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When Is Your Liquidation Sale?

December 8, 2012
Recently, as I was talking to a rep on the phone, I received a Casual Living eblast with a headline that blew my mind: “The Greenhouse Mall liquidating after 35 years in business.” The headline was so earth shattering to me that almost hung up the phone without saying goodbye to read the article. As it turns out, the headline was very misleading. It implied The Greenhouse Mall was liquidating and closing. Instead, they are liquidating all of their inventory, remerchandising their locations, and reopening under a new, more appropriate name.

About a month ago, I had the opportunity to talk with Karen Galindo, owner of The Greenhouse Mall about something completely unrelated to the liquidation sale. The conversation turned (well, not so much turned as was led by nosy me) to what she was doing with her business. What she said to me had almost as profound an effect as the original headline in Casual Living.

For those of you who don’t know Karen, you should. She and her family have been in the industry for years. Not only is she one of the best merchants I have ever met, she takes a strong interest in the industry. She was on the board of CFR and now ICFA. In addition, she is willing to share her retail experience with other retailers.  The industry has honored her with several Apollo awards and even more nominations. She is the retailer’s retailer. So, when she started to tell me what she was doing and why, I paid close attention.

First of all, she put to rest the rumor that they were closing. She understood that by running a liquidation sale and changing her trade name people would think she was going out of business. But that was a risk she was willing to take to make her business compatible with 21st century consumer shopping trends. She felt she had to address three things to do this.

First, her trade name. She has worked hard and spent lots of money establishing her brand. But her customers are coming from a younger generation and most are unfamiliar with her name. Also, the name is confusing since she no longer sells greenhouses nor is she a mall or in a mall. If ever there was a convenient time to make the change, it is now.

Second, her inventory. She faced two problems; an inventory that included pieces so old she didn’t even know she had them and an unwieldy number of sku’s. The former is easy to address by having a liquidation sale. The later requires a new direction in buying. She explained that the specialty outdoor retail model she followed for years was to offer a whole lot of lines and a lot of designs from each line. Like most of us, she felt she had to carry as much as she could fit in the store to be credible in her customers' eyes.

It was a workable model for years. But now, she is finding some customers are leaving without buying because they become confused and overwhelmed by her breadth of selection. She wants to make their buying decisions easier by offering less but making sure what she offers is what consumers want. Makes sense to me. I think about 80% of my sales come from about 50% of my inventory.

Which leads to the third and final area, she wants to change her customer’s shopping experience. She wants her floor to have a less crowded “retail” look and to reflect how consumers will actually use the furniture at their homes. This will be the most expensive part of what she is doing. She is going to remodel all of her stores to make them look like design centers rather than old time retail stores. This includes changing lighting, creating vignettes, using new surface materials and colors, and updating flooring. We always say we want the customer to see the furniture on our floors as they would at their house. This is what she wants to achieve.

Everything Karen is doing is risky and expensive. She wouldn’t be doing it if she didn’t think it was necessary to her continued survival. If anyone can carry this off, it will be Karen. Her explanation of why and what she is doing hammered home that we all ahve to make ourselves more relevant to today’s clients.

Yours in confused retailing, Bruce