Successful Retailing: Positioning Your Shop for Success

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1 Jay Goltz Successful Retailing: Positioning Your Shop for Success Part 2: Selling and Showing Art Lonnie Lemco Conni Henshaw MODERATOR Jay Goltz, President and founder, Goltz Group, Inc. PANELISTS This is the second article in a series transcribed from the National Conference Annual Business Breakfast Panel at the 2013 West Coast Art & Frame Expo in Las Vegas. 38 PFM September 2013 Robyn Pocker Derek Vandeberg Lonnie Lemco, co-owner, World Art Group Robyn Pocker, president, J. Pocker, New York Conni Henshaw, vice president, EnCore Products Derek Vandeberg, owner, Frame of Reference, Bigfork, MT Jay: Derek, I went out to your shop in Montana, and we did lots of articles called the Montana Project that looked at your merchandising and how you were buying. What s changed in your frame business in 12 years since that time? Derek: The big one would be that in 2007 Christine and I got divorced. You know, we re great friends, we re great business partners; we just weren t very good married people. Jay: And you re working together now? Derek: Yes, we re actually working together better now. Jay: So what s going on in your art business? Derek: Honestly, the art business is something that I would like to get out of. When we started in 98, we wanted to own a frame shop. We were small 900 square feet. That was production, bathroom, office, everything. What we realized is that the town that we were in Bigfork is in northwestern Montana is a town that I would equate to Jackson, WY. There are a lot of second homes. It s on a beautiful, large freshwater lake. We have a lot of clients who are either fabulously wealthy or famous. We also have a lot of people who want a frame for $20. We were just going to be framing and had big, empty walls when we opened. Because it s a bit of an art town, we had artists showing up literally twice a week with portfolios and so we became a gallery. We still show Montana artists exclusively. It s all original work. I would consider it to be Western contemporary in style. The recession was a little hard. Pre-recession, our best price range was $3,000 to $15,000. Now our best price range is probably $700 to $4,500. We re selling more art. We are selling obviously less expensive art. It s the segment of the business that has continued to grow where framing has stayed relatively constant. But it s not my love. I m a picture framer, and I sort of had an epiphany about that a few months ago. I m a good picture framer. It s something that I know. It s something that I m good at. I thought about getting out of the industry completely. Christine, my partner, is a painter who would like to move away, and the gallery is really her thing. So, as we divest pieces of the business, what I want to do now is to just go back to being a picture framer, move off the main drag so my commercial building wouldn t have to be open 12 hours a day, 7 days a week during the tourist season and maybe have a little more life. Jay: So you weren t buying the art? It was on consignment, I assume? Derek: Ninety-five percent of it was consignment. Two of the artists we represent do limited edition giclees; it s good quality, you know, $400 to $800 these were the higher end artists. About half of those prints were on consignment. The difference is that we seldom take in framed artwork. We specify that with all of our artists early

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3 on, because we re a frame shop I don t want to show somebody else s readymade frames or some other framer s work. So at any given point, we have $15,000 of framing on the wall and other people s art. Jay: So, even though you re bringing the money in selling the art, between the higher expense of the rent that you need to sell art and have a gallery and the time needed for dealing with the artists, you determined that you d be better off just doing framing in a lower overhead situation to make your life easier? Derek: I personally will be better off simply because I m not good at the art side. I do it as a bit of a distraction from designing and building picture frames. In the summer sometimes we get 100 people a day who walk in the door and look around because they re going in every door that opens. It drives me crazy because it s our busiest season and we ve got work to produce and we ve got people at the design counter. Jay: Do you think part of that s because of the price points? What if the price points wouldn t have come down? Derek: Well, if the price points wouldn t have come down, I d be making a lot more money and I d hire more people and I d work less. So that would certainly help. Jay: So it s partially about money, it s partially about the market, and it s partially about the overhead situation. That s the problem with art. There is a huge business model problem with the frame shop/gallery model, because galleries need high rent and good locations where there s a ton of people walking by. It s branded and people feel good about buying their art in this nice store. Yet framing cannot be paying the 40 PFM September 2013

