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Sunday, June 23, 2013

Old Jewish Retailers
Posted by Jill | 11:07 AM
I can remember when you could go to a store that sold "foundation garments" and actually get fitted for a bra. You'd hate it, but there would be a middle-aged Jewish woman there who knew every single bra there was in the store. Half the time she'd be able to look at your boobs in your T-shirt and know exactly what you needed. And she wouldn't let you leave the store until you had exactly the right bra, that wouldn't ride up in the back, where the straps wouldn't fall off your shoulders, that wouldn't gap in the front or in the cups. She might tell you that you needed "a little girdle" too if you had a bit of a tummy. Sometimes she'd be like a drill sergeant, other times she'd be like someone trying to fix you up with her nephew who is such a nice buy and a pre-med student. There are still a few of those stores, like Olga's in Brooklyn and WOB (Wizard of Bras) in Oradell, NJ. But most of us walk around in bras that are too small, too large, too tight, worn out, and just plain don't fit properly. We may have hated these trips to the corset shop, but those women did right by us.

For mens' wear, there was a similar dynamic. Here in New Jersey, the big name was Schlesinger's, which closed in 1985, 66 years after its founder, Sidney Schlesinger, opened it. The location is now a Modell's, since Schlesinger had insisted that anyone buying the store had to run it in the way he did. Every guy who bought a suit at Schlesinger's looked like a million bucks. It didn't matter if you were short or fat, if you had broad shoulders or narrow one, by the time you got your suit away from Schlesinger's tailors, it fit like a custom suit.

Downtowns used to be full of this kind of store. My grandmother had one for a while. These were businesses started by first-generation Jewish immigrants who knew "a nice piece of goods" when they saw it. I don't know what it is about Jews and the garment industry, but there sure were a lot of us in it, both at the wholesale and retail level. Allan Sherman even did a song about Jewish dry goods guys -- "The Ballad of Harry Lewis", which about 1:20 into the interpretation below, contains one of the greatest puns in parody song history:



There aren't many stores anymore that offer the kind of personal service the old ones did. Today you go to Old Navy and buy some schmatte made by exploited people in the developing world making fifty cents a day. It holds up for a season, and then you throw it out and buy something new next year. But there are still relics of the old "quality and service at a fair price" doctrine.

One of them was Mens Wearhouse, a chain famous for its TV spots featuring the company's gravelly-voiced founder, George Zimmer, with the tagline, "You're going to like the way you look...I guarantee it." For some reason, Zimmer was forced out of his position as executive chairman of the company last week. No reason was given, and the move left many heads scratching, because the company had just enjoyed a first quarter profit increase of 23 percent. What we do know is that the founder shares his name with the first three syllables of the man going on trial this week in Florida for the murder of unarmed black teenager Trayvon Martin. Perhaps this was the garment industry equivalent of firing Phil Donahue at a time when critiquing the Iraq War just wasn't the done thing. Instead of doing research, just assume that the guy is a problem for a stupid reason and get rid of him.

The board of directors of Mens Wearhouse may find themselves wearing the Infamous Mantle of John Sculley, who nearly ran Apple Computer into the ground after firing Steve Jobs in the 1980s. Already the company's stock has tanked, and customers are up in arms. One Wall Strett analyst opined that the company felt Zimmer's image as a Person of Years didn't jibe with attempts to win over millennials, though this analyst has clearly not looked at millennial modes of dress lately. But the saddest thing about Zimmer's dismissal, whether out of a misguided chasing of the meager millennial dollar, or his possession of a similar name to someone in a high-profile trial, is that it's yet another nail in the coffin of the Old Jewish Retailer model, one which prioritized good customer service delivered by well-compensated employees in a family environment. I think this board will live to rue the day it decided to let Mr. Zimmer go.

Here in New Jersey, there is still one relic of this kind of business model left. It's P.C. Richard, the appliance and electronics store with a number of NJ locations, including the famous Flagship on Route 22 in Union. Richards offers decent value and knowledgeable sales staff who'll work with you and even haggle a bit, especially if you come back to the same guy every time you shop there. I've bought a Weber grill, an air conditioner, and a small freezer from MY P.C. Richard salesman, Nick, and I know that when I go back to buy something else, Nick will give me a good deal. As long as P.C. Richard is owned by the founder's family and is a privately-held company, you'll be able to get this kind of service. It's only when these businesses go public and have to answer to the Mitt Romneys of the world, that things like service and value -- and folksy founders -- must fall by the wayside in pursuit of more dollars stuffed into the pockets of the rich.

