LOCATION MATTERS

The location you choose could make or break your business-expansion success.
by Leah Genuario

“Location is everything,” confirms Marla Malcolm Beck, owner of Bluemercury, a fast-growing beauty chain that currently boasts close to 40 locations.
Malcolm Beck was just 29 years old when she wrote the original Bluemercury business plan in 1999. “[Back] then, you could really only purchase cosmetics at department stores and drugstores. At department stores, everything was behind glass counters, and I felt like the staff didn’t want to help me because I was young,” she says. “I decided that I wanted to offer the world’s best beauty products in a friendly neighborhood environment where you could get expert, honest advice and staff trained on all the brands.”
Malcom Beck’s first Bluemercury location opened in Georgetown, Washington, D.C., in 1999. In little more than a decade, her single location expanded to nearly 40 locations, with its most recent opening in Chicago.
As a young entrepreneur, Malcom Beck had the opportunity to meet Starbucks CEO Howard Schultz, who told her that real estate would be the biggest challenge because there are only so many corners on the best streets in the country. “My husband and I always say that retail is won block by block,” says Malcom Beck. “You have to choose exactly the right location. Always run away from sites where someone says, ‘we’ll be a destination and the customer will find us.’ You want the customer to run into you, not have to find you.”
Jim Rinehart, coastal and urban retail specialist for CBRE Group, a global commercial real estate services firm, asserts that although a particular location might be good for some retailers, it may be bad for others. “Your location has to meet your brand. If you open up in an office district, a hip and trendy location where the staff wears skinny jeans just won’t connect in that area. You need to ask yourself, ‘How can I stay in front of my best customers using location?’ You want your best customers to be reminded of you because they pass your store every day.”
Beans Beauty owner, Michael Batt, concurs: “We are a high-end store. If we don’t look at the per capita income of the neighborhoods we’re thinking of expanding in to, we are going to shoot ourselves in the foot.”
Beans Beauty opened its first location in 1980 in a beautiful historic area of Philadelphia known as Manayunk. A hairstylist by trade, Batt originally set out servicing the supply needs of salons. He opened his first store with the belief that he could gain a larger audience by opening his doors to the public as well as to the trade. Then a recession hit.
“When a recession hit in 1982, we took a closer look at where the majority of our profits were being made. Upon analysis, it was the end user, the people who use the shampoos and appliances we sold,” explains Batt. “Manufacturers were not going to be with us through thick and thin, so we decided to change the way we do business. We realized that for us to exist and be profitable, we had to focus on end users and primarily set our table for them.”
For 15 years, Beans Beauty existed as a one-store enterprise in an area that was thriving. As profitability ramped up with its new business direction, sights were focused on opening a second location in Wayne, Pennsylvania. Wayne’s demographic holds a very high per capita income; so the expansion proved to be a great success. Today, 32 years after the opening of store No. 1, four Beans Beauty locations operate in and around surrounding Philadelphia areas. Its most recent location opened in 2009 in the heart of Philadelphia and now serves as the flagship store.
“I move slowly,” says Batt. “I certainly believe in taking your time. Artistic, luxurious design is a huge part of a Beans store. It has to have heart and soul. We want our customers to know and feel the difference when they enter one of our stores. It’s never been a replica of a previous store. It’s about creating something [similar to] the way an artist creates on canvas. It’s not about [the number of] stores; it’s about the quality of the stores. Mostly, it’s about the strength of the buzz we create.”