Boutiques’ Recession Cost Cutting Methods

From Saks Fifth Avenue’s massive job cuts to Lucky Brand’s diversion of ad dollars online, big brands are taking drastic money-saving measures in this downward-spiraling economy. But for small, independent retailers, who count minimal staff and non-existent print advertising as the norm, more creative steps have been taken to rein in spending. We spoke with a few such retailers across the country and found that each one’s cash conservation techniques are as different as the goods on their shelves.

For some, simply cutting back on little luxuries can help save a surprising sum. “I’m just trying to save wherever I can,” says Melissa Richardson, proprietor of LA’s Beckley, who credits cuts in fresh flowers, customer valet, employee parking and overtime with saving “a few thousand dollars a month.” Jenny Chung, of San Francisco’s Acrimony, has cut back on professional photography expenses, explaining: “I figured the raw look of amateur-style photography would cut way back on costs and add a little bit of character to our lifestyle image. I don’t think we’ll lose anything here.”

In a similar bid to enhance her brand’s image—and, in turn, build customer loyalty—Chung has started investing a bigger portion of her budget towards in-store events. “Most shops are cutting back on their entertainment budgets, but we’re actually upping ours,” she says. “Our most lucrative events are in-store parties sponsored by fashion labels. Image is all it takes to turn window shoppers into consumers. It’s also free press and a reason to turn around the winter blues.” In addition to a February party sponsored by Vice magazine, Chung is planning at least four major events throughout the coming year.

Both Beckley and Acrimony seek to cut costs in the wholesale arena, but are doing so in very different ways. “We’ve asked vendors for 10% discounts if merchandise is paid for prior to shipment,” says Richardson, who is focusing on US designers for the Fall 2009 season to avoid crippling taxes and exchange rates. Chung, on the other hand, is taking the opposite tack, working on consignment with up-and-coming designers eager to be represented alongside established labels such as Sophomore, Endovanera and Chalayan by Hussein Chalayan.

But, at the end of the day, the customer is always right—an ethos that seems to be each boutique’s sure-fire bet for minimizing financial risk. “We are becoming extremely selective and streamlining our buy to have the items our clients are requesting,” says Richardson, who adds that she’ll balance the bulk of safe bets with “a few smaller risks.”

Candice Waldron, of Brooklyn’s Jumelle, has also revised her buying plans to include a smaller inventory budget—one of the few adjustments she’s made in light of the recession. Says the self-proclaimed financial conservative: “I keep a very tight edit on my buying selection each season as this has the most appeal for customers. Over-crowded racks, shelves and too many options are overwhelming.” But, even so, Waldron is careful not to let her selection of cult labels suffer. “It is integral that I maintain a solid, thorough and broad representation of my favorite lines, customer favorites, best-sellers and new lines that I’m excited about,” she says—proving that, with the right attitude, budgeting can be far from boring.

—Erin Magner