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Despite Bumps, Some New Retailers Had a Good Holiday Season
BY JOYCE M. ROSENBERG

A small business' first year is bound to be difficult, with plenty of trial and error for even the most carefully planned venture. For independent retailers, a first holiday season can be particularly bumpy -- even harrowing at times.

Five new merchants interviewed by The Associated Press said they were pleased with their results from the just -ended season -- they all managed to weather the uncertain economic climate. But most had a few uneasy moments, the kind of birthing pains that new retail businesses have.

The season turned out extremely well for Dolce, an Atlanta store that sells
Weiss said she had underestimated the last-minute crush of orders, including two 30-basket orders from corporate customers the Thursday before Christmas. She had to reorder pretzels, dipping mustard and other food -- and find substitutes when vendors had run out.

"We had no idea how to buy for this first holiday season," said Weiss, who opened her store on June 20. But she said the store managed to get every order filled and out on time, and she described the season as "fabulous."

Looking ahead, Weiss is thinking about the adjustments she will need to make.

"We imagine every holiday getting bigger next year as more people get to know us," she said.

Near-disaster struck Eric and Bill Loiacano two weeks before they were to open their store in Gloucester, Mass., in November -- the space they were renting wasn't ready.

So the brothers found a location across the street and hastily created a new version of The Fashion Fish, an off-price clothing store. The space wasn't built for a retailer, so the Loiacanos took each room and named it for a street in Gloucester. The result, Eric said, was "a fun experience."

Once that problem was dealt with, The Fashion Fish had a great season. The Loiacanos had bet correctly that the store would be popular with local residents because there are so few places in town to shop.

Eric said, however, the season was a learning experience -- the brothers found that some of their assumptions about what customers were looking for were wrong. "We had one image in mind, and we found out that our customer was a little different," he said.

Michelle and Daniel Lehmann opened their home furnishings store, Clio, in Manhattan's trendy Soho neighborhood in July.

"It gave us time to understand everything, to understand inventory. So we were prepared for Christmas," Michelle said.

She said of Clio's first holiday season, "It went great." But the Lehmanns discovered they were still on a learning curve.

First, a big shipment of ceramics they ordered from France, promised to them within six weeks, took five months to arrive. In the meantime, the look of the store had changed as the Lehmanns' taste in merchandise evolved to match their customers' tastes.

"We've sold some pieces [from France]," Michelle said. "But we find our customers are more attracted to the other items."

Other merchandise sold out, a pleasant surprise. "We're learning how to order, so we can be even better next year," she said.

Online retailers have their own first holiday season frustrations.

Gourmet Food Mall went live online in September, well in time for the start of the season. But right after Thanksgiving, 95 percent of shoppers started abandoning their online shopping carts, which means no sale. "It was pretty scary," said Tom Martin, director of marketing for the New Orleans-based company whose Web address is www.gourmetfoodmall.com.

The problem, Martin said, was that one of the pages in the checkout process had words like "membership" and "club," which apparently turned many shoppers off. The page was quickly redone, and business picked up, putting Gourmet Food Mall in a strong position for the next big holiday, Valentine's Day, Martin said.

Even when a season goes well for a new store, questions can linger after the rush is over.

Good planning helped Rick Garofalo when he opened Flou, a store devoted to bedroom furnishings and loungewear in Soho. Garofalo was a retailing veteran, but this store, which sells only merchandise manufactured by the Italian company Flou, was a departure from his two design and home furnishings stores, Repertoire, located in New York and Boston.

Flou opened in November, and holiday business was surprisingly strong. Garofalo attributed his store's success in part to being "the new blonde, the new kid on the block," but said advertising also helped.

One move he's not sure about was renting a store that's bigger than he needs. It's a great space, and drew the customers, but, Garofalo said, "I think it's a gulp of a rent." He has to wait and see what that will do to his margins.