Marvin A. Blumenfeld's favorite species of business partner is a failed small retailer. Blumenfeld is president of April-Marcus Inc. of New York, which acts as merchandise buyer, management consultant, financier, and mother hen for more than 200 independently owned retail clothing stores around the country. Many of the store owners had previously gone out of business trying to run retail operations on their own, and most of their current operations were founded or reorganized with Blumenfeld's help.
In 1969, Blumenfeld was a failing menswear retailer himself. April-Marcus was then primarily a merchandise liquidator, and its chairman, Mortimer H. April, had come to help sell off the stock of Blumenfeld's clothing store in the Catskills area of New York State. April liked Blumenfeld and hired him as his assistant; Blumenfeld became president in 1974.
Under Blumenfeld's leadership, the company has found a different calling. Many of the retailers it was helping liquidate had what he considers the two qualities needed to succeed, "sound merchandising instinct and the ability to keep overhead under control." They failed for reasons not necessarily of their own making -- such as sluggish markets or poor locations. With the proper help, Blumenfeld decided, these retailers could make it.
So he started helping. For 10% of gross sales, Blumenfeld will do just about everything for a store except stand out on the floor hawking the goods. He specializes in setting up discount stores that sell top-quality suits bought cheaply as overstock -- a niche he sees as the wave of the future in menswear.
April-Marcus orders all the merchandise, using its clout as one of the country's biggest purchasers of menswear to obtain the best prices. It gives the store owner advice on locations, advertising, accounting, and legal matters, drawing on a 120-person collection of talent at its headquarters in the Empire State Building.
For example, one of Blumenfeld's clients, George Walter, used to operate leased departments in discount stores selling toys, stationery, and health aids in Poughkeepsie, N.Y., and Philadelphia. In 1978, after that business went bankrupt, Walter talked a bank into giving him a loan guaranteed by friends and moved to San Francisco where, Blumenfeld had told him, the discount menswear business would take off. Now, as president of Clothing Clearance Centers, Walter owns seven stores with combined revenue of about $10 million a year. He says he is netting 8% to 10% after taxes -- and after paying April-Marcus 10% of gross sales. "None of the new businesses we've assisted has ever failed," says Blumenfeld.