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New Concepts: Five to Watch

BY Al Urbanski

New concepts remain the lifeblood of retail. A child- and mom-friendly apparel specialty store, two Canadian imports, an iconic 102-year-old brand and a Polish cosmetics giant are among the latest companies looking to make their mark on the nation’s retail scene. The five up-and-comers are profiled here.


HOT MAMA: A frustrating shopping experience—aisles and fitting rooms hard to navigate with a stroller, clothes that didn’t quite fit right and not very helpful associates—convinced new mom Megan Tamte that a gap existed in the women’s apparel marketplace. That gap gave rise to Hot Mama, a retail concept dedicated to helping moms look good — and to providing them with a comfortable shopping experience from start to finish. 


Tamte and her husband, Mike (who currently serves as CEO and chairman), did a lot of research before opening the first Hot Mama in 2004, in Edina, Minn. All the planning paid off: The company has blossomed. It currently has spread to 17 Midwest locations.


Aggressive expansion plans call for 10 new stores this year and 14 next year against a goal of 50 by 2014.


“Our intent is to become a national chain,” said Kristina Klockars, VP, Hot Mama, Edina, Minn. “We are comfortable with four-season buying, so we’ll start growing in the North. Then it’s on to three-season states, then further south. You’ll most likely see us in Texas and Arizona in three years.”


Hot Mama feels the time is right for a national expansion. 


“We don’t believe that we have any competitors, that is, retailers who are specifically targeting moms,” Klockars said. “Nordstrom and J. Crew target women in their 30 to 40s, but not moms specifically. There is a big, gaping hole in the marketplace.”


Hot Mama seeks to fill that need in the trend with stylish clothing and accessories that work for a variety of ages, lifestyles and figures. As Megan Tamte found out back in 1997, new moms usually must bid adieu to their pre-baby bodies.


“When we do buying, we look for different qualities, different body types. We have to look at cuts that minimize the presence of larger bellies or bigger butts,” Klockars explained. 


Hot Mama considers itself a boutique. The sweet-spot range for spring tops is $58 to $78. Denim is a big seller, with an average price point of $135. Sales per square foot tally around $450. 


Hot Mama deals in such national brands as James Jeans, Hudson and Lulumari. But the company plans to introduce private-label brands once store proliferation lifts volume enough to make it feasible. Maternity wear accounts for about 10% of the mix, but Hot Mama is dropping it in new stores to more sharply focus its identity.


The store experience is all about moms’ needs. There are play areas for kids in close proximity to dressing rooms, which are extra-wide to accommodate strollers. While the store associates may not be necessarily mothers themselves, they are schooled in aspects of motherhood. > 


“They are trained to assess body types, age and lifestyles when customers walk through the door and start pecking off possible items in their heads immediately,” Klockars explained. “Moms often stop at the store in between kid drop-offs and don’t have much time.”


New stores will keep with the current 2,500-sq.-ft. footprint, but interiors will morph from Northern rustic to suburban sophisticated. Its gray walls and cherrywood fixtures will be replaced by creamy hues and hot metal. The retailer’s signature touches of red will be retained.


“We’re going lighter and brighter, posh-ing it up a bit while keeping it grounded and casual,” explained director of visual merchandising Amy Schmitt. “The floors will be a lighter color, for instance, but still distressed and with a soft sound.”


Hot Mama debuted its updated look with the recent opening of its store in Lone Tree, Colo.


ARITZIA: While Target and other U.S. retailers expand northward, a stylish Canadian import has come stateside. The brand, Aritzia, which specializes in on-trend fashions for women ages 18 to 35, has big plans. 


The vertically integrated company is headed by Canadian retail veteran Brian Hill, who started his career at the Vancouver department store — Hill’s — his grandfather founded in 1914. (The store is still in the family, and is operated by Hill’s father and brother.)


