Retailer of the Year 2012: Gary’s Wine & Marketplace

The first thing folks remark about is the sheer pizzazz of the Wayne, N.J., outlet of Gary’€™s Wine & Marketplace. Despite its mammoth 24,000 square feet, in a former Treasure Island space, the three-year-old store offers unique touches like a raised Italian-villa-style construction over the entrance, potted trees and a fine-foods area as large as many stand-alone delis. Yet it manages to convey a sense of intimacy and approachability at the same time, and even a note of whimsy in some of its gift offerings and such oddball offerings as a case stack of a new black-colored water called Blk Water from a New Jersey marketer. ‘€œIt’€™s as nice a store as I’€™ve been in, entirely beautiful, very shoppable,’€ said one battle-hardened distributor, in a typical remark. (He requested anonymity so as not to antagonize his other retail customers with less-distinguished stores.)

The Wayne store is the most striking flourish of a three-store chain that, since its origins in 1987, has elevated the wine experience in northern New Jersey and, in the process, made its proprietor, Gary Fisch, something of a regional celebrity. In citing Fisch as one of New Jersey Monthly’€™s 101 Most Influential People in the Garden State in 2009, Fisch was credited with having ‘€œcombined the New York idea of the wine superstore with the European idea of the upscale wine-and-food emporium . . . His down-to-earth style has made him an oft-quoted wine commentator and an informative lecturer. Over the last 20 years, his annual Grand Tasting has contributed $250,000 to Morristown and area charities.’€

Beginnings

The chain goes back to 1987 when Gary and his brother Mark, a decade older than him, started running the first store, a 1,500-square-foot unit in Madison. Gary had graduated from Rider College, with a degree in political science and having taken no business courses to speak of. But the boys’€™ father had worked in the wine and spirits business at Fedway Associates, the big distributor, and Gary had helped out on a part-time basis in his senior year, pulling in $60 a week working three or four accounts. Knowing he could sell, upon graduation, at age 21, he figured that career might be worth a whirl. But the experience proved initially disastrous: the company gave him a list of unsold accounts to work and it quickly became clear, Fisch recalls, why they were unsold and, usually, destined to remain that way. Fisch, working on a straight commission, earned next to nothing.

During the company’€™s enforced August vacation, Fisch went to Napa Valley to visit with Louis Martini, the maker of cabernet sauvignon wines. The timing seemed to be poor: that year was one of the earliest harvests ever and the winery was in barely controlled ‘€œbedlam,’€ Fisch recalled. Even so, Martini proved a gracious and generous host, inviting his young visitor to taste grapes in the back of a truck and to taste them in fermentation in the winery basement. The visit proved a revelation to Fisch.

Upon returning, Fisch shifted his focus from liquor to becoming an ambassador for Martini wines. That meant a shift from earning a 5% commission on $100 cases to earning the same commission on cases running just $8 to $12 ‘€“ but since he hadn’€™t been selling so many of the $100 cases anyway, it wasn’€™t that much of a tradeoff. Fisch continued to build his wine knowledge at the Sommelier Institute in New Jersey and at wine courses at the Windows on the World restaurant in the World Trade Center. It set him in what would prove a permanent new direction. When one of his Fedway retail accounts decided to sell out, Gary and his brother jumped at the opportunity. He was 29 at the time.

They were entering the retail wine business at a time it was still dominated by brands like Martini, Lancer and Blue Nun ‘€“ ‘€œbut the tidal wave was coming in,’€ Fisch said. Gary’€™s has risen swiftly with that tide. Following two moves, the Madison location has grown to 13,000 square feet. In 1997, the brothers opened their second store, a 10,000-square-foot unit in Livingston, which they later sold, and in 2001 added a 13,000-square-foot location in Bernardsville. By then Mark Fisch was ready to retire, but Gary continued to build his retail empire in 2008 with the opening of the 24,000-square-foot location in Wayne.

