PODELL Real Estate Advisors, LLC

EXPERIENCE

INTEGRITY

PROFESSIONALISM

Josh Podell 2005 Interview

G+G Retail's Josh Podell
By Ian Ritter


New York City-based G+G Retail is rolling out a new prototype. The company, which operates 500 mall-based Rave stores, which target teenage girls, as well 70 Rave Girl units that go after a younger audience, is looking to open 12 of them next year in March or April. The new units, executives say, will help them better attract their main customer base. Some details of the new stores have yet to be determined, but G+G executives have decided to increase their units' square footage from an average of 2,400 sf today to 2,800 sf to 3,000 sf. After being a family-owned business for decades, G+G was acquired last year by a conglomerate of private investment banks called G+G Retail Holdings Inc. Josh Podell, the retailer's VP of real estate and construction spoke with GSR about his the new concept and the chain's direction.


GSR: Why has the company decided to roll out a new prototype?

Podell: When we changed the focus of the customer and the merchandise, what we're calling "girlie" and "fun," as opposed to a little bit more flashy, which is what we were, we decided that the customer would respond better to a much nicer build out than we currently have. Right now, we don't have don't have a prototype. We have a build out. We want to develop something that is the ultimate environment for a 17-year-old, and that is our mantra.

GSR: Are you going to test the prototype in any particular regions? .

Podell: We operate in 44 states today, so it gives us the ability to open those stores in any of those states.

GSR: Is your customer similar in all of those areas?

Podell: Pretty much. There are differences in the shopper between Southern California and New York, or Texas and Chicago, but for the most part, especially since we're now going after the l7-year-olds, teenagers are teenagers. They're watching the same shows, they're on the same websites, they're looking at the same everything.

GSR: You're targeting malls for the new prototype. Why not other types of real estate?

Podell: The focus has always predominantly been the teenager, and teenagers love malls. The soccer moms, if you will, love lifestyle centers. The distinction between mall and lifestyle center is blurring, but for whatever reason, teenagers have always congregated in malls, and that's going to be our focus.

GSR: How has the company changed since the ownership shift?

Podell: The Company has changed 100%. It's an entire culture shift. We were being run as a family business, and it was a very smart family that owned the company for 80 years, but now the new culture is more representative of who we're going to cater to. It's become a more casual, fun company, and it's reflected in everything we do. If we're going to be selling fun clothing to a teenager girl, we're trying to expose ourselves to as much of what the customer is exposing themselves to as possible. The culture has really changed.

GSR: How do you stay fresh in this sector, which oftentimes has fickle customers?

Podell: It's got to be your buying strategy. You just have to be ahead of the trend. It's very important. You have the more basics businesses, like American Eagle and Aeropostale, the jeans and khakis businesses, and they're really good at what they do. But then you've got the more fashion-forward retailers like us, Wet Seal and Forever 21. We're ahead of the fashion.

GSR: Are those two chains your biggest competitors right now?

Podell: Yes, ever more so now because of the shift in business. I would have said six months ago that we were much closer to a Deb Shops than a Wet Seal. Today, our focus is much closer to a Wet Seal. Today we're going after that teenager.

GSR: What is your biggest challenge as a company?

Podell: I think whenever you change a store as dramatically as we do it, we're going from a very moderate-priced, get as many units in a store on rounders as you can, to a little higher-priced with a better selection and nicer atmosphere. As far as I'm concerned we can only improve, but our biggest challenge is convincing the customer and getting back the customer we might have lost because the stores may have been too crowded to shop in from a merchandise standpoint.

GSR: Beyond the prototypes, is the company looking at any new concepts?

Podell: Not yet. Right now we have two focuses: Change Rave and change Rave Girl. We have a lot of growth in both of them, especially Rave Girl with only 70 stores. Once we fix what we feel what might be wrong with Rave Girl and change that, we have a lot of room to grow between the two concepts. It's not necessary for us to grow by starting a new chain. We're going to fix what we have.

