by Claire Coghlan
At some point, many studio owners weigh whether or not adding retail space is the next logical step in the evolution of their businesses. Just because everyone else is doing it, however, doesn’t necessarily mean it’s a good idea for you. Like anything else, knowledge is king, so we polled a panel of experts to share their experiences and insights—and help you weigh the pros, cons, possibilities and pitfalls of going retail.
“Don’t buy too much of anything to begin with,” cautions Lili Viola, who added a small retail space (two wall shelves/racks and a revolving display) to her eponymous 600-square-foot studio in a two-story walk-up on a major street in Toronto in the spring of 2014. Viola recommends testing out the market to see what need you can meet without going too much into debt: “Start with smaller quantities and color selections, and grow from there.”
Not only does starting with a small selection ensure you don’t carry too much inventory, which eats up cash, it also adds an element of exclusivity, says Stephanie Ellis, owner of five Florida studios, including Pilates of Boca, a three-bay studio housing a Pilates studio, yoga/Xtend Barre studio, and a spinning, TRX and treadmill studio (each of which is 1,000 square feet). A 400-square-foot reception area with a large retail display consists of a slat wall with cascading display sticks on felt black hangers. “We don’t buy more than six pieces of each style,” says Ellis. “This allows us to sell it while it’s hot. Our clients joke to each other, ‘you better buy it if you want it, because it’ll be gone tomorrow!’”
Patricia Welter, who’s carried retail since opening Suncoast Pilates, a 2,000-square-foot studio in a strip mall in Palm Harbor, FL, 18 years ago, suggests starting out with affordable, ancillary products. “In a small studio, you’ll want to carry items that turn over quickly.” The hottest ticket in her space (a five-shelf unit on a side wall, an open area for larger items and a T-stand for clothing) is Pilates socks. “ToeSox, Pointe Studio and Shashi all sell well,” says Welter, who also enjoys steady sales of WAG wrist guards, OPTP foam rollers, Magic Circles, flex bands, journals and DVDs.
Use your natural resources.
For most owners, setting up shop was a homegrown affair. “My husband and I designed our retail center,” says Welter, who purchased shelving from a local furniture store that can be easily moved around to accommodate workshops.
Viola also kept it in the family. “My husband put up the shelves. I merchandised the goods. I do all the buying. End of story.”
Sandy Shimoda, co-owner of Vintage Pilates, a 1,500-square-foot space on the ground level of a three-story office building in Los Angeles, had her landlord do the heavy lifting. “We negotiated building improvements with our lease, which allowed us to make changes to the existing space without incurring any expense,” explains Shimoda. She asked the landlord to build a shelf, on which she displays vintage baskets with clothing, plus add an area to hang clothing samples. Since adding retail in 2011, they’ve installed additional shelves with vintage baskets for books, small lifestyle items and DVDs. She and her business partner, Karen Frischmann, do all their own buying, but hired a studio manager with experience in retail merchandising and sales, on whom they will rely as the retail side of the business grows.
Melissa Flynn, a former apparel buyer, also does the purchasing for Ocotillo Pilates, her 3,000-square-foot studio located within an upscale retail plaza in Chandler, AZ. “I feel like I have my finger on the pulse of our clients enough to know what they like,” explains Flynn, who set up a 500-square-foot retail space of freestanding clothing racks and shelves in the waiting area of her studio in 2010.
Follow your heart.
Viola was her own first customer: “I added retail because I couldn’t find what I wanted in Toronto!” she says. Namely, Pilates Nerd (she became their first retailer), Elisabetta Rogiani (it’s available at only two other locations in Canada) and ToeSox (previously exclusive to a handful of Pilates, yoga and barre studios). Clients, she discovered, quickly followed: “They loved what I was wearing, and liked that they didn’t have to order online and deal with waiting, shipping, etc.” They also loved that she made things easy: “The leg warmers, socks and leggings are color coordinated to create a seamless, pulled-together look.”
