A panel presentation by veteran Hawaii retailers yesterday was reminiscent of the hit show "Survivor," except none of the participants wanted to vote any of the others off the island. Hawaii retailers say shift in
strategy needed after Sept. 11By Stephanie Kendrick
skendrick@starbulletin.comCarol Ai, vice president of City Mill, has seen big box "category killers" move into a market her family's business dominated for nearly a century.
Former Crazy Shirts Chief Executive Officer Randy Yeager watched as that local icon expanded, contracted, filed for bankruptcy and was sold.
Sharon Weiner, group vice president of DFS Hawaii, has faced the decline in the Japanese visitor market and crippling changes in airport traffic.
And Cheryl Schaefer was brought on when Hilo Hattie was known solely as a source for matching tourist garb and demand for its merchandise was waning.
Speaking at a joint meeting of the Hawaii Society of Corporate Planners and Retail Merchants of Hawaii, Yeager acknowledged Hawaii's $16 billion retail industry is in the midst of dramatic changes.
"What we had in the recent past was an affluent, luxury brand, omiyage buying machine coming out of Japan, with a weaker West Coast component. Now that has shifted," said Yeager, now president and CEO of consulting and leasing firm Retail Strategies.
As visitor numbers rebound, Hawaii is attracting an older, more affluent mainland visitor, he said.
Retailers who bought into the Japan-focused luxury market, like many in Ala Moana Center, may be hurt, said Yeager. But those with a mid-priced focus, like Victoria Ward, may be better positioned, he said.
But Schaefer, now president of Sunny Hawaii, a handbag and accessories manufacturer with 750 accounts nationwide, said even the boutiques can improve their fortunes.
She used the Max Mara store in Ala Moana Center as an example of a corporate-owned designer label that has gone beyond the Japanese tourist. Its staff asked for fewer coats, larger sizes and more sporty clothes and has built a local and mainland following.
"We need to go fishing where the fish are instead of looking for the same fish," said Schaefer, using an axiom she applies to tourism marketing as well as retail.
Schaefer sees the U.S. East Coast and Midwest as neglected markets.
Weiner sees Korea as a growth area for DFS, which, with its luxury goods and the retail concession for Honolulu International Airport, has been hit hard recently.
"It's hard to imagine any company ... anywhere more deeply affected by 9-11. We were in the wrong place at the wrong time," Weiner said.
The company has cut staff and canceled raises and bonuses. "We're running a tight ship," she said. And it is working with the state on changes to its airport contract.
Another priority for Weiner is reaching Japan in a more effective fashion.
Travel wholesalers are doing a great job getting Japanese tourists back to Hawaii, she said, but they are doing it through heavy discounting. That means the trend is unsustainable and the travelers are less inclined to spend, she said.
"Hawaii's Japanese marketing needs a much better focus," Weiner said. Priority must be placed on attracting office ladies, who spend on brands; and wedding parties and honeymooners, who have pockets full of cash.
And the state needs to market Waikiki, at least in Japan where shopping and night life are priorities, she said.
But while Hawaii may have lost its position as the most revenue productive duty free operation in the world, Wiener said things are improving.
"The business is inching up, it's getting a little bit better every day."
Business is also getting better at City Mill, though even one of the architects of that success seemed surprised.
"Even with the second Home Depot and 9/11, we eked out an increase last year," said Ai, who runs the business with her brother Steven Ai.
She credits early panic with saving the family business.
"We studied what the successful home centers were doing on the mainland" in areas where the "category killers" had already arrived, said Ai. They started planning years before Eagle and then Home Depot arrived.
Positioning themselves as the convenient repair center, they worked on an image as closer, smaller and faster than the competition.
And they stocked up on the basics -- literally the nuts and bolts of the business -- as well as items targeted at Hawaii home repairs.
"We've added faucet stems for even the oldest type of faucet put in a Hawaii Kai home 30 years ago," said Ai.
Ai continued the theme of success being a matter of responding quickly to the market. "We have all the decision makers in one place. That means we can change something in an hour and take it out on the floor," she said.