Michael C. Fina Co., Inc.

views updated

Michael C. Fina Co., Inc.

545 Fifth Avenue
New York, New York 10017-3609
U.S.A.
Telephone: (212) 557-2500
Toll Free: (800) 289-3462
Web site: http://www.michaelcfina.com

Private Company
Founded: 1935
Employees: 150
Sales: $75 million (2001 est.)
NAIC: 452110 Department Stores

Michael C. Fina Co., Inc. is a family-run New York City single-store Fifth Avenue retailer specializing in jewelry and gift-ware. Since the mid-1930s the store has catered to discriminating New Yorkers, selling high-quality merchandise at discounted prices while also offering solid customer service. Michael C. Fina is especially successful in its bridal registry business, as well as its corporate gift program. The company is headed by the second generation of the Fina family, brothers Charles and George, with a third generation also actively involved.

Entering the Silver Business: 1920s

The company’s namesake and one of its three founders, Michael C. Fina, was born in Brooklyn in 1907, the son of a barber. At the age of 15 he dropped out of high school to enter the silver business as a salesman. For the next dozen years he learned his trade in Manhattan. He was working for a silver wholesaler, J.W. Johnson, when he and two colleagues decided in 1935 to create their own silverware retail and wholesale business. His partners were Rose Rosenblatt and fellow salesman Lou Ellmore. They established their business at a fourth floor location at 580 Fifth Avenue on the corner of 47th Street, the heart of New York’s diamond district. With Rose handling the company’s finances, Fina and Ellmore focused on sales. In the early years the company specialized in silver plate and sterling silver hollowware, such as trays, tea sets, and candela-bras. Ellmore remained with the business for only a short time; by 1942, Rosenblatt and Fina had married.

From the outset, the business made its mark by offering top merchandise at reasonable prices and adding a personal touch, with the store owners always willing to personally address the needs of their customers. As a result, Michael C. Fina enjoyed steady, continuous growth over the years. By the early 1950s the store expanded its product lines to include flatware, which soon led to the store moving from the fourth floor at 580 Fifth Avenue to larger accommodations on the second floor. The company also started printing catalogs to support all the merchandise it now carried. In the early 1960s Michael C Fina moved beyond silver and began to sell fine and casual china and crystal. It was also in the 1960s that the store became an early entrant in New York’s bridal registry business, a move that proved key to Michael C. Fina’s continued growth. The store’s reputation for quality merchandise, low prices, and excellent customer service made for a natural fit with the bridal business. Moreover, it introduced more New Yorkers to Michael C. Fina, and business from one wedding often led to that for another. By the late 1960s, a second generation of the Fina family became involved in the business as two of Michael and Rose’s seven children, sons George and Charles, joined their parents at the store.

Death of Michael Fina: 1975

In the 1970s Michael C Fina added jewelry to its offerings. Also during that decade, in February 1975, Michael Fina died under tragic circumstances at the age of 67. After driving Charles and his family home following a Sunday night visit, he returned to his own house in Forest Hills around 9:30 when according to the police he parked his Cadillac in the garage, located directly beneath the master bedroom, and neglected to turn off the engine. The next morning Charles became concerned when his father failed to follow his customary practice of telephoning before leaving to pick him up on their routine commute into Manhattan. When he called the house and no one answered, Charles became concerned and drove to his parents’ house. He found his mother still in her bedclothes lying unconscious in the foyer, presumably having fled the carbon monoxide that had seeped into the bedroom. Michael Fina, on the other hand, was a heavier sleeper than his wife and never managed to attempt an escape. Charles found his father in his bed, killed by the fumes. Rose was rushed to St. John’s Hospital, treated in the intensive care unit, and recovered from the episode. A subsequent investigation by the police uncovered a hole in the garage ceiling caused by a water leak, which allowed the carbon monoxide direct access to the bedroom.

Rose Fina remained actively involved in the business for another 20 years, but the running of Michael C. Fina now fell on the shoulders of Charles and George. The store continued to thrive, however, its family touch more than able to hold its own against its main competition, the much larger and better known area department stores such as Fortunoff, Bloomingdale’s, Macy’s, and A&S. Michael C. Fina was also able to remain in the sterling and estate silver businesses, which many of its rivals decided to drop. By the late 1980s, the company initiated a number of changes to ensure continued growth. It opened a street level space at 580 Fifth Avenue to augment its second floor location and invested to upgrade its already strong bridal registry, installing new computer equipment and creating its own database program in order to include as much information as possible about a bride and her selections. Moreover, the company began to advertise the registry in the New York Times and such national magazines as Brides and Your New Home. As a result the registry business experienced a major growth spurt. Brides from around the country, not just the New York City area, began to register with Michael C Fina. An 800 phone number for customers and a price quote service helped to facilitate out-of-town purchases. To support the growing registry business, the company relied heavily on a 65,000-square-foot Queens warehouse, which featured strong computerized inventory control systems that allowed for the timely filling of orders.

In 1992 Michael C Fina added 2,000 square feet to its store, much of which was used to accommodate its growing crystal and china collection, as well as for the expansion of the bridal business, which was moved to a separate, designated area on the ground floor. By now the store was registering 10,000 brides a year, but in reality was doing even more bridal sales because its low prices siphoned off business from other registries. With the economy suffering a downturn, the bridal business was a strong suit for Michael C Fina, because it was essentially recession proof. The enlarged store also allowed the company to move into housewares, an important bridal segment that it was unable to previously support. To accommodate customer requests for everyday products, Michael C Fina now added casual crystal and dinnerware, cookware, cutlery, and a limited number of small appliances suitable for the bridal business. Locating housewares as well as tabletop products on the ground level, enhanced by upgraded lighting and fixturing, also played into a strategy of improving in-store traffic and attracting walk-in business with more modestly priced merchandise.

