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City Store
registers a profit
Run by the Police Relief
By Gordon Y.K. Pang
Association since 1997, the store
pays its first royalties
to the city
Star-BulletinROY Amemiya manages an annual operating budget of $1 billion so a check made out to the city director of finance for $1,970.65 normally wouldn't grab his attention.
But when the check came last week from the operators of the oft-criticized Honolulu City Store, Amemiya was impressed.
The check represents the first royalties to the city since handing over the City Store's operations to the Honolulu Police Relief Association in December 1997.
"I congratulate them on their success in turning things around," Amemiya said, adding that he's hopeful the city will get an even larger return next year.
Kristine Sutton, hired by HPRA as general manager for the City Store last July, credited the turnaround to the addition of wholesale accounts, an enlarged vendor list and merchandise inventory, and a spirited staff .
No fewer than seven retailers now carry City Store products, accounting for about 25 percent of sales, Sutton said.
Three of the stores are in in Waikiki -- at King's Village, the Royal Hawaiian Shopping Center and the International Marketplace.
The City Store line also can be found at Waikele Shopping Center, Aloha Tower Marketplace, Cycle City and at John's Pins, an Aloha Stadium Flea Market vendor.
In-store sales also have taken off, Sutton said, with gross sales of nearly $100,000 over 1998's figure.
Sutton said merchandise is diversified because three other agencies are involved.
The Friends of the Royal Hawaiian Band, the Friends of the Honolulu City Lights and a group affiliated with TheBus workers have joined the police relief association, the Friends of the Fire House and the Hawaiian Lifeguard Association as nonprofit agencies who derive profits for contributing products and their names to City Store products.
Last year, store profits contributed more than $30,000 to those agencies, Sutton said.
Sales of police items still make up 50 percent of business, Sutton said, while fire department-themed products make up 33 percent and water safety items, 13 percent.
One criticism early on against the City Store operation was the limited number of vendors allowed to sell products, but that problem appears to have been addressed.
The store now also has a marketing plan in place, which includes advertisements in the monthly Ala Moana magazine that is handed out to visitors.
Prices of the products aren't exorbitant.
A polo shirt with the Honolulu Police Department logo is $27, an aloha shirt is $37, and caps and T-shirts range upward from $10 and $15, respectively.
Under the deal between the city and the relief association, the city gets 30 percent of the net profits in excess of $507,000 in gross sales, which is calculated as the store's overhead.
The store grossed $376,366 in 1998, which was itself an 18 percent increase from the previous year.
The relief association pays the city $1 a year in rent.
City Council members have criticized the fact that the store does not share in the monthly $300 common-area maintenance fee the city pays for the store at Ala Moana Shopping Center and the adjoining satellite city hall.
But Sutton said the relief association picks up the cost of keeping up the storefront, which leads into the satellite city hall area, and makes cosmetic changes.
A dimmed neon sign leading into the satellite city hall was one problem fixed by the association.
The three-year contract between the group and the city runs through the end of 2000, but negotiations are under way for the arrangement to be extended for as long as five years, Sutton said.
Councilman Mufi Hannemann, a longtime critic of City Store management, said news that the venture is pulling a profit is good.
But Hannemann, an announced candidate for mayor, noted that the original plan by Mayor Jeremy Harris' administration was for the City Store to make enough profit to pay for more police officers.
"You can't hire too many people with $1,900," Hannemann said. "I guess you could go buy some stocks, but that's about it."
City & County of Honolulu
