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Details on Industry Insight.
I reported in November that Becker Surf was going to close its Huntington Beach store after its lease expired because it was an underperforming store and the landlord was unwilling to lower the rent.
It turns out that the store has stayed open, but under a different format called "Becker's Basement." Becker co-owner Dave Hollander said this has changed the performance and economics of the store. I asked him to explain why he decided to switch the store into an outlet and what the response has been.
Here's what Dave had to say:
"We decided to leave the store open because as we started our clearance promotion, we finally saw for a fact what we had always suspected - that the majority HB customer had been conditioned to buy things at a discount because there are always so many sales events in that area during the year, discount cards etc.
"We put our heads together and decided if we could rework the expense structure of the store, and offer our local customer (we get no tourists at all in that location) a 'bargain' that we could make a solid go at a new concept 'Becker Basement.' We had the store, we had the people and the buildout.
"Although the whole format of the store is a work in progress, it is doing so well that my guys are pushing to open more. We are being offered amazing retail locations at mindblowing lease rates almost every day, and that does play into the concept (lower expenses). But, I am opposed to opening more, as I think the offprice situation in our industry is going to swing to the other extreme. I feel that later this year decent offprice goods are going to pretty much dry up. Until we are assured a steady stream of goods at offprice prices (that could be part of the evolution of this - a multibranded outlet store concept supported by several key manufacturers), I am in no hurry to take the concept past our one store. In fact, in this environment I am in no hurry to do anything.
"It should be noted that if you take surfboards out of the equation our Basement store has much better margins than our other stores. We run at over keystone. And, nothing in the store is current season. Everything is at least a season old."