A strategy that cuts against the grain - men's store carries large basic clothing inventory - Column

Nation's Business, June, 1992 by Joe Sugar

Business experts take just one look at my clothing store in St. Pauls, N.C., and say the number don't add up.

In an out-of-the-way, two-stoplight town of 2,000 people--and in a store and warehouse comprising just 13,000 square feet--Joe Sugar's, the store started by my grandfather in 1916, carries 227 different men's suit sizes. Our stock includes 11,000 pairs of pants, 8,000 suits and sport coats, and 5,000 shirts, not to mention everthing else a man needs, from shoes to dress hats.

Experts take one look at that inventory and throw their books at us; the way we do business--all that extra clothing--should have led us to bankcruptcy years ago.

We threw away their books; we'll have $2.4 million in sales this year.

Enterpreneurs often forget that it's OK to break the rules and confound the experts as long as you back it up with a sound strategy and an understanding of the market.

Joe Sugar's has made its reputation by being able to fit anyone--our motto is "If you have a figure, we can fit it" -ranging from the big and tall to the short and portly.

I consider the cost of carrying that inventory to be an advertising expense. Most men have trouble finding a store with a big selection, and that's particularly true for one who wears an unusual size like, say, a 52 regular portly. Even men who wear standard sizes are lucky to find a shop that carries a dozen suits that would fit them.

They'll find countless things in their size at Joe Sugar's. And that's what they tell their friends; not a day goes by when someone doesn't say how a friend told him our selection would satisfy the most hard-to-fit people anywhere.

That reputation helps us draw customers from distant markets. It's business we must have to survive because St. Pauls alone isn't big enough to support a store like ours.

We advertise in about a dozen regional papers and routinely draw customers more than an hour's drive away; if we didn't have the big inventory in all of those sizes, people wouldn't keep coming back.

Having the big selection is the hook, but it has to be backed up with service, and here again, it's OK for an entrepreneur to go beyond what an expert might say is the minimum.

In our case, we're overstaffed in alterations, with six people working on our clothes. Often, that allows us to do minor alterations while the customer waits, and it means some garments can be temporarily adjusted so a customer can get a better idea of how a suit will look after it is altered.

That kind of service is necessary to move all of that inventory.

Of course, our strategy wouldn't work for everyone. That's why the experts think this business--or almost any business run with this kind of inventory--should have gone broke in the 1960s.

We have very low overhead. There are no fancy fixtures at Joe Sugar's, only fancy clothes; our customers don't expect the snazzy dressing rooms of a big-city men's store. Owning our building also helps us keep our operating expenses to a minimum.

Keeping the operating costs down makes it possible to carry 11,000 pairs of pants, where a store paying for high-rent space in a mall couldn't afford the cost of carrying so many goods.

Sticking to old-fashioned, against-the-grain values means we won't be a trendsetter, but that can be a selling tool. Just because all the other stores are selling pleats or some new style doesn't mean that everybody wants them; a lot of people don't. We carry just enough trendy merchandise to show we are with the times, but it's the basics that make us money; we very seldom get stuck with blue or gray suits.

Everything we promote is designed to encourage customers to buy more than one garment--10 percent off one shirt, 20 percent off the second, and so on--because if we ever find we can't move the inventory, then those business experts will be right.

Our business boisl down to offering value, service, and price, but in a unique way.

Simply because a lot of executives believe in the latest pop management theories doesn't mean I have to; there is still room in business today for people who work hard, understand their market, and do things the old-fashioned way.

It's not that the business experts are wrong; it's jsut that they don't know my business as well as I do.

Joe Sugar is president of Joe Sugar's of St. Pauls, Inc., in St. Pauls, N.C. This report was prepared with Contributing Editor Charles A. Jaffe.

Readers with special insights on meeting the challenges of starting and running a business are invited to contribute to Enterpreneur's Notebook. Write to: Editor, Nation's Business, 1615 H Street, N.W., Washington, D.C. 20062-2000.