Starting from scratch
|Hard-core research was the first step for two long-time friends who wanted to turn their idea into reality.|
Like many long-time friends, Leila Blumberg and Heather Savoy had often talked of opening a retail business together. But how do you turn a pipe dream into an upscale lingerie boutique in a prime location with high-end merchandise?
In a word, it's tough. But for Blumberg and Savoy the key to making it happen was a combination of painstaking research, careful planning and a dynamite retail consultant who created for the women a blueprint that detailed down to the last penny how much they should spend on their initial order of bras.
“You don't know how to get started,” says Savoy, a mother of three who has been friends with Blumberg since high school. “It takes a lot of energy and effort and stress.”
That said, the pair is now in its third month of operating Privé, the lingerie store they opened in Towne Center at Cedar Lodge in late January. It hasn't been exactly as they'd imagined. Their opening was delayed more than a month, and they're still figuring out which items sell—and which ones don't. So far, sales figures are exceeding projections.
“So far for us, everything has been very positive and everyone has been very positive,” Savoy says.
Neither one is sure where the idea actually came from. Both have sales backgrounds—Blumberg worked in advertising and Savoy in real estate—and both had wanted to open a shop together since their days at St. Joseph's Academy. Both say they hit upon the idea of a lingerie store separately.
They wanted a store that was “classy” and appealed to women of multiple generations who were willing to fork over a little extra for undergarments that not only look good but fit well. Most important, they wanted to focus on customer service, something not found in department stores and Victoria's Secret catalogs.
“Once we knew what we wanted to do, we realized it was time to get serious,” Blumberg says.
Beginning last July, the pair gathered every night at Savoy's house for a home-cooked dinner and an intensive Internet session that often stretched until 2 a.m. The online research helped them determine what kind of merchandise they wanted to carry, what brands they wanted to buy and which lines of particular brands. They learned about marketing and what it would take to get there.
“We found out that 80% of retail businesses fail in the first year,” Blumberg says. “We also found out it's more important to know what will cripple you than what will help you succeed.”
Late in the summer, they drew up a business plan and hired a retail consultant. They chose New Orleans-based Steve Fingerman of Avalon Retail Consulting after talking to several Baton Rouge retailers who recommended him. With clients across the U.S. and in Latin America, Fingerman's expertise didn't come cheap. His fees range from several hundred to a few thousand a month, depending on the client. But for Blumberg and Savoy, the money was well worth it.
For starters, he ran numbers for the pair, telling them how much debt they could comfortably shoulder, how much revenue they should take in, when they could expect to break even and when they could hope to see a profit. Next, he drew up for them a strict pre-opening budget, detailing how much to spend on construction, fixtures, payroll and merchandise.
Fingerman also helped the pair break down their merchandise into specific classes, including fashion lingerie, hosiery, sleepwear, basic panties, basic bras, accessories, camisoles and slips, sleepwear and swimwear. Perhaps most important, he told them how much to buy of each class and how much to spend on it.
“We did so well that we ended up coming in below budget, which gave us the ability to get more merchandise,” Savoy says.
Blumberg and Savoy had already decided they wanted their new store to be in Towne Center, which caters to the high-end customers they wanted to attract. The location also was ideal because there are no other lingerie stories in the center—or anywhere else in the area for that matter.
Towne Center management agreed they were a good fit, showing the pair three potential locations for Privé. Blumberg favored a space that opened to the front of the shopping center. But shopping center management thought they would be better suited to one of the spaces that opened onto a side alley. Much of the build out in the 1,350-square-foot location they eventually chose was already done, which cut down on construction costs.
The next big step the pair needed to take was to acquire financing, which is one of the most intimidating aspects of opening a retail business. For Blumberg and Savoy, however, it was easier than expected. They approached just two banks and got an immediate call back from one of them, Business First. The bank offered what Savoy describes as “very reasonable” terms on a five-year, $100,000-plus loan. Already they have started to pay it off.
“That is our goal, first and foremost, to pay off our debt,” Savoy says.
Fingerman also advised the pair to take out a line of credit, something they were not initially inclined to do.
“One of the biggest things that kills any type of business is they don't plan to have enough cash until they ramp their business up,” Fingerman says. “You can do everything right but you can't predict the time or response from the customer, so you have to manage that and have deep pockets to create that level of revenue that you need.”
Somewhere along the way—and it's all sort of a blur when they look back on it now—Blumberg and Savoy realized they needed to come up with a name for their business. Again, the Internet was instrumental. They wanted something French or Italian, so they began looking up words in those languages that conveyed the concepts of sexy, intimate, private and personal. When “privé” came up on Google translator, they knew they had a winner.
Another major step came when Blumberg left her job in advertising sales to devote her efforts full-time to the shop. That was hard. But once she realized Privé was going to become a reality, she knew it was time to go. She resigned in November.
For her part, Savoy still is associated with her family's real estate business. She also has three boys, ages 12, 8 and 2, who take up a lot of her time. So the pair decided that Blumberg would run the shop full-time, and Savoy would do some of her work from home.
“For me, this is the right time in my life to do this,” Blumberg says. “I felt like it was now or never.”
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