Hass Shoes

Abstract

Suitable for courses on entrepreneurship, managing small businesses, marketing, and strategy. The case raises classic issues about how a stabilized business can reignite its growth. It poses the questions: How does a business increase customers, increase spend per customer, create more reasons to buy, bundle complementary products or services, and expand selling locations with little capital outlays? Excerpt UVA-ENT-0142 Nov. 27, 2009 Hass Shoes Hass Shoes (Hass), an independent shoe retailer located in Charlottesville, Virginia, had been in business for more than 15 years. In its freestanding store, Hass primarily carried quality shoes for men and women and accessories such as socks and hosiery. The store provided parking for its customers and, to better serve its working customers, was open from 12:00 p.m. until 8:00 p.m. on Monday through Friday; 9:00 a.m. until 6:00 p.m. on Saturday, and 12:00 p.m. until 6:00 p.m. on Sunday. Conscious of its membership in the community, Hass contributed to local charities and belonged to several civic and business clubs. In 2008, Hass joined the National Shoe Retailers Association (NSRA) and had been using the association's benchmarking process to track products, services, expenses, and inventory turns of its current performance against past performance and other best practices. Hass now operated above NSRA averages. From its approximately 10,000 transactions per year, Hass grossed $ 800,000, averaging $ 80 per sale. The business turned its inventory 2.7 times a year and, after paying its owner's salary, netted a 7% before-tax profit. Hass did not try to compete on price but focused instead on service, selection of shoes, and maintaining a stock of hard-to-find sizes; however, Hass did not collect the usual data on individual customers such as number of visits, number of purchases, or the total average cost of purchases per year. Hass had weathered the 2007 recession well, but its business had basically been flat since 2001. Now the shoe retailer wanted to grow its revenue by at least 10% per year and increase its net margin. . . .