Phoenix Business Journal - Fascinations

Fascinations has always worked in the risky side of retailing — or rather, the risqué side — selling "intimacy-enhancing merchandise" since it opened in 1981.

Now, the Tempe-based retailer is going through a major rebrand, which includes a venture into an even riskier side of the industry: apparel, a segment that's had nine bankruptcies in the first three months of 2017, and plenty more since then. Today, children's apparel retailer Gymboree filed for Chapter 11 bankruptcy.

Troy Piazza, Facinations' new CEO, knows what's been happening in the retail industry. He came from Bluestem Brands Inc., an apparel and specialty brand retailer with 15 e-commerce sites, and spent more than a decade with Levi Strauss & Co. He decided to take on the role at Fascinations because "the challenge of creating a brand shift" fit in his wheelhouse.

"We know we can't compete with other apparel companies. We're not going to be able to compete with Levi's or Lucky or Buckle," he said. "That's why we're offering something different, something that keeps us separate."

Fascinations is going through a major shift in how it presents itself, with plans to attract a broader audience through a limited offering of mature videos and an expansion of sensual wellness, bath & body products and fashion apparel, including some local products, such as Carrie Martz's UVee.

"We don't want to be known for those products with a harder look," said Piazza. "We want anyone who knows Fascinations and what it used to represent to come in here and experience what we offer now. We're not the same."

The company's expansion of apparel, which has 15 locations in Arizona and Colorado, is focused on women's apparel, with everything from the growing "athleisure" style to bathing suits to nightlife. A large portion of what's offered is targeted toward moms, who make up around 60 to 70 percent of Fascinations' customer base, said Keri Birchby, the buyer for the company.

"These are more tasteful and conservative looks than some of the things we previously offered," Birchby said about Fascinations' lingerie and swimsuit offerings. "But our clothes have an edgier side than what you can get at other stores."

The apparel section is the first thing customers will see at the newly re-branded stores, the first of which is opening in Scottsdale off Shea Boulevard and Scottsdale Road. Piazza said they spent somewhere in the ballpark of $500,000 to create the new space, which formerly housed a Discount Tire.

Piazza said the rebranding rollout will be determined on future revenue, which could include some new locations, though he expects the new look and feel of the stores to increase sales by about 10 percent.

Those 15 locations, whether new or original, are also a core part of the re-brand and staying afloat in the apparel industry. While e-commerce is taking away business from many shopping malls and department stores, Fascinations' online business only makes up about 1 percent of operations, Piazza said.

"This a niche in the marketplace. Customers want to come in and experience our products firsthand instead of buying them online," he said.

Some of those products — the kind that Fascinations was originally best known for — are still around. They're just a little further from the front of the store.

Article Credit: Steven Totten - Reporter Phoenix Business Journal

Article Link: Why A Phoenix retailer is venturing into one of the riskiest parts of the industry

Phoenix Business Journal - June 13th, 2017

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