flexible; you have to be ready to move with your customers.”
Malouf’s, Lubbock, Tex., and Burlingame, Calif.
John B. Malouf recognized a market for upscale goods back in 1949, when he found out residents of his Lubbock, Tex., hometown 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 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 women’s labels such as St. John, Max Mara and Geiger, as well as men’s wear lines such as Brioni, Hickey-Freeman and Oxxford. The California store carries slightly higher price points, mirroring its posh suburban environs. The Lubbock store’s location allows it to carry a wider merchandise mix.
The company recently launched a Web site at maloufs.com, a project that was instigated by Sam Malouf. The Web site is strictly promotional for now, but an e-tailing component should be added within a year.
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: 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 admited that a Depression-era mentality can be a tough sell to the younger generation.
“They want to have a certain lifestyle,” he said. “They aren’t as willing to put the money back into the business. ”
Young retailers, he feels, face different challenges from 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 more when they travel. We have to work harder to make our store even more appealing, and to really court them.”
A chain of women’s apparel stores based in Dallas, Colbert’s has been managed by the Greenberg family since 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, who describes the current recession as “a mild dip.”
“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 said. Finding a niche in the competitive world of retail is a lesson Greenberg learned from his father and grandfather. Stores are stocked based on their individual market and will only carry lines such as DKNY and David Meister if the local department stores don’t carry them.
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. Colbert’s buyers also find less-carried looks at markets that 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 hardworking staff. “People make your company; you don’t make your company,” Greenberg said. “It’s the people you surround yourself with.”
The Village Set, Illinois
When Gail Zomick opened her shop, the Village Set, in Highland Park, Ill., 37 years ago, women were trying to emulate Jackie Kennedy, with prim suits and pillbox hats. Today, Gail Zomick, 62, is still outfitting Highland Park women, but the retail business has changed.
Now, her son, Guy, helps set a different, younger tone for the store. In the early days, the Village Set sold mostly dresses for casual daytime wear. “We’re bringing in more jeans and novelty tops,” said Guy. “The business has gotten a lot more sophisticated because we’ve gotten more European lines.” In recent years, the Zomicks have been moving in another new direction: mother-of-the-bride and prom gowns.
“We’ve definitely gone into more eveningwear, dresses, high-end suits and cocktail suits,” Guy said. Since the Village Set serves a very broad age range, from high school students to grandmothers in their 60s and 70s, the Zomicks can each draw on the perspective their age affords them toward running the store: Guy does most of the buying for the younger clients, while Gail keeps an eye out for lines that are more appropriate for her age group.
“We cater to a lot of different individuals in terms of age and the whole financial spectrum,” Guy said. “I think the generational [differences] in our business help with that a lot.”
Watching his parents run their store while growing up helped Guy develop an innate knowledge about the retail business and their specific North Shore market. For example, he said, women in the Midwest tend to go for conservative colors like black and navy, so he rarely buys anything floral. After working as an attorney for several years, Guy joined the family business when his father retired 12 years ago. His wife, Julie, helps out on the floor, and his cousin, Gary Kabins, runs their second store in Skokie.
According to Guy, small mom-and-pop operations have several advantages. First, the people making the buying decisions are also serving the customers out on the floor. That helps them identify trends more quickly and react to them faster. Guy believes this is what has protected the Village Set from post-Sept. 11th fallout. “If I have five customers come in asking for a peasant blouse, I can be on a plane to New York that week to order it,” he said. “The majors don’t have that kind of flexibility.”
Also, smaller shops like the Village Set are able to give customers highly individual, personal service. “If somebody breaks a zipper at 8 p.m. on a Saturday, they know where to find me,” he said. Of course, family businesses have their downsides, he added. Long hours are one drawback. And sometimes it’s difficult to leave the worries behind when you live and work together.
“We have a successful business because we work well together and we support each other,” he said. “There are a lot of tough decisions and a lot of heated debates, but at the end of the day, we all go to dinner together.”
Gail Zomick has seen many changes in the retail industry during her 37 years in the business. Before, women were more decisive about buying. “It’s harder now,” she said. “You wait and wait and they may have looked at something four times before they buy it.” Also, for special occasion outfits, a woman is more likely to bring in her husband to get his opinion than in the past. Styles have also changed a great deal, Gail said. “We used to sell a lot of short dresses and nice pantsuits,” she said. “Now, it’s very casual — lots of jeans and T-shirts.”
Gail admitted sometimes she doesn’t understand what sells to the younger generation. “A lot of times, I just have to cover my eyes when my son and daughter-in-law want to buy something,” she said. “But I just have to trust them, and usually they’re right.”
The biggest benefit to being in business with family is knowing that someone you trust is watching the shop, Gail said. “When I walk out of the store, I feel very comfortable, and I know they are going to do whatever they can for the business,” she explained.