New look, vision for Hilo Hattie


POSTED: Saturday, December 05, 2009

Hilo Hattie, Hawaii's 46-year-old retailer, is getting a fresh start, three months after emerging from Chapter 11 bankruptcy.

The company's Nimitz Highway headquarters has a more spacious and open floor layout featuring a “;Wall of History”; explaining how it got its name in 1963 from entertainer Clara Haili, and shelves stocked with new inventory.

Besides the usual selection of familiar aloha shirts and souvenirs, there is now a keiki section featuring aloha prints for infants and kids, a vitamin section, and a demo bar offering samples of Hilo Hattie's own lines of chocolate, macadamia nuts and coffee. Some walls have been knocked down, creating about 2,500 square feet of additional sales floor space.

Hilo Hattie's new chief executive officer, Donald B.S. Kang, has a new vision for the company.

Last week, Hilo Hattie announced it would offer a lowest-price guarantee for chocolates, coffee and macadamia nuts, with the goal of competing head to head with local retailers such as Longs Drugs, Don Quijote and Safeway.

The goal, Kang said, is to reach out to the kamaaina market during the holidays, with both the lowest-price guarantee and 40 percent discount for anyone with a Hawaii or military ID, up until Dec. 24.

“;It's a celebration of our new beginning,”; Kang said.

Kang, who also owns apparel manufacturer Royal Hawaiian Creations, likes to spend as much time on the sales floor as upstairs in his office.

He said he plans to upgrade existing items while adding new ones, and to eventually offer the largest selection at the lowest guaranteed prices. His vision is for 90 percent of the merchandise to be made in Hawaii.

For instance, the new vitamins section offers Hawaiian Spirulina from the Big Island, while a newly expanded Bath & Body section will offer products from local companies, currently under negotiations.

During bankruptcy proceedings, the stores suffered from thin levels of inventory.

Kang said he has beefed up the sales and marketing teams, and they have been working hard to renew partnerships that brought trolleys full of customers in from Waikiki.

After the holidays, renovations will be under way at the Nimitz store to transform what is now Island Soap & Candle Works' factory into an Internet cafe serving Kona coffee with its own roaster.

Visitors will be able to use free Wi-Fi; buy Hilo Hattie's signature Kona coffee, which will be roasted on-site; enjoy a media area where they can sample music; and browse books and magazines sold at the store.

Behind a curtain, former warehouse space will be transformed into a hula studio, several briefing rooms and a museum, ideal for large groups.

Outside by the trolley stop, where a hot dog and shave ice stand used to be, Kang envisions a farmers market featuring produce grown in Hawaii. He's talking to the Hawaii Farm Bureau Federation about it, he said.

Hilo Hattie's parent company, Pomare Ltd., emerged from Chapter 11 bankruptcy in September after the court approved its reorganization plan to eliminate about $14 million in debt. As part of the plan, the company will repay unsecured creditors 5 percent of what they are owed over five years.

Kang, who acquired the company's stock from former CEO Ted Nelson during bankruptcy proceedings, agreed to provide $1 million in financing for new inventory, with another $2 million in capital investments upon emergence.

While change is in the air, some of the old Hilo Hattie still remains.

Every customer who walks into the Nimitz store is still greeted with a shell lei. The world's largest aloha shirt — a 400XL shirt that made the 1999 Guinness Book of World Records — still hangs in the lobby.

Maui Divers Jewelry still runs a concession stand inside the stores.

Many of the aloha apparel brands, including Tori Richard and Iolani Sportswear, are still carried at the store, although there has been a shift to more subtle, rather than loud, prints and colors.

A revamped Web site was launched on Thanksgiving Day, and Kang says he has hired more people to ramp up Hilo Hattie's online presence as well as sales and marketing. Hilo Hattie had a good Cyber Monday, he said.

Many mainland customers who visit Hilo Hattie during their trips to Hawaii continue to shop for gifts online, he said. To sweeten the deal, Hilo Hattie is offering free shipping with any single purchase of $50 or more.

Hilo Hattie is also going to relaunch its uniform line, which used to serve dozens of clients.

While the company is looking for additional locations in Waikiki, none have been finalized yet, according to Chief Operating Officer Mark Storfer.

Besides Nimitz, Hilo Hattie has a store at Ala Moana Center on Oahu, two on Maui, one on Kauai and two on the Big Island.