PAUL HARRIS NAME SOLD
Byline: Vicki M. Young
NEW YORK — Life, it seems, will go on for the Paul Harris Stores name.
Charlotte Fischer, the former chief executive of the defunct retailer, has acquired its name and disclosed her plans to reintroduce the specialty chain in an interview with WWD last week. Fischer joined Paul Harris in 1993, but left in March 2000. As reported, Paul Harris Stores Inc. ultimately filed for Chapter 11 in October 2000 and then was forced to liquidate in March.
While dividing her time between relaxing at home in Florida and spending time with her three grandchildren, Fischer began looking for businesses that she could buy. When the opportunity arose to purchase the Paul Harris trademarks while the company was in bankruptcy, Fischer pounced, securing the rights at the end of May for what she believes is a paltry $43,000.
“I didn’t think I would get it for so little, but that’s because you don’t know what somebody else would do. My view is that if you wanted to buy somebody and put it on the map, the name is what you go after. I thought the Paul Harris name would go for at least six figures. What I didn’t expect were just two bids,” Fischer said.
The initial bid was $25,000 by her successor at the specialty chain, Glenn Lyon. Fischer’s first bid was $32,500, and after an additional bid by her sole competitor, she walked off with her prize. “After it was over, because it happened so fast, I thought, ‘Did I not pay attention? I’m probably not going to get this.’ The next thing I knew I had it. I really wanted it. I love my company,” she said.
Of course, now Fischer’s work is just beginning. Most of the leases for the former Paul Harris store sites are back in the hands of landlords. Fischer is negotiating with many of them to secure the leases so she can reopen the sites as new Paul Harris locations. Her plan is to reopen 10 sites, mostly in the Indianapolis area, in time for the 2001 holiday sales season. After that, she’d like to start branching out into adjacent states — Illinois, Iowa, Pennsylvania and Maryland — and open up to a total of 250 stores in former Paul Harris locations. At the time of its Chapter 11, Paul Harris operated 290 full-price stores and 26 outlets across 28 states.
According to Fischer, “It costs a minimum of $225,000 to build a store from scratch, but it takes only about $100,000 to reopen an existing store. For us, the startup costs would be low because of the existing sites. However, we need to be fast-footed before those locations get leased to someone else.”
The average store size is 4,500 square feet, and current business plans provide for a cost analysis of $5 million for every 50 stores opened. Fischer said she’ll need a minimum of $25 million to realize her dream of a 250-unit store base.
“We bought the rights to the name and trademarks at the end of May. In the six weeks since, I have been pursuing every avenue of capital that exists,” Fischer said. She declined to disclose how much is already in her coffers for the project, but said that additional funding from investors is available. The problem, she told WWD, is connecting with the right investors who understand the vision of her management team.
One thing upon which Fischer’s not relying is the $2.5 million in severance still owed to her from when she left the old Paul Harris operation. “I’ll never get that. I am the largest single creditor in the bankruptcy, and I could use the money [for the new Paul Harris]. But it’s not likely that I’ll get it, so I’m not counting on it,” she said.
What Fischer can count on is help from members of her former management team. Those who have jumped on the Paul Harris revival bandwagon include: Gary Nagle, former senior vice president of logistics; Keith Himmel, former chief financial officer, and Eloise Paul, daughter of Gerald Paul, the chain’s co-founder who lured Fischer into the corporate fold in 1993 from Claire’s Stores Inc. She is also in contact with former staff members from back-office operations to sales associates, all standing by and ready to spring into action whenever they get her go-ahead to proceed to the next step.
The new and improved Paul Harris that Fischer envisions would target the same female customer between ages 25 to 45, most likely a working mother who is not a high-fashion customer. However, she wants the right wardrobe that covers figure flaws and provides enough versatility to take her from work, car pooling with her kids and dinner with her husband, Fischer said.
Similar formulas addressing the notoriously underserved misses’ customer have helped propel specialty chains such as Chico’s FAS, Talbots and Christopher & Banks to the top of the current specialty retail class.
In the former Paul Harris operation, much of the merchandise was sourced offshore. For now, the reborn Paul Harris will rely on domestic contacts until it “reaches a [certain] critical mass.”
The smaller operation will also allow Fischer to consider new approaches to the merchandise mix. “Years ago we had a vendor day when everyone paraded in our office showing us their product. Now we can inject some new private label and a different fashion content for newness. Why couldn’t we incorporate new people with growing companies looking to get their businesses off the ground?” she said.
The old Paul Harris’s success in its heyday was based on a formula mix of 89 percent apparel and 11 percent accessories. The new Paul Harris Stores will likely keep the same percentages, but the apparel component would include casual careerwear and denim categories that the company exited after Fischer left the firm. She is also looking to bring back the third-party private label credit card program, set up a Web site for information purposes and contract with a catalog operator to run the Paul Harris catalog business. “We have a mailing list of 650,000 from our old Paul Harris catalog operation. Catalogs are a cost-effective way to market our name, and we have to get our name back into the market as fast as we can,” she noted.
While Fischer acknowledged how difficult her plan may be, given the current retail environment and economic conditions, she remains undaunted.
“The economic opportunity doesn’t always present itself at the perfect moment, and retail is never easy. There are good times and bad. However, we are moving on a lot of fronts. It is very exciting. The challenge is the thrill of it. You need to march to a mission, and this is my mission,” she said.