15165 Fri, 09/05/2008 - 1:23pm
Lighting By Gregory is marking its silver anniversary with an extreme makeover.
The store, a fixture of the New York Bowery’s iconic lighting district, is mercilessly pruning its assortment as it expands its mix of luxury goods.
Now backed by private-equity firm Alpine Investors, which acquired the retailer in February, Lighting By Gregory is flush with capital to grow the business.
The growth plan includes a top-to-bottom renovation of the 7,500-square-foot showroom, an e-commerce upgrade, a return to print advertising and a beefed-up management team.
“It’s been a very exciting time,” Joel Horowitz, founder and vice chairman of Lighting By Gregory, told HFN.
“We have a new chief executive officer, chief financial officer and chief operating officer, and they [Alpine] have given us the ability to spend more money,” said Horowitz, the former owner of the store who remains the retailer’s largest single stockholder.
Often, when private-equity firms buy out a business, the prior owner “goes away, and it becomes corporate,” Horowitz said. But Alpine was “insistent that I don’t leave, that I be involved. They’re giving us a lot of wonderful, positive places to go.”
Alpine brought a level of discipline to the business that has shined a light on slow-selling items.
“What they wanted was reports,” Horowitz said. Those reports revealed the “dead wood” in the mix.
“We started to see that a certain amount of product on display and in the warehouses was not selling. We need to get rid of it,” he said. If “we haven’t sold this in three years, what is it doing here?”
The purge is also intended to bring about an airier, less cluttered showroom.
“If we can display less and show more, we think we can sell more,” Horowitz said.
“The whole [idea] is to sell higher-price-point merchandise. … We’ll be displaying a lot of $1,000 floor lamps and staying away from $100 floor lamps.”
Lighting By Gregory views its niche as a luxury lighting showroom that sells brands for less.
The retailer is the largest stocking distributor in the United States of upscale suppliers Lightolier and Casablanca ceiling fans, for example.
The plan now is to massage the high end of the mix in both traditional and contemporary product.
“We’re going more to high-end European manufacturers,” he said. “People are shying away from European suppliers—we’ll shy away from Chinese vendors. Our customer is demanding it.”
Lighting By Gregory sees an opportunity to shine as home improvement giant Home Depot, for example, posts double-digit profit declines and skews its mix toward lower-ticket goods, Horowitz said. “We’re doing the opposite.”
The store also prides itself on being one step ahead of national retailers when it comes to trends.
“Even a high-end mall in New Jersey is still a year behind Manhattan,” he said. “If you go to the Bloomingdale’s in Paramus, their [lighting mix] is a year behind [ours].”
Lighting By Gregory carries product “you won’t see in the ‘burbs,” such as a monorail lighting system that’s hot these days in restaurants and tony stores such as Armani from Tech Lighting, he said.
The showroom makeover should be complete by early 2009.
Lightingbygregory.com is another growth opportunity. Business on the Web site, which boasts about 150,000 SKUs, is up 30 percent from last year.
“We’re constantly adding new SKUs and putting more advertising on our Web stores,” Horowitz said.
The retailer also plans to resume print advertisements with placement in magazines such as Metropolitan Home, Elle Decor, Architectural Digest and New York magazine.
Although the home business has been in a free fall due to the economy, housing crisis and the credit crunch, “our showroom is off 3 percent so far this year—which to me is wonderful,” Horowitz said.
For the full year ending Dec. 31, sales are expected to be flat with 2007.
The retailer will commemorate its 25th anniversary with a 10-day sale event from Oct. 30 to Nov. 8.
While a portion of Lighting By Gregory’s growth is feeding off the high-end residences in Manhattan, as well as areas such as Long Island, New Jersey and Connecticut, there are signs that the lights could be dimming for some of the retailers on the old-school lighting strip.
Like most of Manhattan’s neighborhoods, the Bowery—famous for being the ultimate skid row, along with lighting and kitchen supply showrooms—is vulnerable to the wipe out of small businesses.
Mom-and-pop-type stores have been forced to opt out of lease renewals due to exorbitant rent increases. Throughout the city, they have been supplanted by luxury high-rises, big chain stores and upscale restaurants.
“It hasn’t happened yet, but it’s coming,” Horowitz said. “My competition is not doing as well.”
“When a major restaurant comes on my block like in the Meatpacking District, then we’ll get pushed much harder, because the restaurants can pay more rent than lighting stores can.”
But Lighting By Gregory is not at the mercy of the landlords.
“We’re not being pushed out,” Horowitz said. “We own our real estate.
“We’re here to stay,” he added.