The chain is an interesting amalgam. Bernardsville, situated in a bucolic part of New Jersey that includes horse farms and antique stores, serves the highest-income demographic group but has the lowest customer-traffic count of the three stores. The Madison store, in the dead center of town on Main Street, serves a clientele of middle- to upper-middle-class customers. By contrast, the third location, shared with a Ski Barn store, is a complete departure. While it’€™s adjacent to the wealthy Franklin Lakes area, it’€™s also situated on a major north/south highway, Route 23, which generates 63,000 cars per day. Despite all the cunning neighborhood touches, it’€™s the farthest from a neighborhood store one can imagine. The company’€™s nearly $50 million in annual revenues break down about 35% for Madison, 25% for Bernardsville and 40% for Wayne, Fisch indicated.

Navigating the Stores

As one enters the store, one is steered right, and the first thing to come in view is a gift wrap area and, directing one left toward the main area, case stacks of the store’€™s Top 10 wines. In the main part of the store, one passes a striking display of flowers for sale. So even before one has advanced very far, it’€™s been established that this is a very different kind of store. Fisch acknowledges he isn’€™t yet making money on the flower section, though individual wedding orders can be lucrative, but says it’€™s viewed as a visible way to add value to guests, along with an additional touch of flair to the look of the store.

Once in the main part of the store, one is struck by the sheer size of the space and its constituent departments ‘€“ including the food area the size of many stand-alone delis ‘€“ and a monumental structure built along the store’€™s front wall in the form of a Tuscan villa, replete with potted trees at its base. The structure in fact houses the executive offices, up an internal flight of stairs and offering managers a panoramic view of all the store’€™s activities. Fisch said the feature grew out of practical considerations: the store needed an effective windbreak at the front entrance, so why not put the offices there? But it helps conjure up a romantic setting that likely is highly effective, particularly among the female consumers who are such an important part of the customer base, he said. Though the store is massive, its designers took shrewd steps to mitigate the shock, through the use of dropped lighting and the clustering of some store areas like the deli into self-contained neighborhoods.

The food area offers a massive cheese selection as well as such less-expected items as lavishly decorated cakes from a Staten Island, N.Y., vendor who happens to live in the neighborhood of Fisch’€™s store in Bernardsville. Gary’€™s brings in its own olive oil, available at a self-dispensing station. Another table houses an eye-catching display of pocketbook-style wine carriers in designs like leopard print; the store moves hundreds of them a year, Fisch indicated.

Center Store Tasting Area

At the center of the store is a large circular counter that is segmented into 2 halves. The half toward the entrance accommodates a tasting area that is used daily ‘€“ the day that Beverage Dynamics visited, they were slated to be pouring the Cricket Hill beers in the evening. This activity is no afterthought: Fisch invested in a dishwasher that enables him to pour his wines into Riedel glassware rather than plastic cups. (He hopes to make a similar investment in the Bernardsville store soon, to upgrade the tasting experience there, too.)

The other side of the circular stand hosts the wine sales team, their business cards on the counter, reference books on shelves in the back and liquor rarities housed in a glassed-in case in the back wall. Fisch aims to have as many on the floor as possible, and buttresses their ranks with the buyers on busy weekends.

The wine areas employ wooden shelves that have been fit into metal industrial-style shelving, creating a hybrid effect that manages to connote a higher-end experience even as it makes no mistake about this being a store where values are to be found. ‘€œIt feels like a good-wine shop,’€ Fisch acknowledges, ‘€œbut a high-volume wine shop.’€ The metal shelving supports significant inventory on top.

The store boasts about 1,000 skus of French wines (including futures), 550 skus of Italian wines and 300 skus of other European wines. There are about 1,500 skus of American wines and 425 of New World wines. Sparkling wines are represented by 150 skus. There are some 300 skus of other wines, including sake and kosher wines. ‘€œYou may find a store with a better Burgundy selection or a better Bordeaux selection, but you won’€™t find a more comprehensive selection overall,’€ Fisch notes. The store flags as ‘€œDiscoveries’€ distinctive wines that it views as not adequately heralded by wine critics and reviewers.