Here's a sample of the kind of guy these Wall Street assholes just jettisoned (note the millennials who DO seem to be interested in what he has to say):





UPDATE 6/25/13: Looks like the Board, which appears to have engineered Zimmer's ousting because of their own desire to stuff the pockets of the company's executives instead of its employees, has a problem on its hands.

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Thursday, February 26, 2009

Someone else who gave back instead of keeping it all for himself
Posted by Jill | 4:21 AM
In Tuesday night's speech, Obama gave a shoutout to banker Leonard Abess, who took the proceeds from cashing out of the bank he ran and sent a bonus to everyone who worked, or had ever worked, for him. Here's another businessman whose heart is in the right place. I don't know if these stories about Jewish businessmen are coming out as a kind of counter to Bernie Madoff, but given people's tendency to take one story, or even two or three, and paint an entire group with that brush, it's certainly welcome.
The way Martin Samowitz sees it, he had 94 very good reasons to stay out of the shoe business and one good reason to get back in.

The 94 reasons are the number of years since he was born in Queens. The one reason to return is the chance to give some of his former employees their jobs back.

Samowitz founded the Marty's Shoes discount shoe chain, opening the first Marty's in Little Ferry in 1974. The chain, which was bought by a private equity firm in 2006, filed for bankruptcy in September. Samowitz is working with former Marty's chief executive officer John Adams to resurrect Marty's Shoes.

Samowitz's first shoe chain, Perry's, died after an ill-advised merger with a conglomerate that went bankrupt. By 1997, Marty's had grown to 70 stores, with sales of more than $70 million, and had made Samowitz a millionaire many times over. Samowitz, then 82, had no children and no heirs and "gifted" the chain by canceling a $5 million debt the company owed him. He then invited 11 managers to become stockholders in the company, and turned the day-to-day operations over to Adams.

In 2006, the stockholders and Samowitz decided to sell the majority stake to private-equity firm J.P. Capital. Part of the payout was withheld in the form of three-year notes, but before those notes could be paid off, Marty's — loaded with debt and facing a slowing economy — went under, liquidating the 47 remaining stores.

[snip]

Q. Why are you going back in business?

We don't have to – I have enough aggravation in Florida with golf and running around. But it's an absolute crime, what happened to the people that were with Marty's Shoes for 20, 25 and 30 years. Now John [Adams] personally tried to hold up the other company, but he was not the boss, he was not the owner, he was not giving directions. He put his own money in, which is lost. He put his own money in because he was trying to save the company for the employees. That was the principal reason.

John came out of the sale with enough money that he could retire, except he was a little too young to retire.

The new company – I was very impressed with them. They were Ivy League graduates. But they were from California. I should have known. When I said to them, "You're moving to New York or New Jersey, right?" he said, "No." I said, "Why not? Who's going to run the company?" He said, "You don't understand, Marty. We do it from the computer." I said to myself, Well, maybe I'm old-fashioned. I'm used to going into a store and patting a stock boy on the back and saying, "Hello. How are you? Good to see you again." But they thought that was totally unnecessary.


Oh, and by the way? Samowitz is 94. What's going to happen to this country when retailers like him; the guys who cut their teeth on retail in the days of personal service, die off and we're left with nothing but the equity companies?

I was a Marty's customer, and losing the chain was a "Where the hell am I going to buy shoes?" moment. I'm not one of these Evita-types who has to have 20 pair of fabulous spike-heeled Jimmy Choos. I'm the kind who will buy a dozen pair of the same kind of loafers simply because they fit and they're comfortable. For me, the return of Marty's is cause for celebration for that reason. But for the people who worked there who will undoubtedly be first in line for the new jobs, it could very well be a new lease on life.

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Sunday, June 17, 2007

Maybe it's because people have less money to spend?
Posted by Jill | 6:37 AM
You'd think Federated Department Stores paid for this story:

Since the inception of the Web, online commerce has enjoyed hypergrowth, with annual sales increasing more than 25 percent over all, and far more rapidly in many categories. But in the last year, growth has slowed sharply in major sectors like books, tickets and office supplies.

