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INDESTRUCTIBLE DENIM

Mercer keeps an old product hot, supplying upscale shoppers with jeans and more

By Molly Knight

Denim is proving, once again, that not everything has to be new to fly off the racks. And helping to prove the case is the equally hot retailer Mercer & Co., sources say.

Jeans are more sought-after than ever, and this can be attributed, in part, to denim’s new role as a key piece of every fashionista’s wardrobe, says C. Bradley Mendelson, executive director of the retail services group of Cushman Wakefield, a New York City-based retail consulting firm.

“Wearing jeans no longer necessarily means dressing down,” said Mendelson. “These jeans are low-rise and very sexy. Women wear them with very expensive tops out to restaurants that aren’t casual. And with these jeans, the labels are obvious. Everyone knows what jeans you’re wearing by looking at the back pocket. It’s a status thing.”

Spotlights on six mannequins in Mercer’s front windows illuminate the impossibly low-cut jeans that hug their rail-thin hips. Cool concrete floors support tables offering bejeweled Juicy Couture tank tops and soft vintage Disney T-shirts.

Glass cases display soy candles, chunky bracelets, beaded belts, coin purses and oversize designer sunglasses against an exposed brick wall that has been painted white. The first album from Scottish rock band Franz Ferdinand blares through the speakers. Two salesgirls scour the mammoth wall of jeans on the right. A teen-age girl waits for them to find the pair of faded True Religion jeans she is requesting in her size: 27. The cost: $172. Her mother isn’t flinching, though. The store, the chain’s third and most recent, is in the Simon Property Group-owned Shops at Mission Viejo (Calif.). A few months ago it was flooded with high school girls enjoying their last few hours of winter break, and their slender mothers, relishing the idea of fitting into the same kinds of jeans their daughters gush about.

“Mercer is a fabulous addition to our shopping center,” said Patsy Sanquist, area director of marketing at the Shops at Mission Viejo, where Mercer opened this, its third store, last September. “They’ve got great merchandise, and they’ve really filled a niche. A lot of our shoppers of all ages have great figures. Our customers are buzzing about it.”

That buzz, says Sanquist, is due in large part to Mercer’s setup as a designer jeans shop that is highly organized, well stocked and easily navigable. In addition to True Religion, Mercer offers top brands Citizens for Humanity and Seven for all Mankind.

“They specialize in boutique-type offerings,” said Sanquist. “They’ve got high-end designer brand names you can get at Nordstrom, but Mercer is great because it’s smaller than a department store and not as overwhelming to the customer.”

And finding the right jeans can be overwhelming, says Sanquist. “I went into the store to get myself a pair of jeans, and for me, finding the right pair of jeans is almost as bad as finding a bathing suit. When I walked in the salesgirl handed me 12 different types of jeans, and I found the pair for me on the third try.”

It is women like Sanquist that founder and CEO Scott Bonomo had in mind when he and his wife, Karen, launched Mercer and opened its first store three years ago at Pine Lake Village, a shopping center in Sammamish, Wash.

Scott Bonomo, the son of a Sicilian master tailor, grew up working in his parents’ clothing boutique in the states.

After earning a bachelor’s in marketing from Oregon State University, he went to work for Nordstrom, where he stayed 15 years and was responsible for launching such brands as Evergreen Sportswear and Halogen. There he met Karen, who was a buyer and played an integral part in the company’s expansion to the East Coast.

The couple married and Karen left the workforce to raise their two daughters. But as soon as the younger girl turned 12, Karen was ready to get back into the world of retailing. “She had a brilliant concept of a contemporary jeans and T-shirts store that would be convenient for women balancing careers and families,” Scott Bonomo said. “Our concept was to consolidate all the hottest jean brands into a boutique. We want to simplify the shopping process.”

With this in mind, Scott Bonomo says he and his wife put that first Mercer store two doors down from a Quality Food Center supermarket in an upscale, suburban, downtown Seattle area. “We wanted to provide a store with all the best brands in a convenient location, because we want women to be able to save time,” he said. “It’s only 1,400 square feet, but it fits all our key brands. It’s worked out really well.”