“Customer service and fashionable merchandise are an essential part of Aritzia and, as a result, our sales per square foot are among the highest in our category in Canada and in the top quartile in the U.S.,” said Hill, CEO, Aritzia, Vancouver, which operates 48 stores, including eight in the United States. 


Some 80% of Aritzia’s stock is exclusive, with in-house design teams dedicated to various labels ranging in price and positioning. Designer brands, including Marc by Marc Jacobs, J Brand and Rag & Bone, make up the remainder. 


Aritzia’s average sales per square foot exceed $1,500 in Canada — well above industry average — and they do not appear to be lagging far behind in the company’s U.S. locations. Aritzia reports same-store sales gains topping 30%, with such locales as San Francisco, Chicago and Short Hills, N.J., ringing up 70% increases in recent months.


“We brought something to the party that was needed,” said Sally Parrott, VP marketing, Aritzia. “The U.S. market is ripe for new retail concepts. There are not a lot of new ideas in our category.“


Parrott added that while fast-fashion retailers such as H&M and Topshop have thrived in the recession, Aritzia succeeded in tapping women’s desires for added sophistication and quality, with prices that range from $40 tops to $400 leather jackets.


“Aritzia is aspirational,” Parrott explained. “It’s giving younger women who’d like to shop in boutiques a taste of sophistication but at an affordable price.” 


Aritzia will unveil its flagship U.S. location, a 10,000-sq.-ft., two-level store at Broadway and Spring Street in Manhattan’s SoHo area, this summer. 


“We intentionally moved into the U.S. slowly,” Parrott said. “We wanted to get our proposition right before we moved into Manhattan.”


Adding to the company’s appeal is that no two Aritzia stores are exactly alike. Interiors favor natural woods and original art produced by a staff of in-house artists and designers. The stores are known for funky signage; indie rock soundtracks; and irreverent, wildlife-inspired window displays, such as flying cats and space reindeer.


“We try to build stores that are in tune with what’s going on with the people, to connect people with the energy of the culture,” CEO Hill said. “We spend a lot doing it, north of $300 per square foot. We don’t want to wake up one day and find our stores out of date.” 


Aritzia’s future growth will be pegged on the United States, where it is on the hunt for real estate. The chain’s focus is on prize locations in urban markets and footprints of 4,000 sq. ft. and up.


“We are actively looking for opportunities in the U.S. but will be selective,” Hill added. 


JOE FRESH: “I’m shocked that Joe Fresh hasn’t invaded the States yet,“ wrote Web blogger Susan C. of Brooklyn last year after visiting a Loblaws in Canada. “Their clothes are cuter than the Gap’s and about half the price.”


As it turns out, the Brooklyn blogger will soon be able to shop Joe Fresh stateside. The brand, an in-store apparel shop housed in hundreds of Loblaws supermarkets throughout Canada, is headed south of the border. > 
First stop: Midtown Manhattan, where a 20,000-sq.-ft. Joe Fresh flagship opens this fall.


The brainchild of Joe Mimran, founder of Club Monaco, Joe Fresh offers T-shirts, pants, skirts, jackets and activewear with a focus on women, but for men and children as well. All items retail for less than $59.

The brand also boasts its own cosmetics line, Joe Fresh Beauty, which includes foundations and more than 60 shades of lip and eye products. Prices range from $4 to $8 for makeup, and $2 to $16 for brushes and accessories. 


The Manhattan flagship will not be Joe Fresh’s first freestanding store. Maxed out in the supermarkets and sensing wider appeal for the concept, Loblaws opened a 14,000-sq.-ft. Joe Fresh stand-alone store in Vancouver last fall that will serve as the model for expansion. The plan calls for 20 more stores in Canada in the coming year. But it is in the United States where the company sees Fresh reaching fruition. Mimran, who declined to be interviewed for this article, has been quoted as saying he envisions as many as 800 U.S. locations.


Along with its value prices, Joe Fresh offers wide aisles, clearly marked pricing and sizing, and colorful merchandise treatments. Also, shoppers are free to take as many items as they please into its extra-large fitting rooms.


