SE Legal Correspondent Larry Kaplan sits down with Passions Boutique founder, Eugene Gruender.
(Note: This article appears in the February issue of SE Magazine.)
Some adult retail chains are built on carefully crafted business plans and years of market analysis. Others are born out of circumstance, instinct and a willingness to take risks most people wouldn’t consider. Passions Boutiques falls squarely into the latter category.
Founded 25 years ago by Eugene Gruender, a former computer designer with multiple patents, and his son James, Passions began not as a grand retail vision, but as a solution to a very personal problem: how to build a sustainable life outside traditional employment. Alongside his wife, a registered nurse and Director of Emergency Rooms, Eugene Gruender spent years sailing the Caribbean, returning periodically to the workforce before realizing that a different path was needed.
That path came through an unexpected doorway: adult retail. At a time when most adult stores were dark, intimidating spaces catering almost exclusively to men, Gruender saw an untapped market: women and couples who wanted quality products in an environment that felt safe, clean and approachable. The result was Passions Boutiques, a chain that has survived economic downturns, shifting consumer habits and industry upheaval by staying true to a simple philosophy: create an inviting space, train employees well and never underestimate the customer.
StorErotica Legal Correspondent Larry Kaplan spoke with Gruender about the unlikely origins of Passions, the risks that shaped its growth and why customer comfort remains the cornerstone of the business.
SE: Your son, Jimmy, who runs day-to-day operations for the stores, gave me a brief overview of how you got started. You had been sailing for a year when he contacted you. Can you tell that story from your perspective?
Gruender: I was a computer designer for Motorola, I had a bunch of patents. And my wife was a registered nurse who ran emergency rooms. We decided to take off on our sailboat for a while. We went sailing, ran out of money, came back, went to work again and then repeated the cycle. On the way back from one of those trips, my wife said, “We need to find something outside the box where we don’t have to come back begging for jobs.” At the time, Jimmy was working at an adult store and trying to convince me to set him up in one. The more he explained how it worked, the more I thought, this might actually work.
So, we opened the first store in Boonville. The funny part is that when we came back from sailing for a year in the Caribbean, we were broke. I had several credit cards with high limits, so we opened the store on credit. With interest-free balance transfers between accounts, we were able to keep things moving long enough to get established.
SE: So Passions began as a personal, family-driven idea. What made you believe it could become a sustainable business?
Gruender: You just had to look at the numbers. If you ran a good business and watched the pennies, you could make money. Back then, I believed there was a huge untapped market of middle-aged women who wouldn’t go into most adult stores, but who absolutely wanted the products. If you operated a clean, well-lit, well-run store, you could reach that market. And it turned out I was right.
“ECN has been great about sending suppliers to train our employees several times a year and we sold more of their product because our staff understood it better. What surprises me is how few stores leverage that.”
— Eugene Gruender
SE: You were clearly ahead of your time. Twenty-five years ago, adult retail had a very different image. Most people thought adult customers were just dirty old men in trench coats and truck drivers.
Gruender: Correct, customers would come into our store and say, “Wow, this is nice.” They’d tell their friends, and they would come in. That’s how it spread.
SE: What did you do from the beginning to make the stores feel different?
Gruender: We focused on making them clean, well-lit and inviting, with well-groomed, well-trained employees who were easy to talk to. That alone set us apart.
SE: Training remains a challenge for many stores. Was it harder to train staff back then?
Gruender: Absolutely. For a long time, we had to do everything ourselves. It’s only been in the last 10 to 12 years that external training has become available. ECN has been great about sending suppliers to train our employees several times a year. We’d bring in temporary staff to run the stores while we trained everyone. They didn’t charge us; we sold more of their product because our staff understood it better. What surprises me is how few stores leverage that. If experts are willing to come in and train your people, why wouldn’t you do it?
SE: Each Passions location has followed a slightly different path. How do you decide when and where to expand?
Gruender: There’s no master plan. It’s more about what makes sense at the time. We had the Boonville store, and I wasn’t planning on opening another one. My manager said, “There’s an empty building in Colombia, you should look at it.” I went to see it, and, unlike most landlords at the time, they were happy to rent to us. About an hour later, I was opening another store.
SE: What lessons from that first Boonville store still guide how you run Passions today?
Gruender: The idea of being inviting and non-threatening never changes. During the 2008–2009 downturn, our sales dropped to about one-third of their prior level almost overnight. Many businesses didn’t survive that. Along a 50-mile stretch of highway, there were about eight competing stores. Most of them are gone now.
Their reaction was to stop buying inventory. We did just the opposite: stocked the store to the gills. If someone walked in, we wanted them to find something they liked. It was risky, but it worked. We’re still here.
SE: Jimmy describes Passions as a safe, welcoming space, no matter what your kink. How does that play out across different markets?
Gruender: Boonville is a highway store in a small town. Much of our business comes from travelers, and we’ve built a database of customers from coast-to-coast who stop in whenever they pass through.
The Columbia store is more local. We do get some interstate traffic, but our reputation in town is what really drives business. People stop in every week on their way home from work. Columbia is a college town, so we get a lot of younger customers—some come in groups, some alone. No matter who they are, the goal is that they feel comfortable walking through the door and confident coming back.
SE: You’re also known for some creative merchandising ideas.
Gruender: Years ago, when the government announced a stimulus package, I thought we could have stimulus packages too. I threw a bunch of products into a paper bag, labeled it “Stimulus Bag” for $9.95, and put it out. My wife thought it was a terrible idea. We’ve sold about 30,000 of them.
People love the mystery. They’ll buy one, open it in the car, then come back in for another. Sometimes they’re standing at the register trying to decide which mystery bag they want, even though they don’t know what’s in either one.
SE: How do you stay competitive with online retailers while remaining profitable?
Gruender: My son Jimmy handles most of that. We try to stay priced where customers expect us to be. Right now, the biggest challenge is supply; tariffs have made it harder for suppliers to bring in product.
SE: What do you think most adult stores still get wrong?
Gruender: Customers tell us all the time that our stores feel open and welcoming compared to others. We also eliminated booths years ago because they didn’t align with the atmosphere we wanted to create.
SE: That has a significant impact on who walks through the door.
Gruender: It does. About half of our customers are women. It’s not unusual to see a grandmother shopping with her granddaughter. That tells you a lot about how comfortable people feel.
SE: What do you hope customers feel after their very first visit to a Passions Boutique?
Gruender: That they’re glad they found a place that feels safe.
Larry Kaplan is a broker specializing in the sale and purchase of adult retail stores and adult nightclubs, and the Executive Director of ACE of Michigan, the state trade association for adult nightclubs. For 25 years, Mr. Kaplan has been the Legal Correspondent for ED Publications. Contact Larry Kaplan at 313-815-3311 or email larry@kaplanstoresales.com.
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