Last updated: May 16, 2005
G+G Retail's Josh Podell
By Ian Ritter


Like many retailers, New York City-based G+G Retail will tout a new concept at the International Council of Shopping Centers' Spring Convention in Las Vegas. The company, which operates 500 mall based Rave stores, which target teenage girls, as well 70 Rave Girl units that go after a younger audience, is looking to open 12 prototypes next year in March or April. Some details of the new stores have yet to be determined, but G+G executives have decided to increase their units' square footage from an average of 2,400 sf today to 2,800 sf to 3,000 sf. Josh Podell, the retailer's VP of real estate and construction spoke with GSR about his plans for the convention.


GSR: What is your biggest objective at the convention this year?

Podell: My No.1 objective is to explain to everyone what's happening in terms of the changes. I want them to understand that how they perceived our business and our stores over the past 30 years in changing dramatically. From a mall owner standpoint it's going to benefit them tremendously because we'll have a much nicer-looking store. A lot of mall owners want to make sure that what is built is very nice because they're putting a lot of money into their centers now. It's not the old days when you just put down a tile floor and sheetrock ceiling and that was it. The settings are much nicer today, and they're sensitive in that they want retailers to put their best foot forward with a store prototype.

GSR: In what ways are you going to push the new concept at the Spring Convention?

Podell: The fixture changes are very significant. We were a rounder operation, and the fact that we're ordering custom fixtures and folding now-we never folded anything ever--things like that are dramatic changes. The level of talent we've hired is only the best of the best. It's very different from the way we used to do business. Over the past month I've probably had 15 different portfolio reviews with the regional offices of Simon or the corporate offices of CBL, General Growth and Westfield, and they're all very optimistic.

GSR: Is it difficult to meet with all of the landlords that you want to see at the show?

Podell: It's impossible because, ideally, you want to meet with everybody, but you just can't. That's why I usually take April and May to spend some quality time in their home offices, so I can try to meet with as many people as possible. I generally leave Las Vegas for the smaller developers. I wouldn't typically go see a landlord in the Midwest that has three or four malls and have a portfolio review when I could see them in Vegas.

GSR: What kind of deals have you gotten out of the convention in the past?

Podell: I generally don't come out of the convention with any new deals. In my opinion, if you came out of the convention with 20 new deals, you should have had those deals the month before the convention because it's very rare that a space comes up and it's available a week before the convention starts. If you are always following up and making sure that you know of every opportunity, it's rare that spaces somehow avail themselves at the convention. But it does happen. There are a lot of retailers that use the time at the convention to site with landlords and say, "I want to give you this space back, or we're not going to renew this year." If you come out of the convention with some deals, all the better. But I typically haven't.

GSR: Do you spend a lot of time trying to meet landlords of centers that you're not in?

Podell: Yes, especially this year because there are a lot of landlords who were sensitive to the build out and didn't want us in a particular space or center, but now I'm convincing them slowly that we're changing enough that they're going to want us.

GSR: What is the biggest challenge for retailers at the Spring Convention?

Podell: We don't work with a lot of real estate brokers because we're only in the malls. But I would imagine if you were a retailer that did a lot of work with brokers, that would make it very difficult. You would want to meet with the actual landlords themselves, but you would also want to meet with the brokers who are representing you. It would be tough to do that. For us, it's just a matter of making sure you meet with as many people as you can. It's a challenge. We're booked every 15 minutes.

GSR: Do you have a booth?

Podell: Yes, we got the booth about four years ago when we had a strip-center program, and landlords would come to us, and we kept it because we thought it was a great marketing tool. We do our meetings there as well.

GSR: How would your business change if the convention didn't exist?

Podell: It would be more difficult. I would have to travel more. I would have to travel to see the smaller developers that I see at the convention. It's also a terrific networking place. It's where I develop so many relationships. People who you speak to over the phone 20 times and have never met, it gives you a chance to sit down and really talk to them. They become less a number and more of a person. And let's face it: This is a relationship business; it always has been.