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Shopping Centers Today -> July 2003
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AND THE WINNER IS ...
Chains honored in ICSC’s first ‘hot’ retailer awards ceremony
BY DEBRA HAZEL
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| Left to right: Daisy Fuentes, Jamie Karson, Jim O’Donnell, James West, Betsy McLaughlin, Robert Vivian, and Michael Kercheval (with assistant). |
LAS VEGAS — Whether serving trendy shoes, lettuce wraps, teen apparel or women’s casual fashion, today’s most successful shopping center tenants watch their customers carefully.
That’s what honorees American Eagle Outfitters, Chico’s, Hot Topic, P.F. Chang’s and Steve Madden told attendees at ICSC’s Spring Convention awards ceremony saluting North America’s hottest retailers.
“These prestigious awards were established this year to recognize the value of retailers in this industry,” explained ICSC President and CEO Michael P. Kercheval at the ceremony. “With competition today, it takes something extra to draw people to centers. These winners have that something extra.”
The winners were picked through an SCT survey of 1,300 North American regional mall marketing directors.
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| Hot Topic CEO Betsy McLaughlin’s advice: Connect with your customers. |
For Long Island City, N.Y.-based trendy footwear maker Steve Madden, that something extra was founder Steven Madden’s “mission to build the coolest shoe he could build,” said CEO Jamie Karson, accepting the award from the show’s host — actress, model and TV host Daisy Fuentes.
The company, which Madden founded 10 years ago with just $1,100, has now grown to 81 retail stores and a Web site. It also supplies product to other retailers. The chain plans to expand to Europe this year and has broadened its offerings beyond the eponymous Steve Madden line (best known for its chunky heels appealing to teens) to David Aaron (for a slightly older customer), men’s footwear and Stevie’s, a line for girls age 6 to 12.
The key to continued success is literally staying close to the target customer, Karson added. “We’re in the stores constantly,” he said. “You can’t run a store from your offices.”
Service is also fundamental to P.F. Chang’s growth. The only restaurant among the honorees, the 10-year-old, Scottsdale, Ariz.-based company has grown to 84 bistros in 28 states.
“We all grew up eating Chinese food, mostly from a carton in front of a television,” said Robert Vivian, P.F. Chang’s president and CEO. “We added service in a comfortable atmosphere.”
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| American Eagle CEO Jim O’Donnell was clad in casual chic for the occasion. |
Each Chang’s bistro features an open-air kitchen, high-end fixtures and a hand-painted mural that differentiates it from the others. “They’re all a bit different,” Vivian said. The bistros average 7,000 square feet and cost about $2.5 million to start.
The chain has also opened 20 fast-casual Pei Wei Asian Diners in four states to serve the time-constrained customer.
“As we watched people line up to get our food to go, we thought about another concept,” Vivian said. “You can get in and out of Pei Wei in 30 to 40 minutes.”
Hot Topic brings a rock ’n’ roll sensibility to the mall, offering clothing, gifts and accessories licensed from musicians or inspired by them to customers between 15 and 29. Hot Topic also owns Torrid, a chain that offers the same merchandise in plus sizes.
Founded in 1988, City of Industry, Calif.-based Hot Topic now has 434 stores and 34 Torrid units. To keep up with the latest bands and merchandise, Hot Topic delivers its employees to concerts and reimburses the price of their tickets if they write a fashion report afterward for the company.
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| Steve Madden’s Jamie Karson: “You can’t run a store from your offices.” |
“Everyone thinks I’m a mom dropping off kids,” said Hot Topic CEO Betsy McLaughlin, who accepted the award. “The whole culture of our company is based on customer contact.”
With 699 stores in 48 U.S. states and 56 stores in Canada, American Eagle Outfitters is the largest of the winners. The Warrendale, Pa.-based chain succeeds by consistently offering high-quality product at affordable prices to young adults, said CEO Jim O’Donnell in accepting his award.
“Layered under this brand strategy is marketing geared toward youth-oriented magazines like InStyle and ESPN,” O’Donnell said. The company Web site, www.ae.com, seems to be set up to drive shoppers into the stores, whose number is set to increase. The company plans to continue expanding in the United States and Canada, “and if the opportunity presents itself in other parts of the world, we would have to consider it,” O’Donnell said.
Skewing to an even more mature market, Chico’s aims to outfit its shopper from head to toe, offering apparel, shoes and accessories to women 35 to 55. The Fort Myers, Fla.-based company was founded when Marvin and Helene Gralnick started bringing Mexican folk art and cotton clothing back to the United States in a van they bought for $1,500 in 1983. Today the 400-unit chain sells private-label clothing in a boutique atmosphere offering high levels of customer service.
“Marvin and Helene love what they do,” said James West, vice president of real estate.
Chico’s posted a healthy comparable-stores gain — 7.8 percent for the first quarter of this year. It is testing a new concept, Pazo, (SCT, June 2003) for a younger, trendier customer, and is expanding by 75 stores this year. Yet the company still has some ways to go when it comes to name recognition, a bemused West told the audience.
“I still talk to some women who say they get their best margaritas at El Chico’s,” he said.
ICSC plans to make the award an annual event at the Spring Convention, which will be held next year on May 23-26 at the Las Vegas Convention Center.
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