A Fun Business in Fun City
Afew decades ago, New York was called “Fun City” in the city’s promotional advertising campaign. For two different retail operations in the Greater New York Metro area, “fun” is still the operative word. This is the first in a series of retail profiles that pair two operations in the same metropolitan area.
David Braff and Mitchell Soodak, owners of Union Square Wines & Spirits in New York City, have the blues and they couldn’t be happier about it. “Blue chip to blue collar, blueblood to blue hair, we cater to everybody here,” explained Braff. “It’s New Yorkers in all their infinite variety and infinite is the way to say that because the clientele is wildly diverse. Sometimes when you do a tasting or special event, it’s amazing who’s sitting next to each other.”
With deep roots in New York City, partners Mitchell Soodak (left)
and David Braff have turned their love of the city and
old-fashioned philosophy of retailing into a modern day success.
The two partners have owned the popular shop in one of New York City’s most historic neighborhoods for close to eight years now, having bought the business from the original owners when it was two or three years old.
In the late nineteenth century Union Square was the culmination of the Ladies Mile, which paraded down Broadway and boasted the city’s most fashionable shops, much like Fifth Avenue today. Throughout the 1960s and ’70s, as people fled America’s major cities for more suburban lifestyles, the neighborhood became increasingly seedy with only the ornate architecture of many of the buildings giving a hint of the glory that had once been. Union Square Park, formerly the site of major political rallies, became nothing more than an illicit drug bazaar and only the unwary entered with innocent intent. With the economic boom of the late 1980s, the park was rebuilt, the drug dealers thrown out and a new stage of development began. Great restaurants opened and major retailers sought to cash in. Braff and Soodak saw the potential of the area and made their move.
Union Square Wines & Spirits is nestled in the heart of downtown Manhattan. Above: the store’s entrance is directly opposite the chalkboard. Below: a view of the front section of the store’s selling space, as seen from the loft/salon area.
“The store was undermanaged and underfinanced,” explained Soodak. “We saw a diamond in the rough that needed to be brought to its potential. It had all that stuff that I thought made for a win, win, win going down the road.”
“We loved the location and the layout,” added his partner.
To even the casual observer it’s obvious what Braff is talking about. Union Square sits at the intersection of three major thoroughfares–Broadway, Park Avenue and 14th Street–as well as housing a major subway hub beneath the park. The store looks like an old-fashioned shop with wooden shelving and floor racks stocked with a wide array of wines and spirits. There’s also an upstairs salon area with a balcony overlooking the selling floor that can be used for events such as wine classes and tastings or private parties. But as any good retailer knows, a good location and physical plant are just the beginning of what makes a successful business.
“We brought a philosophy that I thought was the future of this business,” explained Soodak, whose parents were retailers and who had his own first store at the age of 21. “It was not about cutting the price to close to cost and offering no service and just being a major discounter, which doesn’t require much work on the owner’s part.
“As a person who lives in Manhattan and has a family in Manhattan, I like to shop in places that make me feel comfortable, that give me service and charge a fair price. It’s that philosophy I think that makes New York a great place to be. There aren’t too many wine shops in New York; there are a lot of liquor stores. And wine shops, even good wine shops in New York don’t have the physical space that we have in a destination location.
“Since 9/11 it’s more difficult to get people to come to a destination and to come to events,” he added. “But it’s still working, and it’s a great philosophy and way for us to grow our business.”
Union Square Wines & Spirits has indeed become a destination point for wine lovers in the New York City area. The store holds regular tastings and other free events that are open to the public and generate a lot of traffic. In all, wine sales account for about 75% of the store’s total sales volume.
It’s Not Just A Store, It’s An Experience
“We like to try and do events at least once a week,” said Soodak. “There are weeks when we do multiples, but it averages out to about 50 events a year.”
