Stores' owner maps growth in 1990s

WHITE HOUSE CHAIN HAS RETAILING CLOUT

July 02, 1991|By Cindy Harper-Evans

Baltimore's White House may lack the political clout of the one on Pennsylvania Avenue in Washington, but it's beginning to carry a lot of weight in America's retailing circles.

Rick Sarmiento, the former general manager of the Hyatt Regency at the Inner Harbor, started the all-white clothing and accessory store at Harborplace five years ago. At 278 square feet, the boutique didn't have enough space for a stock room, so salesclerks had to run across the street to Mr. Sarmiento's suite in the Hyatt to pick up extra merchandise.

Since then, the Harborplace store has expanded twice to 750 square feet, and the White House has become a regional chain with 10 stores in five states and the District of Columbia.

Developers try regularly to woo the White House into their malls around the country and Mr. Sarmiento, who gave up his hotel job two years ago, has begun a plan to expand the chain to 60 stores by 1995 and is looking for an investor to help raise $300,000.

Yesterday, the White House moved its headquarters from a country house in Arbutus to a 4,100-square-foot office and warehouse in Patapsco Business Park to deal with the pending expansion.

"There are just a lot of tremendous opportunities for us," Mr. Sarmiento, 46, said.

The White House has carved its niche as a women's store that provides everything white: clothes, jewelry, picture frames, lingerie and collectibles.

The effect tends to be a shopper-stopper in malls. Two white, marble-like columns frame the entranceway. Inside, the floors, walls and countertops are white and the salesclerks wear -- you guessed it -- all white.

"From a visual standpoint, the White House is a little jewel. It is different from any other in any other shopping center it is in," says Dawna Rosenberg, senior vice president of North Carolina-based National Retail Group, the company that helps the White House find suitable locations around the country. "We get hundreds of calls each month from developers who want White House stores in their malls."

Mr. Sarmiento says some developers have started offering monetary incentives, such as opening costs, to come into their malls because the retailer is undercapitalized. To solve that problem on his own, he is looking to raise $300,000 in the next two months from an outside investor. He says the capital infusion would not alter his control of the company.

Mr. Sarmiento says the privately held retailer had sales of roughly $3.1 million in 1990 with earnings of roughly $40,000. He anticipates sales of $6.2 million in 1991.

The White Houses that have done the best in the chain are in resort areas like Miami and Naples, Fla. -- since the weather tends to stay warm year-round and white has traditionally been thought of as a summer color.

Exceptions to that are the White House's two stores in Maryland -- Harborplace and Owings Mills -- and one in Cherry Hill, N.J. The best stores are averaging about $650 per square foot, Mr. Sarmiento says, while the chain's least productive store, in Pittsburgh, averages about $300 per square foot -- still well above the industry average.

Mr. Sarmiento, the son of a Colombian-born geophysicist and a Minnesota-born mother, plans to open six stores by early November in Boca Raton and Orlando, Fla., Charleston, S.C., Charlotte, N.C., Menlo Park, N.J. and Bethesda's Montgomery Mall.

The White House will expand west to California, Texas and Arizona in the coming years as well, Mr. Sarmiento says.

Signs of growth have already started to appear. The White House promoted Sharon Field to its first district manager position last month. Ms. Field is in charge of stores in the Baltimore-Washington region.

"We have 80 employees now and, for the first time, I walk into a store and I bump into people I don't know," Mr. Sarmiento says.

That's hard for him to deal with.

Employees describe Mr. Sarmiento, whom they call Rick, as a hands-on boss who calls stores regularly and visits at least once a month.

"He always asks, 'Do you need me to come out to the store?'" says Allison Daneker, assistant manager of the White House in Owings Mills.

But growth, Mr. Sarmiento concedes, will put a crimp on the amount of time he can spend at each store and the freedom he can give store managers to design stores as they wish.

"We will probably have to get more regimented and have more standardization with the increase of stores," he says.

There are some company policies Mr. Sarmiento instituted from the very beginning that he hopes will make growth easier. The manager of every store sends him a "Hot Report" every week with an outline of "what's selling, what's a dog and what customers say they want."

Every first-time customer gets a personalized note thanking her for her purchase and repeat customers get notices when something new has hit the store that they might like.

Mr. Sarmiento says future plans for the White House may include a men's line, a concept the owner abandoned in the store's early stages because he felt the retailer needed more focus to survive.

"We didn't think we'd make it in the beginning," Mr. Sarmiento says. "But we are on our way to becoming a nationally based specialty store."

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