ROME — “Herb” Philipson’s, a Rome–based retailer that brands itself as “Outfitters for the Great Outdoors,” is opening two new stores this summer — expanding the chain from eight to 10.
The DeWitt store, to be located at 3179 Erie Blvd. E. in the DeWitt Town Center (the former Hechinger Plaza), has a projected footprint of about 34,000 square feet. The store is scheduled for a June opening. Gary L. Philipson, president, negotiated a 5-year lease (and a 5-year extension) with Grazzi Zazzara, president of the Icon Companies, which owns the property.
The second Herb Philipson’s store is scheduled to open in September in a plaza in Oswego. The lease was negotiated with Red Stone Investments and brokered by the Pyramid Companies. Red Stone specializes in development, commercial brokerage, and distressed debt with 75 properties encompassing 4.5 million square feet located in 15 states. Philipson’s Oswego venue is 35,000 square feet.
“Both sites serve a stable population and are located in well-trafficked areas,” says Philipson. “We had been looking at opportunities for some time, but needed to find the right location at an affordable price. The stores should be a good fit for the area residents who appreciate brand names at a reasonable price.”
Philipson’s father Herb opened his first store in Rome 1951. Herb Philipson’s Army & Navy Store, Inc. catered to hunters, anglers, and campers. Philipson opened a second store in Oneida 1970, a third in New Hartford in 1981, and a fourth in Herkimer in 1987. Further growth continued with the opening of stores in Watertown, Liverpool, Syracuse, Newark, and now DeWitt and Oswego. Philipson uses a Goldilocks approach to determining the size of each store: “The size is not too big, not too small; it’s just right.”
From its original 800-square-foot location in downtown Rome, the company now owns or leases more than 420,000 square feet, including a new 100,000-square-foot distribution center in Sherrill. When the two new Herb Phillipson’s stores open, total employment should approach 200 full-time employees. The Business Journalestimates annual revenue at $35 million. The corporate stock and real estate are owned by the Philipson family.
“Retail is a very competitive business,” says Philipson. “We not only compete with the traditional big-box stores like Walmart, Dick’s, Gander Mt., Bass Pro, and Kohl’s, but we also compete with growing online sales. My dad’s approach was to carve out a niche of selling brand names at low, discounted prices. One way to grow the company was to expand our customer base beyond outdoorsmen to include men’s and ladies’ casual wear, work wear, active wear, footwear, and sporting goods. While offering a wider selection to our customers, we still follow the original concept of selecting brand names such as Under Armour, The North Face, Columbia, Timberland, Carolina Boots, and Levi’s. The challenge is to know your markets well and the right price points. There is no substitute for being on the floor listening to customers. In that sense, we still run a mom-and-pop operation.
“Other challenges to competing are to create a critical mass so we can buy in volume with discounted pricing: You can’t do that as a small operator,” opines Philipson. “Then there is the need to create ‘multiple revenue streams’ by expanding the chain to blunt the impact of one or two major businesses in an area closing down or laying off a large number of employees. In small towns, it can be devastating when major employers downsize or close.”
Philipson ascribes much of the company’s success to his staff. “We rely on long-time employees who understand the importance of attracting and retaining customers by being knowledgeable about the products. Add to this the ability to choose staff who are people-friendly and glad to help customers without any high-pressure. The attitude [to be knowledgeable and helpful] starts with the leadership team: Dave Sawdy, senior vice president; Mike Palmer, CFO; Guy Viti, vice president of operations and merchandise; and Sandy Kelsey, vice president of human resources.” Herb Phillipson’s also relies on local partners to ensure its financial success: NBT for banking; Fitzgerald, DePietro & Wojnas CPAs, P.C. of Utica for accounting; and Saunders Kahler, LLP of Utica for legal work.
While most retailers stress the phrase “location, location, location,” Philipson adds his own quip: “… promotion, promotion, promotion. To be successful, we use a broad spectrum of advertising [channels] to reach our audience. We still depend on newspapers, radio, and TV as well as in-store promotions and area trade shows to spread the message. But we have also focused on redeveloping our website to sell gift cards online and to drive traffic to the stores. In addition, we utilize social media, such as Twitter and Facebook. Our Facebook account has more than 6,000 followers, [up nearly 100 percent since just last summer.] We promote our Price-Fighter Club loyalty program, which now has more than 50,000 registered members. Under discussion is creating mobile apps and being able to buy product online.”
Another challenge for the growing retail chain is the region’s sluggish economy. “Central New York and the Mohawk Valley are tough markets without a lot of growth,” stresses Philipson, “but we are still bullish. Herb Phillipson’s is looking forward to seeing [economic] growth driven by nanotechnology, unmanned-aerial systems, and cybersecurity. We’re hopeful these and other developments will positively impact the area’s economy.”
Philipson, 58, a New Hartford native, joined the family business in 1980, shortly after receiving his bachelor’s degree in history from Union College. He became the company’s president in 2001. He and his wife Lisa, who is a community-education coordinator at Mohawk Valley Community College, live in New Hartford. The couple has three children.
Philipson describes his decision-making process to that of a tortoise. “My style is to spend a lot of time looking at opportunities to expand [the chain] and then to spend a lot of time evaluating the potential. I guess I am like a tortoise in that respect,” Philipson says reflectively. “I certainly have no ambition to be another Walmart, but there are opportunities to grow in the [brand-value, low-cost] niche where we feel comfortable. It just has to be the right fit.”
There seems little doubt that Philipson is focused longer-term on future growth. Herb Phillipson’s took 52 years to create a four-store chain; it took just a dozen years to open another six. The pattern of growth reflects an acceleration. The expansion into DeWitt and Oswego followed the move within the last year from a 10,000-square-foot distribution center to a 100,000-square-foot replacement. Philipson is also aware that expanding beyond 12 stores requires additional management controls, something he is already considering.
In the short term, however, the company president says he is focusing on opening two new stores and integrating them into his growing chain. Still, no one should be surprised by a future announcement that Herb Philipson’s is opening more stores. “We may be a small player,” acknowledges Philipson,” but we know how to compete with the big-box stores. Famous brands at low, price-fighter prices is still a winning formula.”