High Fashion at Low Prices

In Manhattan last week, newspapers ran double-truck ads with the word "Go", in 15-in.-high type. The small type below explained that Ohrbach's famed and prosperous clothing supermarket was leaving its down-at-the-heels quarters on 14th Street to go 20 blocks uptown and "join the well-to-do company of Macy's and Gimbels.

The oldtimers gave the new arrival a double-edged welcome. In full-page ads, Macy's hospitably showed an opening-day mob scene in front of the new Ohrbach's fac,ade, then slyly suggested: "If you live through this, you're ready for Macy's." When spry old (69) Founder Nathan M. Ohrbach (rhymes with floor tack) unlocked the plate-glass doors, he barely got out of the way in time before the mob rushed in. By closing, 100,000 people had jammed into the new store, spent more than $500,000.

The New Look. The customers who followed Ohrbach's uptown found a big change from the cluttered aisles and creaky flooring of the old store. The new Ohrbach's (actually the 47-year-old James McCreery department store, remodeled) sported carpets of grey and buff, walls of pastel pinks and blues, modern display cases, more try-on rooms. But nothing was changed in the business methods that have made Ohrbach's a phenomenon of U.S. merchandising.

By operating on a cash-and-carry basis, Ohrbach's keeps its operating expenses down to 17% of sales (v. the department-store average of 35%), and holds markup down to about 20% (v. the average 40%). By eliminating sales slips. Ohrbach's saves time and trouble for clerks. And by a fast system of recording price tags, Ohrbach's can give each of its 150 buyers a detailed account of the previous day's sales; hot items can be reordered before their sales appeal cools. Twice a week buyers examine the coded sales tags, mark down all items that fail to move quickly. The price cutting continues, even below cost, until the goods are sold. Such practices enable Ohrbach's to turn over its inventory 18 times a year (v. five times for the average department store).

Frocks in Paper Sacks. Although most Ohrbach's sales are under $10, coats and dresses may run as high as $300. Ohrbach's European buyers purchase $600 French and Italian originals, which are copied in the U.S. to sell for $100. In Ohrbach's Oval Room Boutique, where the higher-priced dresses are sold, customers make appointments for dressing rooms, get quick, individual service from salesgirls.

But in most parts of the store, customers find their own way through the racks of merchandise, try on their selections without help, stand in line at the cashier's stand, and carry their purchases home stuffed in a paper sack. Ohrbach's flouts the retail-store tradition of making all sales final on marked-down merchandise.

For a week after any sale, a customer may return the item, get her money back without waiting or argument if the price tag is still on the merchandise.

The Institutional Approach. For its subway trade, Ohrbach's runs high-style carriage-trade ads. It never plugs special items but plugs the store. Each ad is built around a picture, attracts attention and also makes a point, e.g., one showed a man holding up a well-dressed woman in his hand, carried the caption: "It's easy to support a woman who shops at Ohrbach's."

In their old store, Ohrbach's sold $20 million worth of merchandise a year, plus another $30 million in its stores in Newark and Los Angeles. In the new location, Ohrbach's President Jerome Ohrbach, 46, son of the founder, expects to do much better. Says he: "A woman going shopping usually goes to midtown. It's an extra expedition for her to go all the way down to 14th Street. By moving up with the other big stores we can convert an occasional customer into a regular customer."

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