Retail dreamers
Part I of II
(Editor’s note: This is the first of two stories on young entrepreneurs. These couples with kids thrive on managing a dizzying swirl of multiple businesses. We interviewed them separately. First you’ll hear his perspective, then hers. In Part II in a future issue, you’ll hear the stories of another retail couple in Santa Rosa.)
Some entrepreneurs make the risky realm of retail look easy.
Shane and Sacha Sterling opened Karma Clothing store selling women’s upscale clothing in Sebastopol in September 2014 and immediately put the business up for sale for $195,000. Neither owner works in the store; a manager handles day-to-day details. The couple, with girls ages 4 and 6, see themselves as retail visionaries in west Sonoma County. They plan two more retail openings later this year: a café and a frozen yogurt shop.
Remarkably, the Sterlings already have an interested buyer who plans to close a deal for the Karma store by April without a single year of proven sales or profits. The business pulled in nearly $30,000 a month in its first holiday season. The store location – with a long display window beckoning shoppers as they traverse a walkway to two upstairs spas and the Dhyana Center yoga studio across from a Whole Foods store – is favorable. The store enjoys good odds in the fluky retail business domain.
This is the second foray into Sebastopol retail for the Sterlings. Their first store, Funk & Flash, located about three blocks south on Main Street, was initially Mr. Sterling’s creation, launched five years ago based on his gift for picking fashionable clothing. After putting the store on the market for $90,000, they found a buyer in about a week, with formal transfer of ownership on Feb. 1 to Jared Milligan, founder of Pacific eDocument Solutions, a document scanning company with locations in Petaluma, Novato and San Francisco.
Him
“The buyer calls me the clothes whisperer,” Mr. Sterling said of his keen sense for fashion, chuckling about Mr. Milligan, the new owner, who has not worked in fashion but was a regular customer. “I have an innate ability to understand not only men’s fashion, but women’s fashion just as well. My women’s boutique, Karma, is a beautiful example. I not only understand the clothing, but I understand how to communicate with women in the context they want to be communicated to. They want a sense of ease and luxury and comfort when they’re shopping. For them to feel comfortable spending $250 on a pair of earrings, they really need a luxurious-feeling container for that.”
Funk & Flash, with intriguing clothes for women and men, what Mr. Sterling calls “a party vibe,” had gross sales of nearly $400,000 in 2014 and profit of $80,000. He opened Funk & Flash in 2009 to capitalize on the offbeat fashion appetite of folks who gussied up for the Burning Man celebration every year then wanted to perpetuate the festival’s fun, free-spirited atmosphere. “I understood the market really well,” he said. “There was no risk for me to undertake a clothing retail enterprise. I had it completely locked down.” But while Mr. Sterling’s knack for Burning Man fashion never faltered, he burned out on running the business, he said in an interview next to the store’s cash register.
As many retail business owners discover, even a small operation gobbles time and energy, leaving its owner depleted no matter whether profits materialize. If the operation loses money, pressures mount more rapidly and with greater intensity.
“I have looked at so many businesses over the years and thought, this person has no idea of their market,” Mr. Sterling said. “They have money. They have a dream. They have hopes. But the reality is different. It’s not easy.”
From a business standpoint, “retail is the hardest gig,” said Mr. Sterling, who is 42. “But if you have a family to support, and a passion and understanding of a specific market, hey, I busted my butt for three years. I was here seven days a week, 10 hours a day, all myself.”
Finally he was able to take a day off occasionally and hire help. “I didn’t have the option of failing. The only security you have in retail is that you are so committed. You’re gonna do the grunt work – whatever it takes to keep the doors open. You’ll be the sales staff, the buyer, the janitor, the one who does everything it takes. That was me for a lot of years.”
The hard work paid off. The Funk & Flash brand, which peaked at $500,000 in sales under his management in 2012, will likely do well under its new owner.
“My new store Karma is a distilled version of Funk & Flash,” he said, “everything I have learned over the five years of doing retail. It’s more refined, simple, effective, destined to be more profitable. It’s targeting the exact demographic in Sebastopol who have money to spend.”