In May of 2004 Mercer opened its second store in University Village, an open-air center in Seattle. With the three stores generating annual sales of $1,000 per square foot in total, the company has reached its target sales goal of $5 million in just its third year of operation.

Now the Bonomos are looking to expand. Last year they secured $1.5 million in financing from Sloan Capital Cos. (Stuart Sloan, president and CEO of Sloan Capital, is a director at Anixter International, J. Crew and Rite Aid Corp.) Scott Bonomo says Mercer will use this money to open about five new stores in select West Coast locations by 2007. The first of these is slated to open in September at the Simon-owned Stanford Shopping Center, in Palo Alto, Calif.

Mercer has received high praise from retailing luminary Millard (Micky) Drexler, now president and CEO of J. Crew, and the man who engineered Gap Inc.’s massive growth. Mercer is just the kind of tenant J. Crew likes to be next to, Drexler says.

“We both share similar customers — women who love fashion and style — always new fashion along with high quality classics,” Drexler wrote in an e-mailed response to SCT. “Mercer allows the shopper to create their own sense of style — from denim and T-shirts to designer collections. [They have] a ‘point of difference’ environment relative to department stores and small boutiques, with a well edited ‘on target’ assortment … a very hip assortment of fashion brands, with a very strong assortment of jeans.”

Even though Mercer was initially imagined as a boutique that would serve primarily affluent women on the go, Scott Bonomo says the company’s target demographic has expanded. “We have three customers,” he said. “Our first customer is who we focus most of our attention on. She’s 25 to 40 years old. She’s a mother, and she probably has a career as well. She definitely doesn’t have time to do the traditional department store shopping, and she wants to look cute. We condense it down for her. This shopper is loyal. We have the strongest bond with her.

“Our second customer is a fashionista. She’s somewhere between 20 and 32 years old, and she doesn’t have a family yet. She’s just beginning her career. What’s important to keep in mind is that she’s loyal to fashion, but not to the store.

“Our third customer, who shouldn’t be overlooked, is our younger customer. She’s in junior high and high school and places an importance on the jeans we carry.”

Retail consultant Mendelson agrees that the “fashionista” customer is loyal only to the jeans that make her look good, and he says a well-stocked inventory is the key to keeping her as a shopper. “The main thing these stores can do to be successful is carry as many styles and sizes as possible,” said Mendelson. “Women aren’t loyal to particular stores, because so many carry these jeans.”

Scott Bonomo says that unlike large department stores, where customers might have to canvass five levels to try on 20 pairs of jeans to find one style that fits, Mercer lays all its offerings right on the table. “We feel like even when we’re going against marquee places like Nordstrom and Saks Fifth Avenue, we stack up competitively,” he said.

In addition to his emphasis on staying fully stocked, Scott Bonomo says his attention is always fixed on knowing who his customer is and directly addressing her needs. “The main thing I learned from my time at Nordstrom was the importance of real customer service,” he said. “The service side is absolutely the number one thing you have to attend to. Our employees are fit experts. We pride ourselves on staffing stores with fun, likable, warm, friendly people. I want people to walk into Mercer and feel like it’s their store. I want customers to know our staff members by name. But I also want it to run like a very professional organization. It’s important to have a personal touch with a business mentality.”

Sanquist says the employees at the Mission Viejo store are doing a fantastic job adhering to the Bonomo vision. “The staff is just so knowledgeable,” Sanquist said, “and they give customers one-on-one attention, which is so important.”

Just as important as selecting a Mercer employee is choosing locations for Mercer stores, says Scott Bonomo. “We look at the contemporary offerings of each potential shopping center,” he said. “Fashion Island in Newport Beach is an amazing location, but it already has loads of contemporary offerings. We want to be relevant, but we also want to have a reason to be there. We want to fill a niche. We want to find great environments not necessarily presenting these contemporary offerings. Right now we have our sights set on the West Coast, but over time we’d like to move east.”

In the meantime, Mercer will continue editing its focus to serve hip, svelte mothers and their fashion-minded teen daughters. And if the Bonomos ever lack inspiration, they need look no farther than the dinner table. “My oldest daughter is 15 going on 25,” said Scott Bonomo. “I know fashionistas.”