The wine buyers juggle multiple assignments. Jon Visser is the buyer for French wines and also serves as the retailer’€™s Internet guru. Brian Maxwell is wine buyer for Italy, Spain, Germany, Portugal, California, Oregon and Washington and also manages the Madison store. Maggie Fox serves as buyer for the Wine Club and puts out its newsletter, while also handling exclusives and the elaborate private-label program, Southern Hemisphere wines, kosher wines, Eastern U.S. wines, Eastern European wines and sake.

In Fisch’€™s view, one of the chain’€™s strengths is its representation of California wines, particularly those of Napa Valley. Overall, California wines represent about 30-33% of total sales, he said. But his team also tries to ensure it has solid representation in virtually every category, from traditional Eastern European varietals to artisanal sake. ‘€œWhat we really try to do is make sure we’€™re buying the right wines from the right vintages in the right regions when they come along, and to do that you really have to have an ear to the ground at all times to anticipate the next great thing,’€ he said. ‘€œWe need to be among the first to realize that 2006 is a great vintage for Barolo and 2009 is a great vintage for Beaujolais,’€ he added by way of example.

In keeping with Fisch’€™s desire to serve all demographics, he had no reservations about creating a ‘€œbig bottle’€ aisle for jug-style and bag-in-box wines, denoted by signs proclaiming just that.

Fine Wine Room

At the other extreme is the fine wine room housed at the back of the store. It boasts an unusual feature in being completely windowed, avoiding the dungeon-like atmosphere of fine-wine rooms at other retailers, with the tradeoff of greatly reducing the available shelf space. On the principle of not signaling to his shoppers that he thinks they’€™re thieves, Fisch insisted that there not be a lock on the door, although the door remotely beeps when it’€™s opened. True, last May he lost a couple of bottles of 2006 Chateau Petrus Pomerol to a Hoboken resident who hid them in his sports jacket (and who a few months later was apprehended filching a Picasso sketch from a San Francisco gallery), but Fisch accepts that risk in the interest of cultivating Gary’€™s image as a welcoming environment. Among the prides of the fine wine room are the rarities Fisch snags each year at the Premiere Napa Valley auction, where for nine years he’€™s been the most aggressive buyer. (See sidebar.)

As with most retailers, Gary’€™s has a well-developed private-label program, but his offers some unique twists. ‘€œHonesty in private labeling,’€ is how he describes an approach that features wines under the name Go Figure (Gary Fisch’€™s initials, of course) that don’€™t disguise the provenance of the brands. That said, they way overdeliver ‘€“ say, with a sauvignon blanc dubbed Lot 12 (Nom de Plume is the DBA) that offers a $20 version of what would be a $70 experience direct from the vintner. (See sidebar.)

The store also carries an extensive selection of spirits, including rich inventories of single malt Scotch and single-barrel bourbon. But there is no fine-whisky room; as noted, rarities are stowed in the glass cabinet behind the wine info desk.

As craft beer has exploded in popularity, the store has stepped up its presence in that realm, with the weekly tastings and an expanding array of craft beers, high-end imports and other intriguing offerings. One feature that seems to work well in cultivating interest is the six-pack of the month, in which the buying staff assembles six different 12-oz bottles in a six-pack carrier carrying the Gary’€™s logo which can range from arcane micros to more crowd-pleasing brands. On the north wall of the store is a wall of refrigeration encompassing 27 doors, four of them devoted to wine and the rest to beer.

Toward the front of the store ‘€“ on the other side of the Tuscan villa from the entrance ‘€“ is a spacious gift area. All told, the store’€™s sales come out about 5% food, 13% spirits, 11% beer, and most of the rest wine, Fisch indicated.

