If the Apparel Computer Mart wanted instant visibility when its store opened last March, its sales staff should have dressed in chartreuse and hot pink. Little else stands out in the helter-skelter of Manhattan's garment district, a notoriously people-intensive area in the shadow of the Empire State Building. As it was, for a good month after the blue bunting was draped and the doors were opened to the world's first retail computer shop exclusively devoted to one industry, only a handful of browsers dropped by.
But thanks in part to free wine and cheese, the customer drought was reversed, to the relief of parent Yipkon Corp., a four-year-old Fairfield, N.J., computer-systems house whose studies had revealed that some two-thirds of apparel operations remained unautomated. Locating the storefront obscurely in the middle of 37th Street was a risk dictated by Yipkon's desire to bring modern methods to the needle trade, since it was apparent that the clothiers themselves wouldn't schlepp to New Jersey. "We're in business solely for garments," says the store's director, Matthew Brosious, a fast-talking marketer who estimates that there are 5,000 retailers, manufacturers, importers, and wholesalers within two blocks of the site alone. Applying proprietary software that Yipkon jointly develops with small publishers, the store's merchandise is as unswervingly vertical as an inseam. "If a guy walks in who is manufacturing baseball bats, we turn him down," Brosious insists.
On second thought, maybe he shouldn't. The apparel industry is known to harbor some of the most idiosyncratic tradespeople. Even today, merchants in the area that emanates most of the country's clothing find nothing exceptional about a $40-million family business being operated from a single sheet of paper. To Yipkon, however, such old-worldliness marked an unexploited opportunity to sell setups that could run the whole show automatically. But, Yipkon quickly found, anyone who stuffs data into his pocket, where it is as tangibly comforting as a bolt of serge, doesn't readily entrust it to the unseen entrails of a CPU.
So? Hire the dubious ragmen themselves to peddle systems; neighborhood businesses will pay more attention to salespeople who talk fluent apparel than to hotshot hackers spouting computerese. On this theory, Yipkon snatched a retail-accounts manager off the racks of its own children's-clothing store, headhunted a sales manager with 25 though years in piece goods, and hired all five floor personnel from other sectors of the trade. "It's too difficult to run a one-person business today," Apparel Computer Mart staff commiserates with buttonholed brethren. "Like it or not, you're being forced to computerize." When the customer succumbs, the proprietary turnkey systems that Apparel Computer Mart offers at $15,000 to $200,000 can be tailored to fit such particular matters as invoicing, inventory, and theft control. Yipkon is betting that the we're-in-this-together pitch will pay off: the company has its lone retail store down for $2 million of fiscal 1986's projected sales of $20 million.
More remarkably, Apparel Computer Mart insists on getting what it calls "full margin integrity," or, as local patois puts it, "These guys won't cut prices!" Even with the majority of its sales to first-time users, the outlet has been realizing 15% pretax earnings, setting a profitability pace that is well above retail-computing averages. And much of this can be attributed simply to the storefront's physical presence. "It says that we intend to stay," Brosious figures. "It makes people who've never dealt with a computer feel safer."
Now that the pilot has proved itself, this winter Yipkon -- a compound of the names of founders Peter Yip and Kumar Konanur -- is bringing a similarly concentrated retail show to the downtown banking and financial services community. The Street's starkly different climate, where first-time users are as rare as snow geese in Miami, is apt to be even more of a challenge. Still, Yipkon estimates sales for its second retail outlet at $2.5 million. Why the 25% increment over uptown's projected volume? "Getting a business owner to delegate control was the big hurdle in the garment district," Brosious says. "When we're on Wall Street, that won't be an issue."