Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue.
The Toronto fabric and fashion store Peach Berserk is still running, 19 years strong – but owner Kingi Carpenter can’t stop fighting rumours that it has shut down.
That’s because, in May of last year, she closed its prominent retail store on Queen Street West. The shop was a landmark in the area, with its neon storefront showcasing electric-coloured dresses. But after nearly two decades, Ms. Carpenter needed a change.
She decided to forgo the nearly $10,000 in rent she paid, and all the insurance and utility costs, and moved the business into a rented home-based studio a little farther west. She still sells the same custom-made dresses and accessories in wild colours and hand-screened prints, just in an environment that’s a little more personal – and cost-effective. She still has employees – three full-time and five part-time, with six fashion co-op students.
But the transition hasn’t been so great for business. While she has the same disposable income as before, she has less work. Customers who pass by the former retail shop assume Peach Berserk is gone for good, and people offer her sympathy. “I guess you don’t like retail,” one person told her. “I heard it tanked,” another said.
Today she pays about $3,000 a month in rent for her combination home and studio – and the atmosphere is a lot more relaxed. “If you’re busy worrying about your rising bills, it takes away from your creativity,” she says. “I get up in the morning, have a cup of coffee, work on my own terms, live a great lifestyle, spend more time with my kid and have really interesting fashion in Toronto.”
There’s no sign at her new home studio, but customers can find out about Peach Berserk on Google, Facebook and Twitter, and book appointments to find the custom clothing of their dreams. (About 25 per cent of her sales are conducted exclusively online.) Visitors to the studio are surrounded by dozens of paintings and dresses in every colour and pattern imaginable. She even once designed a wedding dress patterned with the husband-to-be’s tattoos.
Ms. Carpenter doesn’t believe she has taken a step back. To her, selling one-of-a-kind clothing lends itself to one-on-one interaction. “I’ve freed myself up, I love the change. But it goes against what the rest of the world thinks is success,” she says.
First, Ms. Carpenter wants to demonstrate that her business is alive and well, and for customers to feel just as comfortable shopping in her home as they were in the retail location. Then she wants to prove it’s viable, and boost Peach Berserk’s sales to where they once were with a storefront. Sales revenue today is about 60 per cent of the $400,000 she used to ring up annually.
But she’s not sure how to proceed. Better advertising online? A greater social media presence? Search engine optimization? An app that lets you design a dress, from the fit to the pattern to the style?
Ultimately, she wants to prove that a small, custom retailer can thrive without brick and mortar in 2013. “I could have something amazing if I could just crack the code,” she says. “And if I can get sales numbers even close to where they used to be, I could actually not live on cat food in my retirement.”
The challenge: How can a home-based, niche retail operation expand sales without a prominent storefront?
THE EXPERTS WEIGH IN
Karinna Nobbs, senior lecturer, fashion branding and retail strategy, London College of Fashion at Britain’s University of the Arts London
A home-based niche brand can certainly expand sales without a permanent physical presence, but it means stepping up the PR and marketing activity. Fashion “e-tailers” generally tend to have much higher promotional budgets than brick and mortar stores, as they don’t have the physical stores to remind and attract consumers to the brand.
Within this challenge, there are three key aspects that Ms. Carpenter could consider. The first is the perception that she has gone out of business. I would suggest that she create a social media campaign about how her business is moving from a retail to a “me-tail” model highlighting even more personal service, allowing them a unique insight into the creative design process in the studio and demonstrating how much added value this gives. Testimonials from customers would enhance its share-ability.