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Discount Store News, Sept 17, 1990 by Jill Lettisch

Gitano Makes All the Right Moves

Haim Dabah, president and chief operating officer of Gitano Group Inc., is appreciative but realistic about winning the 1990 SPARC Vendor of the Year Award.

"I think the most important thing that helped us get this award is that our product sells to the consumers. Everything being equal, consumers have proved they prefer our product," he said.

In some cases they have proven it to the tune of $500 per square foot for some Gitano concept shops.

"Obviously not all our shops do that amount, but it's great that we were able to reach that number," he said.

With a diverse line from jeans to bathing suits, plus a recently added men's underwear collection and a strong belief in effective retailer/vendor partnerships, retailers seem to prefer Gitano products as much as consumers do.

Gitano is no stranger to the SPARC award. It has captured first place in women's wear for the last four years and also won third place in the children's wear category in 1984. This is the first time it has won vendor of the year.

Three changes the company has made in the last year reflect the flexibility and willingness of Gitano to meet market needs and to adjust to the sometimes volatile and unpredictable apparel market.

First, though it has always had the right perspective on fashion, it changed its marketing approach from a sexy, junior image to a kinder and gentler family-oriented advertising and promotional campaign. It is a testament to Gitano's effectiveness that its original image was buried quickly and its new image took hold instantly.

Earlier this year, the company also instituted a Quality Guarantee hangtag program, where a dissatisfied customer can return any Gitano merchandise he is unhappy with directly to the manufacturer.

The most significant development, however, has been the innovative shop concept it introduced first at Caldor in early 1989. Today, there are 140 shops in 11 mass merchants, including Wal-Mart and Jamesway. A total of 160 are expected by year-end.

"With the shops, we've really broken ground in merchandising and display techniques. Retailers appreciate our pioneering methods," he said. "Merchandising presentation is really the next important issue mass merchandisers have to deal with. Discounters already have the prices, the brands and the assortments."

According to Dabah, an honest partnership between retailer and vendor is a vital aspect of surviving in the `90s marketplace. Gitano is helping to accomplish the goal of partnership through its various retail task forces.

"When you get people talking, you realize how each works and what is needed at either end of the system," he said. At the moment Gitano has three task forces in operation with various mass merchants. The groups include representatives from various departments-traffic, MIS, for instance-from both companies. The point of the task force is to eliminate the duplication of certain jobs.

Dabah attributes part of the task forces' success to not living by the old rules. "We don't have preconceived notions about retailers. We deal differently with each one so that we can service them best," Dabah noted. "There is a lot of talk about partnership but only those that are willing to be honest and participate will survive."

Gitano, then called the Orit Corp., was founded in 1971 by Morris Dabah. Haim Dabah joined his father's company in 1973. With the introduction of the Gitano brand four years later, the firm established itself as a innovator in merchandising and distribution.

Today, its list of properties and brands include EJ Gitano children's wear, P.S. Gitano plus sizes, the Gloria Vanderbilt brand name, and the Gitano label on jeanswear, sportwear, swimwear and intimate apparel for men's, juniors, missy, plus and materinity sizes.

In addition, the company owns 70 retail locations selling exclusive Gitano merchandise. In 1989 it also purchased The Children's Place, a 155-unit children's wear operation.

Throughout its growth, Gitano has remained a conscientious company and has worked on many charitable community projects. It supports the Muscular Dystrophy Association, among other charities. This year, it also embarked on a program to increase environmental awareness.

Its most recent endeavor is an effort with Family Circle Magazine to honor "American Families Making a Difference." Families are invited to describe what they have done to improve the environment. Winners will be selected in each of the 50 states with three national winners.

"The next thing we need to tackle is education," Dabah said. The company became one of the first corporate sponsors of the TeachAmerica program, where young college graduates are brought in to inner-city or rural schools, where teachers are needed most. "You have to find the right social focus and be willing to do something about it," Dabah said.

The company so far has mixed the right amount of social focus with good business focus. In 1989, it reported $625 million in sales and a net income of $30 million. Can there possibly be more markets to tackle?