Summer 2010 Cashing In on the Feel of Cashmere

Dave Coury, of Cashmere Elegance in Erie, PA, is ramping up sales with a newly unveiled owner-operator program.

One of today’s hottest fashion accessories is a simple yet elegant scarf. Whether worn as a fashion statement or for practical comfort, scarves present endless creative options to match any style. Women and men alike wear them looped, draped or knotted around the neck. They can even be used as shawls, belts, headbands or shoulder shrugs.

Scarves also offer many advantages for retailers: an affordable price point; an easy consumer impulse buy; a wide selection of colors and styles; and a one-size-fits-all item. Plus, contrary to popular belief, scarves are not just a seasonal fall and winter accessory. They are showing up in spring and summer wardrobes, presenting retailers with year-round sales opportunities.

Warming up to an owner-operator program

Capitalizing on the popularity of these trendy accessories, Cashmere Elegance (CE), an Erie, PA-based company, launched an owner-operator program at SPREE this year. The program offers retailers the opportunity to sell a proven product with high sales volumes and a high percentage of repeat business. With firsthand success selling scarves with “the feel of cashmere and the look of elegance” through a handful of locally managed RMUs, CE is excited to bring the opportunity to other retailers. The response to the owner-operator program has been unbelievable. “We had a tremendous response at SPREE. We were busy morning to night,” says Dave Coury, Managing Officer of the company.

The CE team has piqued retailer interest not only because of a hot-selling product, but also through accessibility to inventory, a specialized marketing and support program, and premium location opportunities. CE stocks a full line of inventory in its 22,000 sq. ft. distribution center, which is ready to ship orders year round. A value-added marketing program, run by industry veteran and CE’s National Program Director Micheal Brother, offers training and support to assist independent operators in maximizing their profits. In addition, CE has “secured over 300 of the best cart opportunities across the nation,” Coury points out.

Starting in July 2010, CE will increase the number of company-owned carts to about 10-20 and focus its energies on the owner-operator program. As Coury points out, CE has secured over 300 mall leases in 48 states for the holiday season. Some leases can be started even earlier. Currently, in places like SPREE, the team is finding many people interested in signing on. In fact, great locations are going fast, but many are still available by contacting Brother, who is responsible for assigning cart locations.

Nineteen years and counting

Coury started his specialty retail career in 1991 at the Ross Park Mall in Pittsburgh, PA, selling Disney and Warner Bros. clothing in an inline store called Cartoon World. “At the time, there was a big push for Disney and Warner Bros. merchandise. I combined the two products, and they did very well,” says Coury. He expanded the business to the Century III Mall, 20 minutes south of Pittsburgh, and set up shop every holiday season for about five years. Starting in 1998, however, Coury says “cartoon merchandise started to lose popularity.”

A self-professed Christmas person, Coury loves the atmosphere at the mall during the holiday season. That appeal prompted him to start retailing personalized Christmas ornaments. While ornaments do well, Coury admits they have a lot of market saturation, which makes it harder to get into malls. He kept his eyes open for something new, and found it in 2008 when he discovered pashminas and scarves with the feel of cashmere.

Coury began retailing scarves and pashminas at the Dublin Village Center Mall in Dublin, Ohio. In 2009, he quickly grew to four profitable RMUs.

Scarves have taken off in the last three years. Last year was big. This year is huge,” says Coury, adding that it seems like the number of scarf consumers has grown “1,000% in the last year.”

Operational details

As for the owner-operator program, retailers buy both the lease—which generally runs from early October to late January—and products from CE. Retailers have the option to use their own leases and buy CE’s products to complement an existing merchandise mix. However, through the owner-operator program, only Cashmere Elegance products are allowed.

To get off the ground and running, operators start with 1,200 pieces or units. Reorders are completed by the dozen. Retailers can stock product based on their preferences and what is popular in their region.