Internet Growth

The rear, or eastern, wall of the store provides offices for staffers involved in marketing, Internet sales and the like, as well as ambient storage. The Internet is considered a big growth opportunity at Gary’€™s ‘€“ ‘€œwe consider it our fourth, and fastest-growing, store,’€ is how he put it. The company has worked hard to optimize its presence so that the store comes up right away to consumers searching on price or product, but it also gets its share of emails from bricks-and-mortar customers on some occasions. Fisch is high on that aspect of the business. ‘€œIt’€™s building community,’€ he says. As things stand now, it’€™s maybe 10% of the business.

Judging by Fisch’€™s interactions with staffers, from sales managers to young warehouse workers, it’€™s a jovial, close-knit group, though the distance of the Wayne store from the other pair meant that it had to be staffed entirely afresh. That means few of the Wayne staffers are veterans of more than three years with the company, and Fisch spends the majority of his time at the store. (Note: several of the wine buyers and administrative staff have been with the company for five years or more, but no one on the daily floor/wine staff.)

Given the stores’€™ reputation for friendly service, are there any secrets of hiring? ‘€œA smile helps,’€ Fisch replied. ‘€œIt’€™s just about positive energy.’€ While recruiting solid people is always a challenge, the weak economy has been a help, freeing up well-educated wine lovers forced or looking to make a change. At the time of Beverage Dynamics’€™ visit, the Wayne floor was staffed by two former Wall Streeters, one of them a 25-year veteran of a German bank who’€™d extensively visited Europe’€™s major wine-producing regions.

Coordinating Activities

To coordinate activities among the three stores, Fisch convenes team meetings of his three buyers ‘€“ Visser, Maxwell and Fox ‘€“ every other Thursday (except for the frantic November/December holiday period) and in the off-weeks holds leadership meetings of his 12 top executives at a local private dining club called the Park Avenue Club in nearby Florham Park. (The club this past fall became the new site of Gary’€™s biggest annual charitable fundraiser, the Grand Tasting, which offered about 525 wines, including 2009 Bordeaux and 2006 Brunello, and concluded with a cocktail tasting. It was the 20th annual installment of the popular event, which drew 400 guests.) Breakfast in a private room at the club offers an uninterrupted opportunity to sort out the complications that inevitable arise from managing three stores with more than 100 employees.

Buying decisions, Fisch notes, generally are made collectively across all three stores. Exceptions are made to accommodate a particular demographic requesting a wine in one store that isn’€™t calling for it in the other two. ‘€œWe allow for some variability between the three, so you may see a Spanish Moscato as a Top Ten wine in Wayne, while it takes a less prominent role in Bernardsville, for example,’€ Fisch said. (Bernardsville overall tends to be more geared toward French wines.) Fox noted that, despite the big size difference between Madison and Bernardsville, on the one hand, and Wayne on the other, they carry close to the same number of skus, although Wayne will take advantage of its greater presentation space by offer more facings or case stacks of some skus.

That’€™s what happens behind the scenes. But Fisch also has proved an adept public face of the company, numbering among his televised appearances 40 episodes of Bobby Flay’€™s Hot Off the Grill show. He also keeps the Gary’€™s Web site stocked with engaging interviews and tastings with visiting vintners, shot inside the store. Still, though on-screen he seems to be a natural, Fisch confides that it’€™s not a role he’€™s entirely comfortable with, even after all the exposure. ‘€œI prefer one-on-one or one-on-ten, but if I can have a conversation with you about your wine and videotape it, what’€™s the downside?’€ Still, such efforts cut into time that might be spent dealing with the myriad hands-on chores of running the chain, he said, and all for a return that is not always easy to scope out. On some TV appearances, he’€™s waited in the studio only to garner fewer than five seconds of face time. As for social media, ‘€œare they buying because of Twitter? I don’€™t know ‘€“ but we need to be involved.’€ Still, he concluded, the priorities are clear. ‘€œAt the end of the day, I’€™m running my business,’€ he said.

