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Winter 2014 Enduring Industry Stars: Two Companies, One Product Category and Vastly Different Journeys

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Concepts come and go in the specialty retail industry. That is par for the course in an industry that is fueled by product fads and short-term trends. However, amidst a sea of rapidly changing products, there are a handful of products and companies that have had staying power. One of those product categories is sunglasses. We take a look at two market leaders—NYS Collection and SolarX Eyewear to compare and contrast the business strategies that have made both companies enduring industry stars.

NYS Collection: A look back

NYSPicture3-copyExactly one decade ago, Specialty Retail Report profiled two dynamic entrepreneurs—Sal Babbino and Marc Behar of NYS Collection. This enterprising duo grew up within shouting distance from one another in Brooklyn.  At the very young age of 10, they started working together selling flowers and newspapers on the street corner. After college, Babbino set up an embroidery business on a cart and Behar joined Wall Street. However, looking to join his friend’s entrepreneurial enterprise, Behar joined Babbino and so began their journey together.

When we last profiled NYS Collection in the magazine, they gave this advice to cart retailers: “Treat your cart as a store and not a cart. Treat it as a viable business.”

Evolution is key

Heeding their own advice, NYS Collection has grown the business since their start in 1996, by evolving with the needs of the industry. Today the business includes maintaining a handful of cart locations so they can stay in touch with the needs of specialty retailers and consumers, selling products wholesale and offering franchise opportunities as well.

“Part of our evolution is helping retailers to re-invent themselves,” Behar says. He explains that while permanent stores might change every month, many cart retailers stay the same, repeating products and visual displays month after month. Behar and Babbino attest to the importance of changing visual merchandising displays regularly, offering various sales promotions to incentivize consumers to buy and even renewing the signage every month.

Behar and Babbino have mastered the art and science of cart retailing. “Our franchisees do on average 30% to 50% higher sales due to the corporate training we provide, new visual merchandising displays and the tremendous marketing support that we can offer them,” Behar says.

They also attribute recent retail growth to the implementation of a new POS system. “The new system is helping our retailers work smarter, not harder,” Behar says. The system not only helps retailers determine best sellers, it also helps the NYS corporate team identify trends and respond accordingly.  Additionally it helps operators save time on processing payroll hours and employee scheduling. “It’s freed retailers to master sales because they don’t have to spend as much time on the operations,” Babbino points out.

A year-round business

NYS Collection operates their cart locations year round and encourages their retail operators to do the same.

Over the years, Babbino and Behar have learned how to make December a great sales month. One of the marketing ideas that they have implemented includes developing a “wish list” card that consumers can complete to give to family and friends for gift ideas.

They also discourage retailers from discounting sunglasses as part of their year-round strategy. “We don’t agree with heavy discounting. It builds a poor brand message and it conditions the customer to expect a sale,” Babbino says.

Testing the waters

snglas)redWhen we spoke with Babbino and Behar ten years ago they were hoping to grow their business internationally. Currently, they have franchises operating internationally. The franchise decision “helped strengthen the brand and increase sales via multiple retail price points, training, kiosks, and exclusive lines of eyewear all with no royalties to the franchisee.”

NYS has also started testing custom kiosks in lieu of RMUs in some shopping centers. This approach gives a more upscale look, differentiates them from the RMUs in the center and leads to a slightly higher employee retention rate. Another added benefit according to Behar is that it allows them to have more signage on the unit to effectively promote the three different price points that they offer. Ninety percent of NYS’s business is still done from RMUs.

When asked if they have tested any small temporary stores, they said that “a very small store space works best—500 sq. ft. or less.” A high-traffic location with very reasonable mall rents is ideal. While they currently operate ten temporary store locations, NYS is still in an experimental mode with this type of store format.

Behar and Babbino have also implemented very innovative branding and licensing deals. For example, NYS executed an agreement with the New York Times to launch a pair of reading glasses with the prestigious paper’s name. The company’s comprehensive accessory and readers line is a booming part of its business. NYS also signed a deal directly with Viacom for a Jersey Shore line and a separate deal was made with Snooki for her line, Babbino says. In addition, a manufacturer’s agreement is in place for Shaquille O’Neil’s line of eyewear.

Since their start in 1996, NYS has now grown to corner a sizeable two-thirds of the sunglasses market in the specialty retail segment. Signing national deals for the past eight years and increasing the range of products, have helped. A new high-quality line allows retailers to charge a higher retail price, which raises the average retail ticket, Babbino points out.

“We are always exploring ways of re-inventing our company. Whether it’s through our sales pitch, our products, our pricing or our visual merchandising displays. We are even in the process of testing things right now.”

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Patricia Norins

Norins is the founder and publisher of two national trade magazines and two trade shows. Specialty Retail Report, the voice of the specialty retail industry (carts, kiosks and temporary in-line stores) has a readership of more than 75,000 and GIFT SHOP, the magazine for independent gift shop owners, has a readership of more than 60,000. She also serves as consultant to small independent retailers across the country.

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