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HAPPILY SHABBY

IN A QUEST TO AVOID ‘SAMENESS,’ SHABBY CHIC SCOURS FLEA MARKETS TO STOCK ITS STORES

By Molly Knight

As her only child’s departure for college loomed and her husband sold the family’s expansive home in favor of a more modest dwelling to help defray the cost of tuition, San Clemente, Calif., native Mary Frauenthal responded the way many women do when forced to cope with major changes. “I picked up a few of Rachel Ashwell’s books,” said Frauenthal. “And I went shopping for comfortable furniture.”

That was six years ago. Today Frauenthal’s home is filled with calming yellow, denim and white pieces, including vintage metal birdcages, chandeliers with light-pink prisms and what she describes as “big floppy couches you can really sink into.” So pleased is she with her new lifestyle that she leaves visitors in no doubt as to which retailer provided it: A sign that reads “Shabby Chic Cottage” hangs adjacent to her front door, describing the home’s decorative motif to all who enter.

“I really feel like the Shabby Chic look is me,” said Frauenthal, who frequents the Shabby Chic store on Santa Monica’s Montana Avenue. “It’s romantic and beachy and comfortable.”

When Rachel Ashwell turned her hobby of rescuing and resuscitating flea market treasures into a full-time business with her first Shabby Chic store in 1989, she might not have imagined it would launch a movement that would give women like Frauenthal a look with which to pattern their lives.

In the last 18 years, the Westchester, Calif.-based Rachel Ashwell Designs has opened six additional stores, launched a Vintage Chic bedding and curtains collection through Marks & Spencer in England, and created the mass market spin-off Simply Shabby Chic for Target. The growth has only begun. Company officials say Shabby Chic will expand its fleet from seven stores to 50 by 2010.

“The company is at a point in its life where the brand is extremely strong and powerful,” said Nancy Green, CEO of Shabby Chic. “But the size of the business is much smaller than the recognition of the brand.”

Ashwell realized this potential for growth, and sought equity partners last summer to help expand the brand, Green says. In September, Shabby Chic announced an investment by Goode Partners, LLC, and additional funding from The Retail Finance Group of GMAC Commercial Finance. To help with the company’s expansion strategy, Ashwell tapped a team of female retail veterans to fill key executive positions. In March she hired Green, who, before coming to Shabby Chic, most recently ran the Pottery Barn Division of Williams-Sonoma, spending the better part of her four-year stint there as executive vice president. Former Warnaco Group CFO for swimwear Michele Pascoe was also brought on as CFO in March, and Mary McKay-Grbich left her position as Western regional manager for Pottery Barn in August of last year to become Shabby Chic’s vice president of retail operations. “We really feel we have a fantastic team of executives in place to lay the groundwork for a huge expansion,” said Green. “The time to grow is now.” Green says the company is looking to expand in a mix of street locations, lifestyle centers and malls in premium markets with an affluent customer base. “We don’t just want to be in a trendy location,” said Green. “We want to go where there are many stores with hip women’s apparel and home products.”

The furniture business is fickle, insiders say, so Shabby Chic will have its work cut out. “After Sept. 11, there was a tremendous amount of money spent on nesting and making the home more comfortable,” said Roger Burghdorf, senior vice president of the Santa Monica branch of Retail Consulting Services. “That phenomenon has softened a bit, so Shabby Chic must be careful to expand strategically in markets where they’ve identified that their product will sell.”

Expansion will largely be concentrated on the West Coast, in the Northeast, and in Texas, Green says, with exceptions in successful luxury shopping centers in such cities as Atlanta and Chicago. Green says the company also plans to expand internationally, but declined to speculate on when that would happen and where these stores would go. Insiders say the company is taking the right approach. “Companies like Shabby Chic should always expand like melted butter,” said Burghdorf. “They’re smart to expand in areas where they already have distribution centers and strong management, rather than hopscotch all over the country and beyond, which they would surely regret.”

New stores will range from 3,500 to 5,000 square feet. Company officials confirmed they were opening a unit last month at General Growth Properties’ Natick Collection, in Boston, and at the Simon Property Group-owned Lennox Square, in Atlanta, this month. “There are several other deals for premium street locations in the works right now,” said Green. “But I’m not at liberty to disclose those locations until those deals are finalized.”

What is for certain is that Shabby Chic will continue to focus on adult females favoring a comfortable, casual lifestyle, Green says. Shabby Chic is known for its floral prints and pastel palette, but as the boutiques expand, the company’s products will evolve in assortment and look to compliment richer colors, Green says. “It will still feel like Shabby Chic,” said Green. “But we will be introducing deeper colors that build on our quintessential core product.”

Shabby Chic’s quintessential core products are heirloom-quality pieces of furniture meticulously detailed and one-of-a-kind, Green says. However, some insiders wonder how Shabby Chic can provide these unique finds as it continues to grow. “This is a concern for nearly every store that wants to expand,” said Burghdorf. “The issue of sameness can become a problem.”

Mindful of this potential setback, Green says that Ashwell continues to scour flea markets throughout the world for hidden treasures to restore, and that these items will be sold as vintage pieces within the boutiques. The number of true vintage pieces available will vary from store to store, Green says. As for the rest of the boutiques’ offerings, the company prides itself on the time and care that goes into the production of each piece, and the fact that much of its furniture is made in the U.S. “We are able to control the production of heirloom quality pieces that last over a lifetime,” said Green. “We feel this really sets us apart from our competitors.”

Sources say one of the reasons Shabby Chic has been so successful is that the term spurred a movement synonymous with distressed vintage pieces with a country flair for the home. Under these parameters, the company has no competition, insiders say. But within the realm of furniture, Burghdorf names Restoration Hardware and Crate & Barrel as formidable foes, though Shabby Chic has higher price points. A traditional chandelier sells for $3,600, an oyster linen box-pleat lampshade goes for $165, and an 8-by-10 multicolored patchwork rug costs $4,000.

The high price point sends the message to consumers that what Shabby Chic has to offer is more exclusive than the average furniture store, Burghdorf says. “They’ve communicated a level of sophistication and intimacy that simply doesn’t exist in bigger chains. When you order an armoire from Crate & Barrel and they don’t have it in the store, a salesperson is likely to get on the phone and say, ‘Hold on. Let me check with the other store down the road.’ There’s a sense of mass production that is a turnoff to people who value owning a piece you don’t see in every other home.”

As Shabby Chic expands, Frauenthal says she’ll continue to look to Ashwell’s books and stores for inspiration on her own antique-finding missions. “The hunt is never over,” said Frauenthal. “Even vintage can evolve.”