At the Joe Fresh Vancouver store, huge windows fill the two levels that separate women’s sportswear and accessories on the main floor from men’s, women’s active, women’s sleepwear and intimates on the second level. Neutral interiors allow gray clothes to shine in a modulating spectrum of color. Items are displayed on Parsons tables and a powder-coated metal wall system. 


The store design, by interior design firm Burdifilek, Toronto, should transfer well to the New York City site, a glass, aluminum and steel box built in 1953 for Manufacturers Hanover Trust. The building was one of the first “transparent” structures of the International Style erected in the United States.


“It was vital for us to find a unique location for our first U.S. store,” said Mimran, who serves as the brand’s creative director, in a press statement. 


No subsequent U.S. locations have been identified. For now, company execs prefer to concentrate on The Big Apple.


“We can’t wait to see the reaction from those new to the brand when they first see our style, feel our fabrics and appreciate our value,” said Lucy van der Wal, who is heading up the stand-alone store division. 


CONVERSE: In show biz, old stars wind up playing grandparents on TV sitcoms. In shoe biz, old stars are applauded as hip, cool icons on Broadway. 


That is, of course, if the star is Converse, which recently opened its second freestanding store ever, on Lower Broadway in Manhattan’s SoHo district. The 102-year-old company — now a subsidiary of Nike — has been developing its store concept for five years. The design builds a story of heritage, Americana, and urban chic around the old playground warhorse of the ’60s and ’70s. An American flag constructed of hundreds of red, white and blue Chuck Taylor All-Stars greets shoppers at the entrance. 


“Go to an ad agency and they’ll ask you what’s your brand about, where’s your brief? We just hand them the Chuck Taylor and say, ‘There you go,’ ” said Steven Horn, the company’s director of global retail development who oversaw the design of Converse’s first-ever freestanding stores. (The first opened last fall on Newbury Street in Boston.)


Reminders of Converse’s heritage abound in the 7,000-sq.-ft. New York flagship. Old photographs in rough-hewn wooden frames show basketball legend Julius Erving airborne in his Chucks, rockers wearing multi-colored variations of the classic, and a bespectacled James Dean lounging with his feet up, displaying the signature soles of his Jack Purcells.


“Our brand was born in basketball and raised in rock and roll,” Horn said. “It’s a democratic brand. It transcends all ages and groups — the jocks, the artists, the rock-and-rollers, cool and nerdy alike.”


Underlying universal appeal as a theme in the New York store is a foundation of urban hipness. White subway tiles on the walls pay homage to the New York City subway system. Recycled wood flooring and other elements create a feeling of authenticity.


Prices are handwritten on duct tape and slapped on walls and bottoms of sneakers. Ladies’ tops and men’s hoodies and plaid shirts are $58. Jeans are $78 and come in three fits for each gender — slim, rocker and classic for women. > 


The subway tile gets a cathedral ceiling treatment in the shoe department, where Chucks and Jacks are displayed on wooden bleachers taken from an old high school gymnasium. The salespeople, outfitted in baggies and hoodies, give an added dose of street-cred to the brand.


The store features what it calls the largest selection of Converse footwear in the world. The merchandise mix also includes the brand’s new collection of women’s and men’s apparel and accessories, ranging from denim to outerwear to graphic tees. 


The store also allows shoppers to customize both footwear and apparel to their own liking. Hundreds of designs are available from iPads at the counter, and customization “Maestros” manning ink-jet printers at the rear of the store help customers tattoo their own high-tops and apparel. Designs start at $30 for one side of the shoe, $45 for two.


“People have been customizing Chucks on their own for ages; now we’ve brought it into the 21st century,” Horn said. “It’s the great thing about having our own stores. For the first time, we have the ability to express and showcase our brand through our own lens.”


Converse would not disclose plans for future locations at press time. But the company reportedly plans to invest in retail going forward. 


