SAN RAFAEL – The aggressive leasing campaign to fill the newly renovated Northgate regional shopping center gave a Santa Rosa-based comfort-fashion shoe store chain a chance to open its seventh location and return to Marin County.
Amid the worst economic recession in decades, family-owned Sole Desire on Nov. 12 opened the San Rafael store, one of the first new retailers to do so in the 723,000-square-foot reconfigured center. The family operates three stores in Santa Rosa, one each in Sonoma, Petaluma and San Francisco and would like to open a Napa store next year.
Chief Executive Officer and co-founder David Astobiza, 66, declined to elaborate on the initial lease terms mall owner The Macerich Co. extended. He did say that what made the difference was the ability to re-open in Marin for a fraction of the tenant-improvement cost plus an existing Marin customer base.
"We've been looking to come back for the last three years," Mr. Astobiza said.
In its 19-year history, Sole Desire had a store in San Rafael and then in San Anselmo from 2003 until it was damaged in the flood at the dawn of 2006. Mr. Astobiza said the company has a mailing list of more than 2,000 Marin customers from that time.
The company has garnered a following since its beginnings as one of the first retailers of German-made Birkenstock sandals in the recession of the early 1990s. He introduced "comfort fashion" and "earthy" European brands to domestic markets via suburban Sonoma County.
Long-term goals are to enter the wholesale business and add locations. Sole Desire designs European-style "comfort fashion" shoes in-house, has them manufactured in Mexico and sells them in its stores at better values than imported brands. Sales of the five lines of Sole Desire-made shoes make up about a quarter of sales, and the hope is to expand that to 40 percent to half of sales eventually.
To be sure, Sole Desire has suffered from recessionary forces on consumer spending as have many retailers, but the company has been able to mitigate sales decreases through expansion into new markets, according to Mr. Astobiza.
The company is aiming to reach $5.7 million in sales this year, an 8 percent year-over-year decrease on top of an about 10 percent decrease in 2008 from peak sales in 2007. It would have been a 12 percent to 14 percent drop in sales for this year had Sole Desire not opened a 1,300-square-foot store in a previous shoe store space in Santa Rosa Plaza mall in late September 2008, coincidentally just as the economy worsened dramatically.
The new San Rafael store added overhead costs, but with its low initial rent structure, the store is expected to help lift overall revenue and maintain positive cash flow, according to Mr. Astobiza.
So far, the company has grown to 38 employees, including a few more with the new store, without layoffs. To do that, family members took pay cuts in the past year.
As Mr. Astobiza has handled store development, in the past three years his sons have assumed day-to-day management. Dave, 31, is in charge of operations, and Daniel, 29, oversees finances and policy. Both work with vendors and shoe design.