4 top rent in a top location. There are certain locations in the country where those two things work okay together because they have smaller stores and lots of tourist traffic, but in a lot of situations the real estate needs are very different. Most frame shops cannot afford to be paying $40 or $50 a square foot for space per year, and it s very hard to sell art when you re paying $12 a square foot because you re probably not in the right neighborhood. So that s a problem. But from my perspective, most frame shops should be selling some art, if for no other reason than to show examples. My store does a lot of framing business. I ve got probably 40 pictures hanging on the wall. It s considerably less than 1 percent of my business, but I want to showcase framing. I want to show customers good framing. My philosophy is to buy some prints, frame them beautifully with drop dead designs, and then sell it at half off every four months. Just move the stuff along and then put up some new samples. Every year I ask how one of my classes how many corner samples they have. Yesterday, one woman said 6,500. I don t care how you display those 6,500 corner samples; you re going to cover every wall, every ceiling, probably the building exterior, and even your car interior. I think at some point you need to show some framed artwork. My argument has always been that once you have 1,200 corners or so, you re probably putting up a lot of duplicates and you certainly aren t using most of the corner samples. You re not using 5 percent of your corner samples. You need to leave room in your store to show art. If you ve got a dozen beautifully framed pictures, then that sets a tone for your store. We re still competing with the big box stores, and they re not going to do that. It s one more point of differentiation. In a custom frame shop, customers want to see some beautifully framed art. PFM September

5 It doesn t take a huge investment to buy a dozen or two dozen prints. What do you recommend, Lonnie, how much money are we talking about per print? Lonnie: Maybe an average of $20 or $25. Jay: So for $20, you re going to frame something that doesn t look like a cheap offset litho and is going to look like something substantial. What are you going to get for that money? Lonnie: You re going to get either an open edition or limited edition giclee or an embellished piece that doesn t require glass or matboard and that s textured. It will be an upscale, trend-forward type of product that hopefully will attract new customers including designers and open up new channels of business. Jay: Robyn, have you found a price point you try not to go over when you re buying prints? Robyn: For retail, generally $3,000. Jay: Is that framed? Or just the art? Robyn: The art. Jay: Derek, let s say you get out of the art business. Are you going to hang any framed artwork in your store? Derek: I would certainly do prints. You need them to show framing. For what I have a vision of, the art is really secondary. Manufacturer and Supplier of Quality Woodworking machines for the picture framing and Furniture Industries. As the Premier Miter saw, Under pinner, and v-nail manufacturer to picture framers around the world, INMES-USA should be your long term partner for Frame Joining, Cutting, Fitting, Dust collection, and Field Service. We provide excellent support and service to all our customers including set up and training. INMES-USA provides a full range of quality products and services and our durability is proven by the many machines still in daily operation after 10 to 20 years of use. Our network of authorized distributors are among the finest in the picture framing industry and provide personal, immediate service, and product availability which we know is essential to be successful in todays business climate. Contact INMES-USA directly or ask for a distributor near you INMES-USA, Inc. 575 Prospect St. #251D, Lakewood, NJ info@inmesusa.com 42 PFM September 2013

6 The problem with print inventory, as Robyn said, is that you have to cull stuff. What I would look at is scaled to size. Lonnie, you can scale prints, right? Lonnie: We can print any image in any size. Derek: So, what I would look at is building some nice frame packages that you could put a variety of pieces in, change the artwork out. What I find really interesting in the gallery is that I can move the framed art and the gallery around, changing things out. Invariably, someone who comes in all the time will say that s gorgeous, I ve never seen that before even though it s been there a year and a half. With some clever marketing, and a showroom with 40 pieces, you can use maybe 10 different pieces at a time and change the art out. For $25 a print, that would be very affordable. And then you could change the matting package do a little mix and match to keep things fresh. Jay: Because of where you re at, I assume you re not doing work for any institutions, such as hospitals or offices? Derek: Seldom. That business is out there but I have not had time to pursue it. No one does it in my market. You absolutely need a source for artwork because of what we found in working with designers. I have four designers we do regular work with, and they want is a presentation. For the most part, they don t care much what the artwork is. So an open edition print is perfect because you can put a $25 print in $1,000 frame and have a gorgeous $1,000 piece as opposed to framing an $8,000 painting. Particularly in a corporate environment, nobody cares about the prestige of the art, so prints are invaluable for that. The Show Everyone Is Talking About All the classes were very informative and I found great ideas on easier ways to mount objects. The WCAF Expo also allowed me to discover new ideas from all the different vendors. I think frame shop and gallery owners should attend this show every year in order to stay on top of what s new in the framing industry. Diane Dodge Owner Diane's Frame Shoppe The West Coast Art & Frame Expo Trade Show: January 20-22, 2014 Conference: January 19-22, 2014 Paris Las Vegas Hotel & Casino PFM September