INGLOT: The Polish are coming — and they have their sights set on the lucrative U.S. cosmetic market.


Inglot Cosmetics, a vertical company that makes 95% of its product in Poland, is a 240-store global chain founded 20 years ago by Polish chemist Wojtek Inglot. The brand tiptoed into America in 2009, opening in Fashion Island in Newport Beach, Calif., Forum Shops in Las Vegas, and Times Square in Manhattan. Several additional locations followed. 


The company is looking to carve out a small piece of the $60 billion-plus U.S. beauty market that has been left on the glass display case by department stores.


“Inglot is looking to fill a void for color in the cosmetics market, and at prices about 20% lower than MAC,” said Alan Napack, senior director of retail services for Cushman & Wakefield in New York City, which is directing the Polish retailer’s move into the United States. 


Inglot is betting on its sleek shops, colorful offerings and accessible prices to win over consumers. The stark black and white hues of its stores, which run from 500 sq. ft. to 1,000 sq. ft., draw attention to the colorful cosmetics displayed openly on lacquered display tables. 


Salespeople, all trained cosmeticians, help shoppers build custom-color palettes employing the company’s “Freedom System.” Inglot is famed for its breadth of colors, with some 165 shades of eye shadow, 90 of lipstick, 29 of blush and 21 of pressed powder available for mixing and matching. 


Freedom and lower prices may well serve as an enticement to cash-strapped young shoppers. One recent visitor to the Times Square location, a makeup artist, reported paying only $25 for the Freedom palette and five pigments. 


Inglot has hundreds of U.S. locations on the drawing board within the next five years, both company-owned and privately run. The bulk of its stores worldwide are run by independent operators through licensing agreements.


Cushman & Wakefield’s Napack said Inglot is currently considering several deals to open licensed stores in smaller markets. But the company intends to keep control of stores in major metro areas.

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Leave a Reply

S.Anderson says:
Mar-14-2013 09:30 pm

If we take a look at how many shopping options we have today few guidelines and reviews are most welcomed. I wish I had them in for my city shopping centers and brands. I admit that I need serious help when shopping for perfumes, it's overwhelming to make a choice, I always ask for in-store support.

S.Anderson says:
Mar-14-2013 09:30 pm

If we take a look at how many shopping options we have today few guidelines and reviews are most welcomed. I wish I had them in for my city shopping centers and brands. I admit that I need serious help when shopping for perfumes, it's overwhelming to make a choice, I always ask for in-store support.

B.Brent says:
Nov-30-2012 03:25 pm

If the timing is right, then expansion should be pursued. A lot of factors is to be considered. But if you are a businessman, you have the gut feeling when to carry this out. - James Stuckey

B.Brent says:
Nov-30-2012 03:25 pm

If the timing is right, then expansion should be pursued. A lot of factors is to be considered. But if you are a businessman, you have the gut feeling when to carry this out. - James Stuckey

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Checkouts Go Digital 


BY CSA STAFF

Retailers over the years have created smartphone apps to help shoppers find stores, research products and look up reviews. Now merchants are readying for a new app trend that is expected to take the industry by storm: Paying for in-store purchases via mobile devices.


Seattle-based Starbucks is leading the way by allowing customers to check out with select handheld devices, from the Blackberry to the iPhone and iPod Touch.


The retailer ran a successful pilot program in Seattle, Northern California and New York in September 2009. In January of this year, it introduced a national mobile payment program to its 6,800 U.S. company-operated locations and more than 1,000 of its stores within Target. The move was part of an effort to expand on its digital media strategy, as well as its wildly successful pre-paid Starbucks Card program. 


“Starbucks customers told us they wanted a faster, more convenient way to pay for their Starbucks purchases,” said Brady Brewer, VP of Starbucks Card and Loyalty. “Our Starbucks Card Mobile App provides them with an easy way to make purchases and manage their Starbucks Card accounts with their mobile phone.”


