LOS ANGELES – Curacao, the Southwestern department store chain, is embarking on its next phase of development.
The 31-year-old business was built from the ground up by serving a largely underserved consumer segment: the Hispanic market.
Now the 11-store chain is refreshing its image to appeal to second- and third-generation customers, and is broadening its demographic focus without losing sight of its Latino base.
To do so, the privately held company is remodeling its older stores, expanding its CE and majap assortments, has updated its brand by dropping the “La” from its name and creating a new logo (a stylized bird of paradise), and is looking to more than double its store count within the next five years.
That’s quite a change from Curacao’s considerably more humble roots. Co-founder and chief merchandising officer Jerry Azarkman was a 24-year-old immigrant from Israel by way of Iran, who arrived in Los Angeles Curacao Taking It To The Next Level in 1980 with $20 in his pocket and started out by selling video games door-to-door to Latino immigrants. A year later he was joined by his brother Ron, now CEO, and together they created La Curacao, a variation of Corazon, which is Spanish for “heart.”
Today the full-line department store sells furniture, appliances, toys, cosmetics, baby products and women’s fashion accessories, and is anchored by consumer electronics, its largest category. CE sales were $192 million last year, placing it at No. 46 on the TWICE Top 100 CE Retailers Report, while the company ranked 56th on TWICE’s Top 100 majap listings with $23 million in white-goods revenue.
Curacao is also fueled by its in-house finance division, which has issued some 2 million private-label cards, plus a host of ancillary businesses serving the Hispanic community, including travel, music downloads, financial services, phone and Internet access, and an export operation that ships customers’ purchases to friends and family in Latin America.
Retail services president Rick Hutton said the groundwork for Curacao’s repositioning began three years ago with a top-to-bottom review of the business from the perspective of the customer. “We said, ‘Let’s be a great retailer that serves the Hispanic market vs. an Hispanic retailer,’ ” he told TWICE.
Specifically, the company targets five areas: product selection, the shopping experience, repair services, competitive pricing and a knowledgeable sales force.
Curacao now offers a wide assortment that spans the price spectrum from entry level to midtier to premium. Video brands include LG, Panasonic, Sharp, Sony and, most recently, Samsung, allowing for an 82-SKU name-brand TV wall that anchors the department and the stores.
Another recent addition is Apple, which authorized Curacao last year and is now in eight of its 11 stores, where it joins such IT staples as Asus, Dell, HP/Compaq and Sony.
Last year Curacao also created a mobile department that serves as a lead-in to the centrally located CE section. Products there include portable media players, tablets and smartphones from every major carrier, save for AT&T, with Verizon joining the fray last month.
On the majap side, GE, Frigidaire, Maytag and Whirlpool formed the crux of the assortment, with LG entering the lineup in August across all product categories. In contrast to what he described as a challenging period for CE, white-goods sales are up well more than 20 percent this year to 8 percent of the total sales mix, as the company expanded its majap SKU count and real estate, Hutton said.
Five of the oldest stores, including Curacao’s Los Angeles flagship, have been remodeled with all new fixturing, plus bilingual signage to supplant the Spanishonly displays. In addition, the chain has revamped its entire e-commerce platform, from infrastructure to fulfillment, and launched a redesigned site, iCuracao. com, in September.
Curacao credits the buying power of the NATM Buying Corp., which it joined last January, in large measure for its expanded assortments and competitive pricing, which is backed by a price-match policy.
In addition, Curacao is focused on building a more product-savvy sales force, as “sharing knowledge with customers is as important as making a sale,” Hutton said. To that end, the company has begun a certification program for CE associates that will eventually extend to all categories, and will begin tying bonuses — which associates receive in addition to an hourly wage — to their product knowledge.
The company also upped its service quotient, which includes in-home majap repairs, by trebling its support personnel in 2008 to three technicians per store. As a result, 65 percent of PC repairs are completed the same day, and the goal is to bring it up to 80 percent.
With its new initiatives in place, Curacao is preparing to move beyond its Southwestern base. Last month the company opened a second Arizona store, an 85,000-square-foot site in Tucson, and has set its sights on such possible new markets as Texas and even Chicago, with the goal of operating 25 stores within the next five years.