Wine events at the store can be a sit-down tasting and lecture with the representative of a single winery for 50 to 60 invited guests or a much larger event with a number of suppliers with 25 or more different wines available for customers to sample on a Saturday afternoon. The partners consider such events to be one of the services they offer as merchants. While there is no charge for tastings, for sit-down events, the store requires a $20 reservation fee, refundable upon attendance. Usually they sell out within minutes of being announced via e-mail.
As Union Square Wines & Spirits director of special events, Tim Eustis coordinates everything from “mega-tastings” with dozens of wines to surprise birthday parties in the store’s Salon space.
Responsibility for the logistics required for all this activity falls to Tim Eustis, director of special events. “The salon space offers a rich opportunity to do lots of things,” he said. “We like to do what we call mega-tastings, which are open to the public. For example, we might do a Loire tasting and bring in a number of distributors who will focus on certain wines in their portfolios, and we’ll pour 20 to 60 wines. It gets pretty crowded, but people get an opportunity to sample wines they don’t normally see.
“Another element of what we do is the private tastings,” Eustis continued. “For example, if an investment bank wants to celebrate a big deal or an alumni club wants to have a gathering, they can do it here.”
Eustis explained that the store has arrangements with a number of restaurants, including the Heartland Brewery next door, and a caterer to provide whatever food might be required.
Living In The Electronic Age
The store currently has a database of about 11,000 e-mail addresses, which makes for cost-effective and highly targeted promotional efforts. Other tools in the marketing arsenal include traditional advertising on news and classical radio stations and in The New York Times. There’s also a website but the partners view it more as an informational than a sales vehicle. They admit to doing some Internet business, but don’t see it ever becoming a major part of their business. “I still think that with food and wine people want a hands-on experience,” noted Soodak. “They want to squeeze their grapefruit; they want to see their bottle of wine. Usually when you’re shopping on the Internet, you’re looking for the best price.”
“The website is useful for people to see our inventory and to let them know we have certain things that other stores don’t,” added Braff.
People Who Need People
Like any successful retail operation, the thing that makes Union Square Wines & Spirits really work is the people. It starts with the partners whose strengths effectively complement each other. Mitchell Soodak lives and breathes the business and takes on the role of “bad cop” on occasions when that’s called for. “I’ve been in the business all my life. The old-fashioned way was to buy a year’s supply and turn your inventory once a year,” he explained. “My expertise is not wine. My expertise is numbers and for me a beautiful thing is turning inventory six, ten times a year. What turns me on is working with numbers.”
Katherine Moore has been Union Square’s general manager since 1997, and like the rest of the staff she has a deep and abiding love of wine. On the store’s website she’s quoted as saying, “It’s all about matching people with the right wine.”
And the numbers on the business are impressive. There are more than 4,000 wine and spirit SKUs and an inventory with a cost of more than $1 million at any given time. There’s about 3,000 square feet of selling space and another 1,000 in the loft/salon.
“Dave is more the human resources, the marketing, the creativity,” Soodak added of his partner in explanation of their different roles.
But no business of this magnitude would make it solely due to the efforts of the owners. “We do a lot of service,” said Braff. “And in order to manage that properly you need a dedicated team. Our staff is wildly diverse in terms of age, orientation, cultural background and what they’ve learned and know.”
“We hire people that are knowledgeable and require them to increase their knowledge while they’re here,” added Soodak. “For example one of our staff members is in Europe now with a supplier. Instead of ownership taking the trip with a supplier, it’s important to send the staff.
Braff explained that sales staff don’t work on commission because, “We don’t want salespeople fighting over customers. We want them serving customers.” Instead, team selling is encouraged — a staffer who is very knowledgeable about California wine might hand off the customer to someone else when the subject switched to sake or Bordeaux.
The partners also expect the idea of teamwork to extend to the wineries and distributors that they do business with. “We look for suppliers who will help us build a franchise in a number of ways,” said Braff.
“We don’t want them to just sell us the bottle. We want them to be available for tastings; we want them to offer support for their products and to partner up with us in that way,” commented Soodak.