To pay via a mobile device, smartphone users must first download the Starbucks Card Mobile app, which links to their Starbucks card account. Similar to how a gift card would be handed over at checkout, customers show the cashier a bar code that resides within the app. After the bar code is swiped with a scanner, the transaction is complete and the app is updated in real time with a new remaining balance. 


In the first 30 days of the launch, more than 1 million mobile payments were made with the new method, and a whopping 3 million active users to date have paid for their coffee drinks and other items with the app. Starbucks chairman and CEO Howard Schultz announced at a shareholders meeting that the company has the largest mobile payment network in the United States. 


According to Richard Crone, CEO and founder of San Carlos, Calif.-based Crone Consulting LLC, most new payment types start with merchant acceptance, and mobile payment will be no exception.


“Big retailers are the sleeping giant in the mobile payments race, and there’s so much potential for growth,” Crone said. “For example, the average household has over five unused gift cards, totaling about $100. Since people rarely leave home without their phone. The Starbucks Card Mobile app is so convenient for customers. Plus, people are already using smartphones in stores, so it’s a natural progression to use them to make purchases.”


Starbucks customers loaded more than $1.5 billion on Starbucks Cards in 2010, up 21% over 2009, and according to the company, this success was driven in part by the My Starbucks Rewards program, which provides benefits to customers who pay with a registered Starbucks Card at participating stores. 


Another coffee chain is also testing a mobile payment solution. Denver, Colo.-based Dazbog Coffee — which sells gourmet specialty coffee drinks — recently launched similar technology in 16 of its 28 locations in six states: Arizona, California, Colorado, Maryland, Texas and Wyoming.


“Since the technology is still so new, getting customers to understand how easy it is to use on phones has been a challenge,” said Leo Yuffa, CEO of Dazbog. “But overall, consumers seem ready for it. Once they understand how simple it is, they love the convenience.” 


In addition, Minneapolis-based Target Corp. offers a mobile app for uploading gift cards onto mobile devices that can be used in its 1,755 U.S.-based stores. 


To avoid paying costly fees on new hardware, more retailers are looking at these software-based mobile payment methods. In order for customers to tap smartphones themselves at checkout (and not use apps), mobile providers first have to install contactless chips in the hardware of devices, and this can be as pricey as $100 to $200 for each register.


“The technology is also charged at higher card-not-present interchange rates for transactions,” Crone said. 


Starbucks seamlessly implemented the program because it already used bar code readers in stores, so the program could build off of its existing hardware. Software that doesn’t require bar code scanners will debut later this year. 


“Embracing mobile payments should be on every retailer’s radar, but it shouldn’t be rushed,” Crone said. “Merchants should take time to select the best solution for their needs.”

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J. Crew to expand DC to support international expansion

BY CSA STAFF

New York City — J. Crew said Tuesday that it plans a $20 million expansion of its Lynchburg, Va., distribution center to facilitate the retailer’s goal of selling more clothes overseas.

According to a report in the Lynchburg newspaper News & Advance, J. Crew is slated to open its first store outside the tates and start shipping orders to Europe by the end of 2011. Those orders will be filled at J. Crew’s facility in Lynchburg.

“We plan to ship to all those countries, and eventually ship to the world, from this distribution center right here in Lynchburg,” J. Crew’s CFO Jim Scully said in a ceremony Monday in Lynchburg.

J. Crew has operated a DC in Lynchburg since 1986, and has expanded the original building twice, said Tony Brown, senior VP of global supply chain for the company. “In the last seven years alone, we have added over 500 jobs to the local Lynchburg community in our existing building,” Brown said.

The expansion will include a new 155,000-sq.-ft. building ready next year.

“In the next three to five years, we think we can double the size of the business again,” Scully said. International markets are a key part of the company’s growth strategy. Currently, J. Crew ships orders to the United States, Canada and Japan. At the end of 2011, it will start shipping to the United Kingdom and other European countries.

Also, J. Crew plans to open a retail store in Canada in the second half of this year.

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