Honesty in Private Labeling

Gary ‘€™s does its share of conventional private-label wines, trusting on its reputation to assure customers that they will garner good value from direct-import wines sold under names that resemble those of regular branded wines. But the retailer goes a step further with a program it likes to call Honesty in Private Labeling. In this case, Gary’€™s goes to special lengths to let its customers know that ‘€œwe know the source ‘€“ we’€™re not just buying bulk juice and getting rid of it on unsuspecting customers,’€ said Maggie Fox, a wine buyer and director of the store’€™s Wine Club, who works closely on the private-label program with Gary Fisch. ‘€œWe know it’€™s good juice that happened not to have a home.’€

The program operates at three levels that each takes the tongue-in-cheek initials of the retailer’€™s owner for its label: Going Forward, Go Figure and Grand Finale.

The Going Forward label is a continuity brand sourced from an unidentified winery in California that offers samples to the Gary’€™s team that the partners work together to blend into a style of Chardonnay or Pinot Noir that offers consistency and over-delivers at its price point. They’€™re priced at under $20 but are intended to offer the flavor of branded wines running $10 more. That label sells over 1,000 cases each year.

Go Figure, the second level, is opportunistically purchased from well-regarded wineries that might find themselves with a surplus lot ranging anywhere from 40 to 900 cases. ‘€œThe opportunity presents itself and we make sure we over-deliver,’€ is how Fox puts it. Gary’€™s staff often tastes the wine at the site before committing, and the lot generally is bottled under a DBA to protect the winery’€™s brand. Typically, the store will carry a sauvignon blanc and two to three cabernets under the Go Figure brand, with the label of each indicating the lot number, vintage and grape. Gary’€™s regulars have come to know that the $40 bottle of Go Figure they’€™re purchasing would command $80 or more under its regular label, while a $20 bottle would command $35, Fox noted. The retailer moves more than 1,200 cases of Go Figure in a year.

The top tier, Grand Finale, was inspired by Fisch’€™s purchases of auction lots of Premiere Napa Valley wines (see other sidebar). ‘€œGary loves the idea of just one barrel (or less) being available,’€ Fox explained. These wines are presented as a partnership, with the vintner’€™s name placed on the front label ‘€“ ‘€œout in the open, as a special thank you to our best customers,’€ she said. ‘€œIt’€™s in short supply, but we also don’€™t charge an arm and a leg.’€

Premiere Napa Valley

Gary Fisch’€™s continuing quest to offer his customers wines they won’€™t find anywhere else has made him the top bidder for nine years running at the prestigious Premiere Napa Valley auction held each February. The draw of PNV: ‘€œ200 different wines, each unique,’€ Fisch said.

Put on by the Napa Valley Vintners, the three-hour live auction held at the Culinary Institute of America facility in St. Helena, CA, last February netted a record $2.4 million, up 23% from the 2010 take and pushing past the 2008 record by 6%, no mean feat given the still-troubled state of the economy.

For the fifth year in a row, Gary’€™s was top bidder. This past year, the retailer bested 67 other successful bidders, committing more than $500,000 to capture 300 cases from 32 producers, including Ovid, Duckhorn Vineyards, Robert Mondavi Winery and the chair’€™s lot from Honig Vineyards & Winery. Among the top 10 bidders, Gary’€™s was one of just two from east of the Mississippi, along with Metz Group of Dallas, PA.

The bounty is flagged on mounted barrelheads in Gary’€™s glassed-in wine room in Wayne, and to make the rarity of the wines even more unmistakable, this year the store moved the bottle number right onto the front label. On display during a recent visit, for instance, was a bottle from Auction 15, Lot 192, from the 2008 auction, a Caldwell Red Wine initialed by winemaker Marbue Marke and designated as bottle 59 of just 60. It was going for $160.

‘€œThis gives us opportunities to get things nobody else has,’€ Fisch said succinctly.

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