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Z Gallerie Arrives in New York

Lifestyle Merchandising Primed for Soho Store

New York — It's definitely a different challenge operating a fashion lifestyle home furnishings store in New York.

That was the premise that the owners of Z Gallerie accepted as they opened their first store here last week in the trendy Soho area of Manhattan.

“We knew coming in that New York was special, different,” remarked Mike Zeiden, cfo of the company he owns with his brother Joe, ceo, and sister Carole Malfatti, vp, merchandising. “We came in here with our eyes wide open, and we know it's going to be a learning experience as we go along — but we're not treating the store with kid gloves, and we're not taking our eye off our other stores.”

Z Gallerie, which started in 1979 with the three siblings selling posters in California, is now a fast-growing home furnishings specialty chain with 2005 sales of about $208 million, Zeiden said. Comp-store sales for '05 increased 7% on top of an '04 comp increase of 13%. Posters and wall art remain an important part of the mix that includes some 12 merchandise categories including home textiles, furniture, decorative accessories, tabletop and books.

The store here is No. 70 in the chain, which is now represented in 24 states, Zeiden noted. New stores on the “definite” schedule for this year include units in Baton Rouge, La., Corona, Calif., Charlotte, N.C., and Louisville, Ky. One or two additional units are in negotiation with possibilities in Chicago, Florida, Texas and Colorado.

“Depending on our response in New York, we would like to increase our presence in the Northeast,” Zeiden related.

In developing the store here, a 12,000-sq.-ft., two-level unit, the trio knew that services and training would be critical. “Nowhere else have we had such intensive training and prepping of management,” Zeiden said. In addition, they were aware of the need for delivery services and from the outset arranged for a courier as well as a local delivery service.

Initially, large items such as furniture will be shipped from the company's California warehouse, but as the Atlanta warehouse matures — it opened in September — it will be the location for merchandise distribution, probably by mid-year. Until then, the company is absorbing the extra cost of shipping from the West Coast.

As for prices, Zeiden said they are the same here as in California and elsewhere. “The first reactions from customers were that they were amazingly low — it's a nice advantage.”

This store in its basement level features the Studio, “a lighter, more feminine approach with all crisp colors. It needed to be separate from the rest,” Malfatti explained.

The company's gallery buyers and merchants as well as Malfatti, who is in charge of merchandise, “are here to understand the New York differences, and will make tweaks as needed.”

But Malfatti explained, “We've done no tweaking of product for this store.” The stores are merchandised with new collections twice a year. In home textiles, key segments include decorative pillows, throws and window panels. “We have to have bedding for our bedroom furniture, which we merchandise as a go-with and we get a lot of big 'Oh, yes' reactions from customers.” But she doesn't consider it part of the core mix.

The new collections are inspired by myriad influences. “It could even be a vase that we build a whole home collection around,” she remarked.

The key palette for the season is chocolate brown, light blue and lots of ecru.

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