With Trans World Entertainment staying within spitting distance of black ink with the release of its half-year financials two weeks ago, it seems likely that the chain will chalk up its seventh profitable year in a row -- if it can duplicate its usual fourth-quarter trend of delivering big profits. Since 2014, Michael Feurerhas headed up the day-to-day operations of Trans World as its CEO, having overseen the last few years of revenue gains. Prior to joining Trans World, Feurer spent two decades working for clothing stores, most recently as president/CEO of the 200-unit Vanity Shop of Grand Fork Inc.; prior to that, Feurer served as senior vp of merchandising for the 350-unit Coldwater Creek chain, after having spent 10 years at the Gap.
Billboard caught up with the executive a few months back to see how things have been going under his tenure, including the company's October 2016 acquisition of digital retailer etailz, the health of Trans World's physical retail stores and the changes facing the industry as a whole.
Billboard: What motivated the etailz acquisition?
Mike Feurer: It's an absolute expert in the field of marketplace retailing, such as eBay, Amazon, Jet and the many more new and emerging marketplaces. It opens up to us an opportunity that’s in line with how the U.S. retail marketplace is evolving. etailz takes a data-driven approach to inventory and pricing optimization.
How does it fit in with Trans World’s operation?
It is unique and distinct in what it does, but it's complementary as we embark on our transformation. To create the next-generation commerce model, we need to maximize the tools we have constructed, acquired and are developing. Inherent in this vision is a substantial entertainment and pop culture heritage. The etailz model lends itself to our heritage and to our well-established industry partnerships and alliances. It aligns with the digital influence on the customer shopping experience in America.
What do you mean when you reference industry partnerships and alliances in reference to etailz?
With this business, we could be very valuable to our partners who want to have a marketplace retail presence. We are in a unique position to help others unlock components of their business in ways that they might not have explored.
Let's shift to your stores operation.
It's very important to understand as we reinvent ourselves to remember what our strengths are. We still are a destination for physical media that is important to many customers. Yes, there is a diminishment of physical penetration as streaming and downloading came on, but physical is still very real and vibrant because it is very important to many customers to own something.
The other thing that is important to understand is to continue to create an inviting comfortable environment for the very wide demos that our stores enjoy. What does that mean? We have to be able to serve both the soccer dad and his 13-year-old. So we sell G-rated movies and R-rated movies. We sell Drake and Pink Floyd’s Dark Side Of the Moon. Whether you are looking for new releases or catalog, we have a credible offering. Physical media is still over 50 percent of our business.
Besides music, your lifestyle merchandise also plays to a wide range of demos.
We have extended the potential for our customers to be entertained not only through physical media but through tangential lifestyle products. What a great anchor to have in film and music as we go through this process of leveraging our strengths to realize this vision we have to meet our customers' entertainment and lifestyle needs. Within that, music and movies are very important, not only for hit product, but for the fan connection and the expansion to other meaningful pop culture and lifestyle products we carry.
Will you be opening stores and growing the chain again?
I am not going forward looking to open 20 stores a year. I will evaluate opportunities as they are presented. We are opening smaller stores nowadays and looking for short-term leases that give us great flexibility, which fortunately is something we have been doing for a while. There are a lot of retailers out there that don’t have that flexibility and are getting crushed with five and 10-year leases. We still have something interesting and unique to offer malls: we have a space where teenagers and parents can be in the same place at the same time.
