I couldn’t help but give Ken this topic because I hear it come up in conversations quite a bit. Don’t worry, I am seeking an individual who will contribute with an opposing perspective to Ken because I personally would like to understand both sides of the fence….so actually I will ask you readers to please accept an invitation to email me if you would like to share your opinion.  From the eye of a consumer (me), I can see where Ken has a point. I personally LOVE LOVE LOVE to shop at cool boutiques that not only have a story themselves, but also sell product with a story. I am all about supporting people who it really matters to because it feels good to be a part of their success….HOWEVER in the times where I have needed to find a specific style or product going to a small boutique with a limited range of offerings does not normally provide what I need, so I head to Nordstroms instead. From my perspective, it would be smart if department stores would learn how to custom tailor their business to support the vendors that provide the volume, but also the little guys who cannot take as much risk. I am a firm believer that there are always solutions that make sense and support the industry as a whole and I like these topics because they get people talking about them! -Julia

Independents versus Department Stores

This week, Julia gave me a topic that will no doubt cause debate.    Independents versus Department stores.   The parameters under which the topic was given were never defined.   I was simply told “lets see where this takes you”.   I could write about which group I thought has more longevity, the future of each, dealing with each, or which I prefer to sell.   Before I begin to answer any of these questions…there is something you need to know about me.   I always seek fairness in my personal and professional business.   Below is an anecdote that will substantiate this.  

 
This week, I got a form letter in the mail from Bank Of America Investment services.   My IRA is handled by this organization and apparently, B of A Investment services is being phased out and transitioned over to Merrill Lynch(which you may remember was bought with our help).   According to this letter, there will be a whole new set of fees associated with my account.    However, if I chose to close out my account with them, I am subject to a $75 “administration fee” to discontinue my account.   For the record, I have a hard time when someone forces something upon me like this.   I called “customer service”, and told them that because they are switching my account over to Merrill, I am assessing a $100 fee.  Obviously, the person on the other end was totally confused, but I explained that if they can assess an arbitrary fee like this, so can I.

 
Can you guess where I am going with this?   A few years back, while working at my last post, I was asked to submit candidates for a large sale at a major department store.   I was not invited to this meeting, but was told to send the shoes along with a signed co-op form for $250.   When I asked the DMM what the $250 was for, I was told that it was to help defray the cost of the buy meeting which was being held off site, at a pretty nice resort.   The $250 will be used to help cover the cost of tipping the bellman to bring my box to the meeting room(I was asked to send 5 styles).   I know a lot of you out there (especially Will) counter with “hey, this is a cost of doing business..build it into the cost of the shoes”.   However, this particular account also required a 25% discount off of the initial order, and a 25% discount off of any re-order.   Also, the account will send back any shoes not sold at the end of the season.   And by the way, I was told(when I asked if these terms were negotiable), “If you do not get any shoes in for this sale, you most likely will not get any fall orders”.   I would not let emotion get in the way of doing business, if  I felt there would be some quid pro quo.   Typically, there is none.

 
In fairness, I have been asked by independent accounts for certain “favors”.   Mark down money, returns, contest money, and the like.   However, I am able to leverage this by asking “what is in it for me”?   I have never been given an ultimatum.    Usually, I will say something like “Lets put our heads together and figure out something that works for both of us”.  In the department store world, I might as well be speaking Mandarin.

 
As long as vendors are willing to subsidize department stores, department stores will exist.   However, their business model is a self fulfilling prophecy.   In an attempt to minimize downside liability, vendors will attempt to sell department stores what has the least possibility of being marked down(which the vendor must pay for).   This leads to uninspiring product on display.   However, if a “major” does not order a style, it has very little chance of being produced which means the risk takers (usually the independent) pays the price.   If the vendors cease subsidizing the department store, prepare for bankruptcy’s by the store and the vendor.   They need each other.   Once you sell a department store, it becomes difficult to live without the volume.  

 
An independent who looks for unusual, fashionable product and gives the customer a reason to shop in his store, will have longevity.  
 

No doubt you can guess who I prefer to sell.   If you look at my site www.twigfootwear.com and click on “our story” the last few lines talk about who Twig chooses to support. 

 
I am not opposed to Department stores, I am opposed to their model.   How long would a department store stay in business without the financial help of the vendor?   How many vendors would go out of business without the department store?

 
If retailers bought product and not programs, perhaps our economy would be better off!
 
 
Ken Proctor
Front Man
Twig Footwear, LLC
e: Ken@twigfootwear.com
 www.twigfootwear.com