TheBuzz
TheBuzz
Xcel goes deep
in rough economic waterHawaii's tough times began well before Sept. 11, depending on who's doing the talking. But if Ed D'Ascoli's doing the talking, now is a good time to expand.
The retail arm of his Haleiwa-based Xcel Hawaii Inc., Kem Hawaii Inc. -- run by his wife Karen -- is preparing to open a new Xcel Wetsuits store at the now fully leased Kailua Foodland Marketplace.
They're shooting for an opening the first week in February.
D'Ascoli sees the expansion as "long-term planning."
"We feel as though the economy will be tough in the short term, but now is the time to -- not play it too conservatively, to be a little bit more aggressive and don't get scared," he said.
He increased the company's advertising and marketing budget for the coming year, because "the (other) retailers that do buy our products need to have that confidence that we're going to stand behind them and get people into the stores," he said.
"Reducing your ad campaign is the surest way of securing failure," said D'Ascoli.
Backing up D'Ascoli's belief is a recent "Business 2.0" article which reported prior to its bankruptcy filing that Kmart CEO Chuck Conaway acknowledged he should not have slashed marketing budgets after company revenues started heading south. The online publication reported that by late fall the company "had lost far more in sales than it had saved in marketing costs."
D'Ascoli anticipates that at least some of his competitors will make the same mistake. "We'll take advantage of the weak knees," he said.
Most of his advertising is handled in-house, but his 20-something art director lives in California, closer to the markets where the wetsuits are used. He's also closer to the age of the majority of Xcel's wetsuit customers.
There are other advantages to expanding in such a market.
"During down times there are great deals on leases and store fixtures, and I can open a store a lot cheaper now than I could during a boom time," D'Ascoli said.
Kailua was chosen because it's a strong watersports area and because the customer base would be predominantly local, D'Ascoli said. The store will carry more than just wetsuits, as the company makes other types of "water wear" including UV protective tops known as rash guards, in all sizes from toddler to adult. The company also does contract work, providing military special forces with wetsuits in Hawaii, California and Washington state, D'Ascoli said.
"People are still going in the water, diving and paddling, and we see a niche for us there," he said, as borne out at its Ward Village Shops store where about 60 percent of the customers are local. Xcel's other retail location is in Haleiwa, known around the world as the hub of Hawaii surfing.
Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached
at: eengle@starbulletin.com