By NEIL HARTNELL
Tribune Business Editor
The owner of the former Robin Hood store yesterday likened himself to “the Phoenix rising”, as he returns to the Bahamian retail scene with “an unprecedented concept” he believes will cut his operating costs by 60-65 per cent.
Sandy Schaefer told Tribune Business that he was “pioneering an entirely new retail format” through his Everything Must Go!!! location, which is set to open at the former Robin Hood store on Prince Charles Drive on November 27.
Disclosing that he had invested some $1.2 million in his latest venture, which will employ 35 staff, Mr Schaefer outlined a strategy that is effectively the opposite to 24/7 retailing.
He explained that Everything Must Go’s strategy is founded on being open just three days a week, thereby enabling him to control key costs - labour and utilities - and minimise inventory shrinkage and theft.
To create the ‘buy now’ impulse, the store will, after opening on the Thursday, drop its prices by 10-15 per cent on Friday and then, on Saturday, drop throughout the day until inventory is completely clear.
Pledging between 10 per cent to 50 per cent price savings, via innovative sourcing and buying strategies, Mr Schaefer told Tribune Business that Everything Must Go is being established as a ‘Value-Added Tax free zone’.
Emphasising that this does not mean VAT evasion, Mr Schaefer said the goal was for his business to exploit its greater margins by absorbing the tax itself, rather than passing it on to consumers.
Acknowledging that his return, and business strategy, might make “enemies” among rivals in the Bahamian wholesale and retail trade, Mr Schaefer said he had adopted a policy of “100 per cent transparency” with Customs to prove everything he did was legitimate.
“It’s an entirely new retail concept for the Bahamas and the world,” he told Tribune Business. “This is something that will be somewhat unprecedented. We can create an indoor mall experience that is only open three days a week.
“The concept is opportunistic buying, taking advantage of all the connections I’ve established through 45 years of being in retail, buying product for next to nothing and taking advantage of short-batch items; items that have a limited shelf life.”
The businessman, undeterred by Robin Hood’s closure some two-and-a-half years ago, said his latest retail venture was forecast to generate between $1.2-$1.4 million in top-line revenues per month - a target that was “not outrageous” and could be exceeded.
Mr Schaefer explained that Everything Must Go, which will rely on quick inventory turns and strong supply chain turnaround, was able to source top-quality product at bargain prices via product returns to the likes of ‘dot.com’ operators and UPS ‘undeliverables’.
Tribune Business was present as staff were unpacking inventory, ranging from air conditioning units, televisions and kayaks, to footwear and apparel, preparing for the first phase in a three-pronged opening strategy.
The initial opening will use just 15,000 square feet, or one-third of the available 45,000 square feet at the former Robin Hood store, although a 40 foot-tent outside will be employed to sell food products.
Mr Schaefer said the second phase, which he hopes to launch by March 1, 2015, if not sooner, will boost Bahamian entrepreneurship via the leasing of 20,000 square feet to numerous vendors, creating a mini-mall.
The final phase, which might be merged with the second one, will see Mr Schaefer go ‘back to his roots’ as a flea market operator in the New York and New Jersey areas, bringing the same concept to Nassau.
The proposed outdoor ‘Flea Market’ will be based outside the former Robin Hood store, with vendors paying a nominal rent.
Mr Schaefer explained that Everything Must Go was effectively the antithesis of modern 24/7 retailing, and was more of a throwback to when persons did “not shop every day of the week” and went to church on Sundays.
Recalling how the US flea markets he operated were only open two-three days a week, he added: “There’s not a retail store in the world that would not love to be open only on the days they are busy.
“For the longest time, retailers have been catering to the whims of the customer, and the reality is there’s a cost for that.
“We will become the pioneer in terms of this kind of retail, this format of retailing, not being open every day of the week.”
Mr Schaefer estimated that by being open for just three days a week, he would cut operating costs by 60-65 per cent, plus mitigate inventory theft and provide lower prices/costs to consumers.
“When VAT comes in we’ll be the first VAT free zone,” he told Tribune Business. “That’s not to say VAT is not paid; it’s just that it’s paid by us, not the customer.
“That will create an uproar, but we’re doing it because we can and it’s smart. On certain items we may not [be able to absorb] the VAT, but it’s our intention to be able to.
To stimulate consumer demand, Everything Must Go will steadily lower its prices over the course of the three days it is open, enticing Bahamians in with the prospect of a deal that might not be there again for some time.
“Our prices on Thursday will be lower on Friday, and the Friday prices will get lower by Saturday,” Mr Schaefer pledged. “Our prices on Saturday will get lower by the hour.
“You feed a feeding frenzy to a certain extent. There’s no guarantee they’ll have that same deal today, tomorrow or next week. All the appliances we sell will have a 60-day warranty.”
To stimulate the notion that Everything Must Go will be a consumer “treasure hunt”, Mr Schaefer said the company would also refrain from heavy media advertising.
To refute any claims that he and Everything Must Go might be evading taxes to ensure they could offer low prices, Mr Schaefer said he was employing a policy of total co-operation with Bahamas Customs.
“I approached them,” he told Tribune Business. “Clearly, the fact we’re buying things at such drastically reduced prices is going to force people to question things.
“I don’t want Customs to be put in a compromising position. We have a policy of 100 per cent transparency. If they need to see invoices, if they need to see wire transfers, they will.
“They’re going up to see one of my suppliers at my expense. In order to comply with WTO rules, you have to prove the deals you get can’t be based on personal relationships or favouritism.
“If you had my contacts, negotiating skills, and available cash, can you get the same deals I get? The answer is yes.”
Mr Schaefer added: “I’m not doing this to make enemies, although clearly we will. I’m doing this once again to serve the Bahamian people.”