The shine has hardly worn off for made-in-America retailer Shinola, which opened its site for sales less than two years ago.
Continue Reading Below
In that time, the Detroit-based company has successfully revived an old American brand with its watches, bicycles and leather goods. Shinola CEO Steve Bock, a four-year veteran of Fossil, says the company is on track to do $60 million in revenue this year -- up from $20 million in 2013.
“In 2013, we produced about 55,000 watches,” Bock said. “This year, we will have assembled over 150,000 watches.”
While retailers from Abercrombie & Fitch and Gap to J.C. Penney and Sears have been closing stores over the last few years, Shinola is opening them -- and plans to continue making a serious investment in brick-and-mortar locations.
At this point last year, Shinola had retail locations in Detroit and New York City. Twelve months later, Shinola has set up shop in Minneapolis, Washington, D.C., Los Angeles and London, and is about to open a store in Chicago as well. And for the next few years, Bock said Shinola will continue to open stores at a rate of about five to six locations annually.
Though Shinola is sold in high-end department stores in the U.S. (Neiman Marcus, Nordstrom, Saks Fifth Avenue and Bloomingdales) and in Europe (Liberty of London, Colette and Le Bon Marche), Bock says having standalone Shinola stores offers a better introduction to the revived brand.
Continue Reading Below
“We really feel that Shinola offers a very unique shopping experience … and that the story is best told and best shown to our customers from coast to coast [in the stores],” Bock said. “Customers go into our stores and understand the totality of what we do and sees an array of products … By going into our stores or being introduced through our website -- the combination really tells the tale and shows the value of everything that goes into a Shinola product.”
Bock wouldn’t discuss which cities Shinola is set to open in next year but said he was currently in negotiations on specific spaces. While the company’s plan is to open as many as six stores over subsequent years, Bock said he would delay future openings if it were to mean sacrificing on location quality. Shinola stores have opened in very hip neighborhoods: Silver Lake in Los Angeles, Tribeca in New York City and on 14th St. in Washington, D.C.
Even though so many retailers are moving away from brick-and-mortar, Kantar Retail Chief Knowledge Officer Bryan Gildenberg says this approach is a smart move for the growing company.
“What it seems like the crew is trying to do is they’re trying to relaunch an iconic brand by giving it texture and meaning. If you look at the stores as a physical distribution strategy, it doesn’t make sense,” Gildenberg said. “But they are using them as a brand equity strategy -- and that model is as old as retail itself.”
And compared to other types of marketing or advertising strategies, Gildenberg said physical stores done well can, of course, pay for themselves.
“The nice thing about this platform is that … if you can manage it to some sort of cash flow, it’s a relatively inexpensive way of advertising versus a television spot,” he said. “But it doesn’t accomplish its purpose if it’s not well-run.”
From the sound of it, however, Shinola seems to be figuring out the correct approach to brick-and-mortar. Bock said the 4,500-square-foot Detroit store will expand to 1,100-square-feet next year and will continue to focus on being a community space -- rather than solely geared toward selling product.
“You can go in there and have a cup of coffee. We’re not really driven by selling a specific amount on a daily basis. You can go, relax, enjoy and understand the concept,” Bock said.
With that said, Bock says the Detroit flagship store’s sales are none too shabby, attracting a mix of both locals and tourists.
“It does 2.5 times the volume as our Tribeca store, and Tribeca is a very successful operation,” he offered.
Going into 2015, Bock is focused on scaling -- while still maintaining the company’s emphasis on quality. In addition to offering more leather goods products made in the U.S., Shinola will likely produce more than 200,000 watches next year, up from 150,000 in 2014.
“We’re increasingly becoming more efficient and we’re in very good shape for next year. We need to keep working at that, and see where it leads us,” he added.