Keeping Close to the Customer, the Mitchells Story

Mitchells Stores, from its humble beginnings in 1958 when Ed and Norma Mitchell founded the Ed Mitchells store in an 800-square-foot former plumbing supply shop, has grown to 10 stores generating sales exceeding $250 million annually.

The specialty retailer, based in Westport, Conn., has succeeded by offering many of the most luxurious European and American designer brands, expanding its assortment originally from only menswear to women’s fashions and jewelry, acquiring other specialty stores, and through its signature strategy — staying close to customers, knowing when and what they want, and providing high-touch, personalized service. Arguably, Mitchells Stores has evolved into the most successful independent multibrand retailer in the U.S.

“It really all started with what our grandparents put in our brains. First and foremost — be close to the customer,” said Bob Mitchell, co-chief executive officer.

“Practically every family member is on the selling floor Saturdays, whether you’re in finance, marketing or you are one of the two CEOs, which is myself and my brother, Russell.”

They’re all on the floor, connecting with customers, into the selling process, explained Mitchell. The Mitchell’s website indicates that six grandchildren of the founders are in leadership positions at the company.

The retailer in the 1990s began acquiring specialty stores around the country over the years, starting with Richards in Greenwich, Conn.; then the former Marshs on Long Island; Mario’s in Portland, Ore., and Seattle; Wilkes Bashford in San Francisco and Palo Alto, Calif., and, most recently, the Dallas-based Stanley Korshak.

“As we added more stores, we changed our mission statement,” Mitchell said in a conversation with WWD senior editor Jean E. Palmieri. “We used to talk about clothes and jewelry. Now our mission is to make people feel great. People are coming into stores for experiences. Great people make great experiences. We have amazing sales associates and an amazing buying team. And the number I’m most proud of is that the average tenure of our people is 14 years.”

For every person who is new to the company, there’s someone with two, three or four decades with the retailer, Mitchell said. “We have three people who have been with us 50 years. If you’re in the relationship business, you can’t turn over people.…When someone in the business comes to you with a challenge, do you think of people first? Of course. Product and visual and everything else is important, but at the end of the day, [those] that make the growth happen are the great people on the front line. That’s really been the key to our success.”

Bob’s father, Jack, has famously written a couple of books themed around “hugging the customer” and focused on personalizing service and doing something extra for shoppers. “We’re trying to continue to build on my dad’s great message,” Bob said. “It’s great to hear from data that people want to shop in stores. I just find you have to give them really an exciting, dynamic environment to do it.”

When Bob, his brother Russ and his mother joined the business in 1991, Mitchells was selling cheap suits and shirts. “As we traded up, as the community traded up, we had more and more success,” Mitchell said. “Today, our whole focus is on luxury — not that we don’t carry a wide range of product, but, you know, our business is booming. We had a record year. The macro economy is good in the U.S., I know it’s faltering in other places, but if you look at a lot of the great brands and our biggest brands, they’re also booming in the U.S. right now. So we’re very bullish.”

A little-known fact is that Mitchells has been in the women’s business since 1965. “When Russell, myself and my mom joined the business, we were about 85 percent men’s and 15 percent women’s. And most people still don’t believe it, but today we do more women’s business than we do men’s business. Jewelry has really helped us, but our big growth has been in women’s. Today in Westport, about two-thirds of our business is women’s, between women’s and jewelry. For people in the menswear business, I always say, ‘Whatever happened in the women’s business happens in the men’s business.’ Eventually we learn, right?”

Women shopping Mitchells Stores are just as loyal as men, Mitchell said. “If you give them a great sales associate, great selection and free tailoring, we can capture about 80 percent of their purchases,” with the remaining 20 percent going to other stores.

“People really do want to come to one store. If you ask 100 rich people, would they rather go to a store where they can do all their shopping with a professional sales associate and get free tailoring, or would they rather have to go from store to store to store, 100 out of 100 people will tell you they’d rather shop in a multibrand store, and you need to have the selection. That’s why we believe in big stores, about 25,000 square feet, 30,000 square feet, where we can have a great selection. So you don’t compromise selection. We’re passionate about the multibrand model.”

For expanding to new locations, Mitchells pursues acquisitions of other specialty stores, rather than rolling out more Mitchells stores. “It’s just a very cost-effective, low-risk strategy to buy an existing business,” Mitchell said.

Additionally, when the Mitchells buys another specialty store business, they’re also capturing new retail associates, and typically retaining an owner with a strong relationship to the community, such as Crawford Brock, who was the longtime owner of Stanley Korshak.

“When we bought Richards, they had the most amazing team of people. They also helped us to elevate our product mix because they were selling more expensive product,” Mitchell recalled.

Regarding opportunities for future specialty store acquisitions, Mitchell said, “There’s not lots of them out there, but we think there’s more.”

Mitchells Stores, he added, has a track record of proving that acquisitions, at least for it, is a successful path for expansion and it’s self-funded. “Yes, we will look in Florida. We’ll look at other stores. But I want to take a very measured approach,” Mitchell said. “If you’re not taking outside money and you’re not taking bank debt, you’ve got to do it in a way that’s gradual. We’d rather grow slowly. We’re a debt-free company. We have been for a long time. We self-fund everything we do. So we’d rather grow at a slower rate, and do it in a meaningful way so that we’re financially strong.”

The opening of a Wilkes Bashford store in Palo Alto last year was Mitchells largest cap-ex investment. “We’ve doubled that business in the first year,” Mitchell said. “It’s been a good investment, but we don’t want to lose sight of that. We want to keep that rolling.” Stanley Korshak in Dallas was Mitchells single biggest acquisition.

Unlike other retailers selling luxury, Mitchells won’t move to the concession model. “Philosophically, we’re retailers. We were born retailers,” Mitchell said. “We’re picking the pins out of the carpet on Sundays as we vacuum. If you go to the concession model, you’re letting them pick the merchandise. You’re letting them hire the sales associates. You become a landlord, and beyond that, I don’t think the financial model works for us with our high cost base.

“But first and foremost, we’ve got to be able to prove to our brand partners that we’re the best people to be the last standing wholesale business in the U.S. We’re trying to make our vendors feel great. So for all you in the room who are key partners, thank you. You’re so important to us, and we try to demonstrate it to them by being in the stores and seeing what we can create. We had record trunk shows this weekend with [Brunello] Cucinelli and Zegna. And when those people are in the store and they see what’s going on, and the level of service and the level of personalization that’s happening, it reinforces in their mind that we’re great partners.

“More importantly, we think about technology,” Mitchell said. The luxury customer, he said, doesn’t live in any one market 12 months of the year, raising some challenges for the business to stay connected.

“My brother Russell really has been the driving force for using technology to stay connected with our clients.” Russell is more the behind-the-scenes executive handling finance, technology, e-commerce and other areas, while Bob handles “everything that touches the customer.”

E-commerce represents about 9 percent of Mitchells’ total volume and is the best vehicle for acquiring new customers. “It’s an important part of our business,” Mitchell said. “But we think stores first, and the website is our front door to draw people into our stores.”