Ellis, too, has found that clients appreciate streamlining and simplification. “We sell complete looks from our favorite brands, so clients don’t have to think what top will go with their favorite new bottom,” she says, listing Lululemon Athletica, Hard Tail Forever, Alo, Peace Love World and Michael Stars as a few of the most wanted.
Color is the new black.
“For many years, black was always the most popular color—black socks, black tops, black leggings,” says Flynn. Not anymore. “Now, clients love anything bright, bold and unique. Anything with pizzazz sells.” At Lili Viola Pilates, greens, blues, purples and deep corals/oranges are selling “very well.”
Ellis agrees. “Our clients are fashion forward. Our buyer follows all the latest trends in the magazines and runway shows, and that’s why we have such great success. Some clients come to Pilates of Boca just to shop!” Right now, her top-selling pieces are of-the-moment leggings and capris with colorful prints, tops with interesting cutouts, and pants and tops with perforations and mesh detailing.
Welter, a former buyer for a chain of department stores, was cognizant that a small Pilates studio isn’t capable of attracting the same volume of foot traffic. “I knew I’d have to be very smart regarding the number of items and sizes we carry,” she says. For most studios, that means stocking small, medium and large only, though they will special order other sizes for clients.
“Anything we carry needs to sell,” says Flynn. “Keeping clothes on the shelf costs me money—and that’s not feasible.”
Differentiate your merchandise.
While big brands are always a hit with customers (studio owners have enjoyed strong sales with Elisabetta Rogiani, Pilates Nerd, ToeSox, Lorna Jane, Splits 59, Onzie, Lululemon Athletica, Hard Tail Forever, Alo, Peace Love World and Michael Stars), Viola says it’s important to create a niche: “Try and buy local when possible, but most importantly, source good quality and rare items that set you apart.”
Ellis sources some of her best finds via customers. “Our clients travel the world. We’ve been introduced to many new brands by them.” When a client came to the studio wearing KiraGrace, Ellis so loved the look, she contacted the company that day. “It’s now one of our favorite brands,” says Ellis, who was introduced to Peace Love World by one of the Real Housewives of New Jersey. “In 2010, she came to work out wearing PLW. From that day forward, it’s been one of our top sellers!”
Shimoda agrees that paying attention to your customer is key. “More than half of our clients are teachers,” she says. “Therefore, we’ve found it pertinent to sell books and DVDs that further educate instructors on Pilates.” (She and Frischmann are now writing a book on Pilates fundamentals, to be released in 2015.)
Choose vendors wisely.
“The most important thing to consider when opting to sell retail is the purchasing agreement,” says Flynn. “Are you required to buy packs of clothing, like a bundle with set sizes (for example, two each of extra-small, small, medium and large), or can you pick the sizes you think will sell at your studio? Buying in bundles is always a mistake; you’ll be left with sizes that just don’t work for your client base. Opt for companies that allow you specify sizes and quantities.”
Adds Welter: “Be cautious of a clothing line that requires a minimum investment. And be sure that the clothing line accepts returns on defects.” Ellis learned the hard way that working with vendors who are organized, flexible and accessible prevents many headaches. “If reps don’t respond to emails within 48 hours, or if they refuse to allow exchanges for different sizes or colors, then they may not be the right fit for a small boutique like ours,” she says.
At the end of the day, our experts unanimously agree there’s one huge benefit of adding retail space: customer satisfaction and loyalty. Says Flynn, “Selling retail is unlikely to make you rich—but it will add more benefit to an already successful studio. It’s one more courtesy we offer our clientele.”
Most describe the money they make as a small, complementary revenue stream—not nearly enough to give up their day jobs. Though there are exceptions: Ellis reports that Pilates of Boca, “typically sells $1,000 to $2,000 per day of retail across our studios.”
Even more important is the intrinsic value of retail. As Ellis puts it, “adding retail definitely helped our brand, reputation and business overall. Women love a one-stop shop! What could be more fun and convenient than coming to your favorite place to work out and leaving an hour later with a new favorite item?”
A surprising side benefit? “Husbands can pop in and grab an item to give along with a studio gift card!” says Flynn.