Local Retailers Scratch Niche for Success

To prosper in Northwest Arkansas’ competitive retail climate, local retailers must have a niche.

“You have to have a specialty shop,” said Olivia Sordo, who owns a jewelry design store in Fayetteville that bears her name.

“You can go to Wal-Mart and get a piece of jewelry for a lot less money, but you don’t get the service,” she said. “It’s cookie-cutter jewelry. If Wal-Mart has it, every Wal-Mart in the country will have it and every discount store in the country will have it. … They can’t cater to individual needs. They’re selling volume. They’re not selling anything special.”

In the past five years, Northwest Arkansas has been inundated with national chain retailers who scarcely knew where the state was before demographics indicated there were people here and, consequently, money.

Wal-Mart Stores Inc. and Dillard’s are Arkansas companies, and their first stores were in Arkansas. But other chains — such as Gap Inc., Best Buy, Kohl’s and Home Depot — have only recently invaded Northwest Arkansas. And indications are that things are going well for the newcomers.

After posting strong sales numbers at the Gap store that opened two years ago in the Northwest Arkansas Mall in Fayetteville, Gap Inc. opened an Old Navy store just south of the mall. The company also has plans for a Banana Republic store in the mall and a second Gap store, to be located in Rogers’ Scottsdale Center. San Francisco-based Gap Inc. is the nation’s No. 1 apparel retailer with 3,800 stores worldwide and 2000 sales of $13.6 billion.

It’s a Cole, Kohl World

But John W. Cole, who owns Walker Brothers Dry Goods, a local men’s store in Fayetteville, said he’s no more fazed by the Gap than he is by a Kohl’s store that opened April 16 across the highway from his business.

“When a major retailer comes into town, they’re going to compete for the mass market,” Cole said. “That’s what Kohl’s is going to do, and they’re going to do it well.”

Kohl’s competes primarily with JC Penny, Dillard’s and Sears. Walker Brothers is a bit more upscale than those stores. Suits on the rack at Walker Brothers range in price from $400 to $1,200. Suits at Dillard’s, for example, top out at about half that price.

Cole said the chain stores are “the supermarket version of apparel shopping.”

“We look around, and if other stores have it, we buy something else,” Cole said. “The only way a small store can survive is through unique merchandise and great service.”

Cole has owned an upscale men’s store in Fayetteville since 1977. He moved John W. Cole’s Clothing for Gentlemen from the downtown Fayetteville square to Singletree Plaza, a shopping center Cole developed, in 1997.

Talking Fish

Like Cole, Steve Melody tries to keep one step ahead of the trends. Melody said buying unique items that will sell quickly at his three Fayetteville gift stores is a little like playing the commodities market.

Last year, a talking fish called “Billy Bass” was the hottest novelty item on the market. The wholesale price was $15 to $17.50 each. The plaque-mounted fake fish sold in stores for $35.

Melody had hundreds of the fish ordered when suddenly the fad was over and nobody wanted them anymore. He was able to cancel the orders before the items arrived, but many retailers were stuck with truckloads of talking fish. The fish, which could turn its head and sing “throw me back in the river,” now sells for $5 at Trees & Trends in Fayetteville’s Fiesta Square shopping center.

“It’s always a challenge to stay ahead of the game,” Melody said.

Melody has had a gift store on Dickson Street since 1971. In 1976, he opened Cedric’s Creative Decor in the Northwest Arkansas Mall, partnering with Neel Cedric. Later, he bought Cedric out and changed the store’s name to Melody’s Choices.

Over the past two years, Melody opened two new stores in the mall and closed the Melody’s Choices that had operated in the same mall location for more than a decade. The move doubled his floor space to 6,000 SF.

Now, both of his stores — Melody’s Choices, The Gift Store; and Melody’s Choices, The Fun Store — are located in the mall’s north wing near the women’s Dillard’s store.

Melody provides plenty of choices. He stocks about 26,000 different items at his three stores. Prices range from about $1 for items like candles to thousands of dollars for a collector’s doll.

“We used to stock dolls at upwards of $3,000 and $4,000, and we sold them well,” he said. “But those customers are fewer and farther between.”

Melody said his sales have been flat for the first quarter of the year compared with the first quarter of 2000.

In what appears to be a slowing economy, Melody said, his customers still buy gifts for children and grandchildren and seem to cut back on purchases for themselves.

Melody said he relies on instinct and computer point-of-sales data to help him decide what to buy when he goes to market. He competes directly with chains like Coach House Gifts and Hallmark, which both have locations in the mall.

Melody said it’s difficult for him to offer an inventory of items that aren’t sold in other stores because of the number of items he sells and because he doesn’t know what the competition will do.

Some manufacturers, such as Christopher Radko, will give stores exclusive rights to carry its ornaments and won’t sell to competing stores. But those companies are rare.

Melody said such exclusivity would likely be for a 30- or 40-mile radius, so stores in Rogers might be allowed to carry the same items as stores at the mall in Fayetteville.

Melody said he doesn’t try to compete with the superstores like Wal-Mart and Toys-R-Us. They buy in such large quantities, it’s difficult to beat their prices on the items they carry.

No Leaky Diamonds

By nature, a jewelry-design business would cater to a more upscale clientele than a discount store. Olivia Sordo Jewelry Design Studio attracts affluent customers who want unique jewelry and will pay more to get it.

Sordo operated her shop from a location on the downtown Fayetteville square for 12 years before moving in 1998 to Crossroads Village, a then-new shopping center at the intersection of Mission Boulevard and Crossover Road. Both stores were about the same size — 2,500 SF.

Sordo’s sales jumped by about 25 percent the year after she moved to the new location in a rapidly growing area of east Fayetteville.

Sordo said she hasn’t seen any real change since the national economic slowdown allegedly hit last fall.

“We’re still up [at this point] over last year,” she said, “but it’s more sporadic. It seems more difficult to predict where it’s going to go.”

Don Blakeman, who has operated Blakeman’s Fine Jewelry in the Northwest Arkansas Mall for the past 15 years, travels overseas once or twice a year to find small, cottage businesses that do fine jewelry work.

Blakeman has to keep ahead of the competition from chain jewelry stores in the mall such as Zales, Gordon’s and Kay’s as well as from department stores like Dillard’s and JC Penny.

“We can certainly react a lot faster to fashion trends,” Blakeman said. “We don’t carry any mass-produced products. This is fine jewelry as opposed to just jewelry.”

Blakeman said the jewelry in his store is usually 18 karat gold, unlike the 10 or 14 karat gold at chain jewelry stores. Also, Blakeman said, his jewelry is hand-finished and customers get the service of a certified gemologist.

Craig Underwood, vice president of Underwood’s Fine Jewelry, which has been a fixture on Fayetteville’s Dickson Street for the past 43 years, said his 7,000-SF store is better-equipped than others to “scrutinize” diamonds and colored stones.

Underwood said his store has the most advanced accredited gem laboratory in Arkansas. The company’s advertisements also let people know that there’s a certified gemologist on the premises.

Underwood’s makes custom jewelry and offers some pieces that are made by designers. Custom-made pieces at the store range in price from $95 for a gold Razorback hog to pieces that sell for more than six figures.

Underwood’s uses a laser welder that makes joints that are more than 300 percent stronger than soldered welds, Craig Underwood said.

“We are able to custom make pieces that literally cannot be made anywhere else in this part of the United States,” he said. “A lot of stores in the area carry mass-produced jewelry items. They’re stamped out thousands at a time.”