It’s All About The Wine
An important member of the store’s team is wine director Jesse Salazar, a California native who began his wine career in the restaurant business. “As far as selection goes, we try to have a little bit of everything, but the most exciting area for consumers right now I think reflects a price that’s $25 and below, no matter what it is.”
As has traditionally been the case with East Coast merchants, Union Square has a heavy concentration of European wines. “The biggest area of wine concentration, in terms of inventory, is French and Italian. We have about 200 facings of Italian wine, not counting special stuff locked away upstairs or in the basement.”
Like most wine professionals, he is always on the lookout for new wine discoveries and thinks there are still plenty of undiscovered gems in Europe.
Wine director Jesse Salazar stands before some of the stores many wine treasures.
“There are a lot of really hot spots there, like the Languedoc in France. Some of those smaller appellations are really fun, and you’ll find them at some of the cooler restaurants. I think that Spain is still undiscovered with regions like Priorato. You’re finding great winemakers making just beautiful, brilliant wines in those little appellations. You find them for less than $50 on the shelf, and they’re basically blowing away the competition in terms of things coming out of California.
“Obviously Australia’s very hot, but you have to pick through the swill. They’ve got a great amount of really good wine, and they have a huge amount of really lame wine. People love Australian shiraz.
“We like turning people on to things,” Salazar continued. “We’ve always been the rock & roll wine store. You see a lot of young faces on the floor, but we’re all fairly well informed and up on the current trends. The people here know what’s tasty, what’s not tasty.”
“The business is a constant series of challenges,” noted Soodak. “You’re always asking, ‘What’s the next new thing that we can think of?'”
“It’s an ongoing thing,” echoed Braff. “You’ve got to be able to re-create it all the time. As hard as you work on a given day, you better be thinking about tomorrow and the day after.”
“The retail industry has gone through so many changes,” continued Soodak. “The theory over the last 15 years has been, if you want to sell more, lower your prices. I think that’s a formula destined for failure for everybody. I think that the people who created that formula are dinosaurs in the industry now. The next generation is not going to want to come in and buy something for $100 to sell it for $102. Anybody can sell it for cost.
“That’s a commodity business,” said Braff picking up the thread. “You can move mass goods, but when you take an internationally known $20 item and sell it for $12 you’re going to get a bunch of people to come, but will they come again? And will they buy anything else when they come in for that item?
“A lot of producers realize that steep discounting of their product is destroying their franchise. If you’re conveying elegance and the quality of your vineyards and your winemaker and the care that goes in, but it’s a $6.99 bottle, people are not going to believe it.”
“We don’t want to be a run-of-the-mill wine shop,” noted Soodak, who said they’re trying to take the old-fashioned idea of what a merchant is and update that for the 21st Century.
“We’re not just selling goods, although that is the core of the business,” said his partner. “We’re in the entertainment business on the level that fine food and drink is what you share with family and friends and business associates. If you want to enrich your life, you’re going to put a good bottle on the table with good food and they’re going to match.
“It’s a fun business,” Braff added in summation and that pretty much says it all. *
“We have the best tasting neighborhood in the city,” says Union Square Wines & Spirits co-owner David Braff. “There are just fabulous restaurants. Of Zagat’s top 20 you can hit about 10 of them with a rock from here.”
The Zagat Survey of New York City Restaurants was the inspiration for one of the store’s recent marketing tools. Braff and partner Mitchell Soodak had a special run of the 2004 Zagat Survey printed with their own cover and the store’s name and phone number printed on the spine. Just putting their name on the book and giving it away to customers would be enough for most retailers, but that just wasn’t going to be enough for these guys.
They also had staff members — Tim Eustis, Jesse Salazar, Bill Burke and Alexis Beltrami — put together a 30-page lead-in to the restaurant reviews. Mimicking the style of the restaurant guide, this special wine/dine section gave a brief description of major wine types, from albarino to chardonnay to sangiovese to zinfandel. An expected price range and the types of food the wine best matches with are also included