Wilson's: retailing by the (big) book
Baton Rouge, La.
In an era when many recession-weary retailers are using every conceivable gimmick to lure more shoppers, one tried-and-true formula seems to be doing just fine, thank you: the catalog showroom.Skip to next paragraph
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In fact, the nation's catalog showrooms often do well during times of hardship.
The formula - offering name-brand goods at discount prices - worked well during the 1974-75 slump. Today their recession-defying magic is working again, although with not quite the same potency of the past.
A case in point is the Baton Rouge-based empire of H. J. Wilson. He opened his first catalog showroom some 25 years ago. Now the H. J. Wilson Company has 77 stores in 12 states, from New Mexico to South Carolina.
His is the third-largest chain of such stores in the United States, and the largest in the Sunbelt. Its 1982 sales are projected to run more than half a billion dollars.
In Baton Rouge, where most businesses are satellite operations of companies headquartered eleswhere, Mr. Wilson has become something of a local ''Cinderella success'' story.
He started out as a jeweler in a one-room, second-floor shop some 35 years ago, opening first a ''trade shop,'' then a couple of retail stores, before launching his first catalog showroom in 1957.
Catalog showrooms - where customers find what they want in a catalog or from floor samples, then pick up goods from a designated delivery point in the store - are generally doing well, the red-maned merchant says.
They all have certain things going for them. They specialize in such ''hard lines'' as appliances and consumer electronics, which aren't regional or seasonal, except for the Christmas rush. They buy in great volume, and often on better terms than conventional retailers get, so that they can pass savings on to consumers. They accept bank cards but avoid the expense of offering their own charge accounts. And they avoid some of the department-store frills such as fancy displays.
Wilson's has further refined this general strategy by situating many of its stores as ''anchors'' in shopping malls, to draw drop-in trade, instead of putting them off by themselves, as is more usual in the catalog showroom business.
Wilson's also achieves certain economies of scale - in newspaper advertising, for example - by concentrating several stores in one urban area. And the company is well positioned to grow with the Sunbelt. Jewelry remains an important part of its business, accounting for nearly one-third of sales volume, compared with some 16 to 18 percent at other catalog showroom stores.
Although costume jewelry is ''shopped out,'' Wilson's makes its own fine jewelry in New York and maintains an office for diamond buying in Tel Aviv. Each Wilson's store has its own jewelry and watch repair department on the premises.
Wilson's customers are unlikely to think they've wandered into Bloomingdale's by mistake. But because of the importance of jewelry to the business as a whole , Wilson's stores adhere less stringently to the ''no-frills'' design philosophy than most catalog showrooms. ''If you're buying a diamond engagement ring, you want a store that looks nice,'' is the attitude at Wilson's.
The last few years have seen a certain shift away from strict catalog merchandising back to more traditional display of goods and to more waiting on customers by the sales staff. Mr. Wilson sees this as just another way to attract customers in difficult times - ''Like double-stamp days at the supermarket.'' He says he feels his stores' ''quality look'' is also an advantage.
But Kay Nelson, an analyst with the New Orleans brokerage firm of Howard, Weil, Labouisse, Friedrichs Inc., observes, ''Jewelry is still their 'cash cow,' and high-priced custom jewelry is something people cut down on in a recession - and Wilson's has been hurt.''
She praises Wilson's as a ''well-managed company,'' though, and calls both chairman Mr. Wilson and Tracy J. Mandart, president and chief operating officer, ''very astute.'' But retail sales have been lackluster across the country of late, and Wilson's sales ''have not been what they expected,'' she adds.
Sales jumped 30 percent in the second quarter over the same time a year ago, however. One reason is the company's acquisition of Standard Sales Company of Florida Inc., a chain of 14 catalog stores. But Mr. Wilson points out that even without the new stores, the company's sales have clipped along 10 percent ahead of last year's.
In a recession people will shop around first for the best price for a camera or tape recorder, but a lot of them will end up buying, nonetheless, which is good news for the Wilson Company.