Boutique fills bling niche in bleak market

Struggling small-business owners are many in these economically punishing times. Then, there is Sherri Guggenheim.

She launched a retail venture with the signing of a store lease in December 2007 - the very month the Great Recession debuted. That crisis was still in full bloom when Guggenheim opened for business in August 2008.

But save your pity.

Guggenheim needed none of what has been hard to come by for most folks in business since the economic meltdown, namely bank loans. Start-up capital was readily available from her husband, David, a foot and ankle surgeon.

And her target market?

Those women who not only swoon over $325 Kate Spade platform peep-toe slingbacks, but can shell out the green for them - even in times of such high unemployment.

So reliable is that segment of the buying public that Guggenheim's ViVi G. Shoes in Glen Mills, a high-end boutique featuring footwear, handbags, and other accessories, is now a three-store chain with a presence in two other notably affluent towns: Wayne and Palm Beach, Fla.

That's right. Guggenheim, who lives in Chadds Ford, not only has launched a retail business since the recession's ruinous start, but has expanded it - twice.

The former South Jersey elementary-school teacher (before she got married and stayed home to raise two children) took advantage of a devastated commercial real estate market to negotiate favorable leases and build-out provisions.

And due, in part, to the failure of other retailers, Guggenheim gained access to product lines that otherwise might have been out of reach to the unknown player she was when she decided to turn a passion for shopping into an entrepreneurial endeavor of "affordable luxury."

"I'm not Prada," the Cherry Hill native said from a couch inside her flagship store at Glen Eagle Square on Wilmington-West Chester Pike. "I saw that the luxury market was getting too high."

Gucci flip-flops were costing $400, for example. "I wanted to be the go-to store where everyone could buy something," Guggenheim said.

Well, "everyone" of a certain income level, perhaps. Just-arrived Ted Rossi leather "hobo-style" bags, glitzed up with semiprecious stones exclusively for ViVi G., sell for $795. Each.

"How can you not love this bag?" Guggenheim asked, hugging one in turquoise.

Barbara Kahn, director of the Jay H. Baker Retailing Center at the University of Pennsylvania's Wharton School and a professor of marketing, is not surprised ViVi G. Shoes is profitable.

"Any marketer or retailer that has a niche strategy and meets the needs of that niche segment is always more successful," Kahn said.

And the affluent are a sound niche market, even in a recession, she said. "In times of recession, people who had money still had money. Psychologically, they were scared . . . their portfolio wasn't worth as much as it was, but their day-to-day spending didn't change."

Still, the recession did make the more well-off less inclined to engage in "conspicuous consumption" - as in buying things "they never wore," Kahn said.

Mindful of that, Guggenheim pitched Kate Spade slingbacks to customer Nancy Braun of Chadds Ford by emphasizing that the shoe - a blend of bone, silver, and gold tones - could be worn with a dressy dress or "white skinny jeans."

Braun tried them on and had Guggenheim set them aside while she continued to deliberate on the wisdom of the purchase.

"I think we all have to be a little more mindful of our spending," said Braun, who then mentioned the devastation people in Japan are enduring. "It makes you say: 'Do I really need a pair of shoes?' "

As a nod to the more-deliberative shopper spawned by the recession, Guggenheim has instituted a layaway option. Just don't expect to hear that word in her stores.

"Layaway was from the 1940s - and it sounds cheap," she said. Her version of retail mercy, which Guggenheim calls "Fashionista Financing," requires customers to make a 50 percent deposit and pay the rest within 30 days. Only purchases of $200 or more are eligible.

As for discounts? No way.

In retail, "it's all about the margins," she said. "If you cannot maintain your margin, you might as well not be in business." She tries to keep a 45 percent profit margin.

To help customers achieve the unique look Guggenheim is in business to provide, she will not stock more than one pair in each shoe size and one of each style of purse, or earring, or bracelet.

"In a boutique, you want something special you can't find in the mall," she said.

Joined in business by her daughter, Jennifer, Guggenheim is a regular, albeit rotating, presence in all three stores, driven by the belief that "if you want a successful business, you have to be there. There's no one that knows the inventory like the owner."

Also key is engaging a marketer early on, well before you actually open for business, she said. Guggenheim called on Mindie Barnett, of MB & Associates Public Relations, of Voorhees, who got Guggenheim appearances on fashion segments of local TV shows and in a variety of print publications.

What did Barnett advise the woman opening a store peddling nonessentials in a recession?

"We pushed the fact that shoes and accessories can be worn in multiple seasons and with a variety of different outfits, so it was an investment worth making if one was going to just buy one great item for the season," Barnett said.

Guggenheim said she also works off one other basic principle: "Women like bling."