In addition to the lease and the product itself, retailers will benefit from a marketing and support program that includes free webinars, operator forums, weekly sales strategy newsletters and administrative support programs. The company is also launching a viral national sales support program that includes online branding campaigns, a national Facebook campaign and a holiday contest that will award the winner with a trip for two to New York City.

With the addition of Julie and Todd Grehl (the couple displaying the product on the cover), Rick Coleman, and Randy Hunsberger, retailers will also benefit from the team’s many years of specialty retail experience. “The experience we have doing this in the past helps us help retailers. We can advise them on how much to order, what to order and where stock levels should be the last ten days of operation,” Coury adds.

Wrap one on

The simplicity of CE’s product line seems too good to be true. No learning curve, no demonstration to memorize and no complex ingredients to discuss. Even the merchandising guidelines are coordinated with the retailer and examples are available on the website. “Malls are all different. For that reason, there is no set way to market our products,” says Coury, encouraging retailers to use their own creativity. The only retailer “must” is showing interested customers the many ways they can wear the scarves. There are simple knots, slipknots, European loops, double wraps, freestyles and neck-warmer styles. To learn these simple styles, CE provides retailers with free webinars and guides featuring step-by-step instructions.

The elegant scarves have the feel of cashmere. Pashminas, which can be folded in half or worn as a shawl, are lighter, with some styles containing silk. The sizes are different, with scarves measuring 12” X 72” and pashminas measuring 24” X 80.”

“Beyond their fashionable accessory appeal, scarves are commonly worn for outdoor warmth. Pashminas are more often used as an accessory for women’s business clothes or casual wear,” says Coury. With this split in mind, CE stocks an equal proportion of scarves and pashminas (50%-50%) in colder regions of the country. In warmer climates, in particular the southern states, Coury says the ratio skews toward stocking more pashminas (about 70%) than scarves (about 30%). CE advises retailers to follow these ratios when placing opening orders. If sales patterns change, however, retailers can always adjust ratios free of charge.

Scarves retail for $12, or 2 for $20, and pashminas retail for $8, or 3 for $20. “The economy is a big boost for us,” says Coury. “$20 is something most people can afford,” he says. CE’s scarves make an attractive addition to the common area because they are an impulse buy, with an ideal impulse-buy price point.

Demographics

Regardless of where retailers are selling scarves, men are an important part of the market, says Coury, noting that males make up to 50% of scarf purchases. As such, retailers will want to be sure to stock up on the wide variety of patterns that appeal to men. Best-selling styles for men include plaid and houndstooth patterns.

Another sizable market group not to be discounted is buyers under the age of 34. According to Accessories Magazine/NPD’s “2009 Census Report,” scarf-sporting
celebrities have inspired more teens and young adults to accessorize with scarves. Consumers aged 13-34 accounted for 60% or more of the dollar and unit sales for scarves/mufflers in 2009. Overall, the classification has shown the biggest unit gains of any accessory. Also of note: Approximately 40% of the dollar sales last year were from scarves in the $10-$19.99 range.

Coury advises retailers to carry approximately 250-275 scarves and pashminas in varying colors and patterns on their units. CE’s selection is much larger—there are 35 solid colors alone to choose from—but retailers don’t want to carry too much and overwhelm the customer. With the recommended number of display items, carts are inviting, easy to shop and manage to encourage “repeat multiple purchases,” according to Coury. He says many customers return to purchase additional colors and patterns.

Sales wrapped up

CE guarantees all of its products. Pashminas come in individually sealed packages. If one is found to be defective, notes Coury, it can be sent back for a replacement. Other
support services include a customer support telephone number, manned from 9 a.m.-5 p.m. PST.

CE does not introduce new styles during the selling season.They can, however, adjust the mix for the following year, adding quantities to popular styles that may have sold out quickly.

In every aspect of the business, CE aims to give retailers an authentic experience. “We are confident we can put someone in a cart and they are going to make a profit. If they put time and effort into it, they won’t lose,” says Coury.

By all indications it appears that Cashmere Elegance and the retailers who join their team have this holiday season all wrapped up.

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