Growth in online sales has also dropped dramatically in diverse categories like health and beauty products, computer peripherals and pet supplies. Analysts say it is a turning point and growth will continue to slow through the decade.

The reaction to the trend is apparent at Dell, which many had regarded as having mastered the science of selling computers online, but is now putting its PCs in Wal-Mart stores. Expedia has almost tripled the number of travel ticketing kiosks it puts in hotel lobbies and other places that attract tourists.

The slowdown is a result of several forces. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales, making it harder to maintain the same high growth rates. At the same time, consumers seem to be experiencing Internet fatigue and are changing their buying habits.

John Johnson, 53, who sells medical products to drug stores and lives in San Francisco, finds that retailers have livened up their stores to be more alluring.

“They’re working a lot harder,” he said as he shopped at Book Passage in downtown San Francisco. “They’re not as stuffy. The lighting is better. You don’t get someone behind the counter who’s been there 40 years. They’re younger and hipper and much more with it.”

He and his wife, Liz Hauer, 51, a Macy’s executive, also shop online, but mostly for gifts or items that need to be shipped. They said they found that the experience could be tedious at times. “Online, it’s much more of a task,” she said. Still, Internet commerce is growing at a pace that traditional merchants would envy. But online sales are not growing as fast as they were even 18 months ago.

Forrester Research, a market research company, projects that online book sales will rise 11 percent this year, compared with nearly 40 percent last year. Apparel sales, which increased 61 percent last year, are expected to slow to 21 percent. And sales of pet supplies are on pace to rise 30 percent this year after climbing 81 percent last year.

Growth rates for online sales are slowing down in numerous other segments as well, including appliances, sporting goods, auto parts, computer peripherals, and even music and videos. Forrester says that sales growth is pulling back in 18 of the 24 categories it measures.

Jupiter Research, another market research firm, says the growth rate has peaked. It projects that overall online sales growth will slow to 9 percent a year by the end of the decade from as much as 25 percent in 2004.


It may very well be that some stores are sprucing up and beefing up customer service to make them more appealing, but in a world in which Circuit City just fired thousands of experienced workers and hired new ones at three bucks an hour less becaue they didn't want to pay for experience, I don't buy it. Yes, my local K-Mart has been spruced up with new flooring and brighter lighting and Sears Craftsman tools and Kenmore appliances, but it still takes just as long to check out.

But if you look at reports for May retail sales figures, they tend to bear out a general slowing down of spending among those companies catering to Americans of modest means:

Consumers' "worries about gas prices have increased from January through April," Wal-Mart said in a June 7 statement. The company, based in Bentonville, Arkansas, predicted June same -store sales will be unchanged to a gain as much as 2 percent.

[snip]

Consumer spending and retail sales were "generally up," and several banks reported faster sales of "luxury items" than lower-end goods, according to the Fed's compendium of regional economic activity, known as the Beige Book, issued this week. In four districts, Fed contacts reported sales were "disappointing or below expectations."


Luxury goods tend not to be sold online, whereas those goods that represent discretionary spending -- books, CDs, DVDs, computers for home use, low-end electronics, and the like -- are more likely to be purchased online.

Fuel prices have also caused already-high shipping costs to shoot through the roof. Yesterday I bought a roll of edging veneer from Rockler, and a $2.99 roll is going to cost $6.98 to ship. Five filters for my furnace's dehumidifier cost over $10 to ship. On the other hand, how long would it have taken me to track down these things in meat world? In even ONE Home Depot store? This way the whole mess took me about fifteen minutes.

Given the amount of advertising revenue the New York Times receives from brick and mortar retailers, it's not surprising that it would run a story gleefully hailing "internet retailing fatigue" among the American people. But the truth is probably more one of a retail channel that is maturing into a more modest, normal growth track. There are those who will never shop online no matter how easy it is, and those who, for reasons unknown to me, actually enjoy the experience of going to a mall and shopping.

For me, you can move it all outdoors, cover it with stucco, call it a Towne Center instead of a strip mall, and put in as many Panera Breads and Green Mountain Coffees as you want -- it's still a shopping mall, and it still carries a bunch of clothes I can't wear and cooking supplies I'll never use and furniture I don't need. When I buy software, or books, or hard-to-find items, or bulky goods I don't want to have to rent a truck to shlep home, you'll still find me online.

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