When small is good

Associated Press

Business has been so good at Isle of You, a clothing boutique in Lexington, Ky., that its owners have placed re-orders with manufacturers, something a lot of big retailers didn’t do this tough selling season.

The store’s success, and that of several other independent retailers, shows that even small companies can beat the recession with a well-executed strategy of providing unique merchandise, good customer service and adjusting quickly to changes in business.

Lori Houlihan, co-owner of Isle of You, said her total business this year was similar to last year’s, with one difference. “People are buying more practical things,” she said in a recent interview. “Instead of evening dresses and luxury kind of items, we’re selling more sweaters and blue jeans.”

Isle of You, located in a former gas station, sells funky fashions, very different from those found in a mall. The store’s strength after Sept. 11 came as something of a surprise, Houlihan said. “We ended up doing a lot of special orders.”

Her holiday season has been a contrast with that of many retailers, including big department and clothing store chains that found it hard to move merchandise without deep discounts. Their reorders have been rare.

Unique merchandise is also what worked for The Ark, a pair of toy stores in San Francisco and Berkeley, Calif. Owner Pamela Byars selects educational toys, wooden toys, art supplies and puppets, but not the Barbies and Harry Potter toys in demand at Wal-Mart and Toys R Us.

“I have things that you just can’t find at other places easily,” she said.

Byars said business at her San Francisco store was a little soft this Christmas season, but in general, “It feels OK.”

Adjusting to a changing economy has helped Imagery, a clothing and home furnishings retailer in Kansas City, Mo.

“We’ve scaled back on expensive items,” owner Al Crumly said. “Customers are still spending and we’ve tried to accommodate them by not being so pricey.”

Crumly said his store also targets young people “who don’t have kids or car payments. One of their priorities in life is buying new clothes.” And his location, in a downtown area, away from the malls, has been another benefit.

Location has also kept business solid at Curio Cabinet, a store that sells collectibles in Worthington, Ohio, near Columbus. Manager Nicki Budin said business has been strong except for a dip at Thanksgiving.

“But it’s come back again,” she said. “I think maybe people are tired of mall shopping and specialty stores.”

Many mall-based stores struggled this season for several reasons, including shoppers’ nervousness after Sept. 11, but also because many mall retailers, particularly department stores, tend to stock the same or similar fashions and labels.

Still, there are stores inside malls that are thriving. At Calypso, a store that sells home furnishings in the Valley West Mall in West Des Moines, Iowa, business was strong before Sept. 11 and has remained that way, said Melody Barkley, an owner of the store.

Barkley said sales also have been unaffected by the economy; the market segment her store targets is still spending.

“This is an upscale mall,” she said. “We didn’t feel that the people who shop here would be affected by what’s going on in the world.”