A similarly profitable area for Michael C Fina was the baby business, which featured silverplated baby cups and other gifts. Michael C Fina’s bridal database proved useful in growing this segment as well. The store offered bridal customers a $25 certificate towards the purchase of its wedding rings in order to keep the registrant’s name in its database for three years, allowing the store to touch base with customers on special family occasions, such as anniversaries and birthdays. Also in the early 1990s Michael C. Fina established a corporate division, which served corporate customers who awarded recognition gifts to longtime, valuable employees. This business was greatly enhanced by the Michael C. Fina catalog and developed into an elaborate program, which included personalized communications and a presentation video. As a result of its enlarged store and product lines, Michael C Fina by 1992 boasted annual sales of $30 million.

After expanding its tabletop business as much as possible, the natural progression for Michael C Fina was to begin offering distinctive table linens as part of a cross-merchandising strategy. In the fall of 1995 the store introduced Waterford Linens by WC Designs, which could be coordinated with popular patterns of Waterford Crystal as well as Wedgwood, a sister line of dinner-ware. The store also sold merchandise from Sybaritic, then several months later added the linens of Christofle, an upscale table-top manufacturer. Early results from table linens were so encouraging that management was eager to become a complete tabletop resource, with a particular emphasis on coordination with its dinnerware. Textiles in general looked promising. Merchandise Manager Hillary Donohue was asked about the store moving into other textile categories by HFN in 1996, and she commented, “I would love to expand into decorative pillows and bed linens but right now, we just don’t have the space.” Not only was the store limited in size, it was further hindered by a massive staircase that ran down the center.

Company Perspectives:

More than 60 years ago, Rose and Michael C Fina founded their Fifth Avenue retail business on the principle of offering merchandise and service of outstanding quality at the lowest possible price.

New Flagship Store Opens in 1998

Although Michael C. Fina had outgrown its home of 60 years, Manhattan real estate values escalated so much in the 1990s that even the traditionally less upscale stretch of Fifth Avenue between 34th and 50th streets became extremely expensive, making it unlikely that Michael C. Fina would opt to move from its diamond district location. In 1997, however, the store’s landlord decided to double the rent. With added expense already a given, management elected to move to a new location with more Fifth Avenue frontage and larger show windows, signing a 15-year, $8 million lease. The new address was 545 Fifth Avenue, on the corner of 45th street, the site of an old Horn & Hardart automat cafeteria, but now located closer to more upper-end retailers. The new flagship store, which opened in April 1998, featured 20,000 square feet of retail space spread over three floors, and instead of the eight feet of window display on Fifth Avenue at the old location, it boasted 20 feet, as well as an additional 60 feet of display windows on 45th Street. Designed by the Fitzpatrick Group, the new store featured an oval shape, which was conducive to a shop-within-a-shop concept, offering each of its vendors an excellent location and allowing such major lines as Ralph Lauren, Calvin Klein, Lynn Chas, Versace by Rosenthal, and Christofle the room necessary to make appropriate presentations. Michael C Fina also looked to grow its already successful bridal registry business, expanding the space devoted to the department to 750 square feet and also adding three new full-time consultants to its staff of five. Other departments enjoyed the benefits of added space as well. Tabletop, for instance, was now able to feature a 45-foot wall of sterling and silverplated flatware. A new gourmet housewares department was doubled in size, and the store was now able to expand its china offerings, and add woodenware as well as high-end electrics. The recent addition of table linens would also have its own shop and for the first time Michael C. Fina was able to open a baby shop to support the company’s strong effort with baby goods.

Michael C. Fina’s new home offered greater visibility in the New York market, but the Fina family also began to view the flagship location as a springboard for gaining a national presence, serving as a prototype for a suburban New York site, or perhaps southeastern cities such as Miami and Atlanta. A Crain’s New York Business article of 1998, however, expressed some skepticism about the company’s prospects: “Industry insiders say Fina may have a tough time adjusting to its Fifth Avenue address. At the same time that the retailer rushes to court a new broader customer base, it will have to work to keep its current following mollified with its trademark discounted prices. ‘People may think the fancy address means Fina is no longer price-sensitive,’ says Faith Hope Consolo, senior managing Director of Garrick-Aug Associates.” Nevertheless, the Fina family expressed confidence that it would be able to retain its traditional clientele while reaching out to new customers.

Michael C Fina turned to the Internet in late 1999 to help in its effort to expand its customer base, as well as keep pace with its major competitors. The store’s web site focused on tabletop items, jewelry, and gifts, and once again the bridal business was given special emphasis. Careful preparation for the venture included surveying brides at the Manhattan store to determine how many had Internet access at home, their online purchasing histories, and their comfort level with an online registry. Given sufficient support from its bridal customers, Fina elected to proceed with the new registry. In addition to selling the company’s wares, the site also provided product care and bridal tips. Furthermore, in 1999 Michael C Fina lost its ties to the original founders when Rose Fina passed away at the age of 87 after a lengthy illness. Nevertheless, the business continued to be very much family owned and operated and appeared well positioned for the future.