Store Chain Spotlight: A budding empire that’s no laughing matter

(Note: This story appears in the October 2021 issue of Storerotica Magazine)

A midnight epiphany saw Tim Serino of GigglesWorld go from painting contractor and musician to adult retail impresario.

It was 1997. Tim Serino was a 25-year-old musician in upstate New York, playing in three separate bands and working as a painting contractor with a newborn son. Serino was growing weary of the frequent daily commute necessary to get work in New York City. He had an epiphany in the middle of one night to open an adult store. He named it Giggles, after his ex-wife’s nickname.

The next day, Serino stumbled on an available 680-square-foot location. Surprisingly, the Village of Wappingers Falls, New York allowed him to open. Serino knew nothing about adult zoning. In hindsight, he realized that if the Village had denied him, he probably wouldn’t have gone further, and GigglesWorld, three adult stores, an online store, a distributorship, product lines, and an adult nightclub would never exist today.

SE: Tell me about your first store, which started at 680 square feet?
SERINO: After opening in 1997, I expanded that location four times over the next four years, slowly taking over the entire small strip mall. That store was kicking ass, within two years doing triple the revenues of my contracting business. Then one night in July 2003, the landlord accidentally started a fire that destroyed most of the building, including my store. I’d started Giggles with only $3,000 in product, and by that time, my inventory had grown to almost $500,000, almost all lost to the fire.

Fortunately, I’d just rented space in an oversized nearby garage and moved our internet operation from the store. So, we were able to continue shipping from this no-heat, no-bathroom, no-AC garage while we regrouped from the fire.

Within two months after the fire, I’d signed two new leases for what are still our Carmel and Hyde Park, New York locations. I built and opened both new stores by the end of 2003. The town of Hyde Park allowed me to open but restricted the sale of any adult product. I knew, with their current zoning, they couldn’t deny me legally. So, while dealing with them month-to-month, I had the opportunity to lease a prime location in Wappinger Falls. They, too, denied us a permit. I decided to fight. A mutual friend introduced me to Tampa attorney Luke Lirot, who helped me fight on both counts and with whom I’ve worked with ever since. We had the same judge in both cases. By December, the judge granted permission to open Wappinger Falls and sell adult in Hyde Park. We opened Wappinger Falls in January.

“We stay relevant by having the best product available, both online and especially in our brick-and-mortar locations. What’s important to me is giving people value for what they pay. I want people leaving with full bags of products, believing they got a deal.” — Tim Serino

SE: Back then, were legal expenses a large part of your operational budget?
SERINO: Yes. I had to maintain for almost a year with approximately $30,000 monthly in legal fees. It was tough, but our online sales were strong, my wife and I weren’t frivolous, and we could sustain it. We brought Ron Jeremy and Tara Patrick for our first signing. Three thousand people showed up. After opening Wappinger Falls that January, by October, we were 100% paid up.

SE: You have three Giggles stores and five Happy Habits locations. When did you get into the vape-and-tobacco business?
SERINO: In the early 2000s, we had tobacco accessory sections of our Giggles stores before vape even existed. We carried it through the transfer from metal to glass pipes. When vaporizing products started in 2008-2009, manufacturer friends sent me prototype samples. They would blow up or catch on fire. In 2010, we moved to our 30,000-square-foot warehouse and offices and built an 800-square-foot smoke shop called Giggles Glass and Gifts in the building. It was my concept store that eventually led me to open the Happy Habits stores in 2014. Within three years, I’d opened five Happy Habits locations.

SE: When did the growth move beyond a few stores to what you’d consider a chain? Did your buying power increase then?
SERINO: It wasn’t just the stores. My buying power started in the early 2000s. In 1999, I partnered with an IT programmer who helped develop the first online shopping carts. We also developed the first wholesale ordering system in 2002 called adult-wholesale.com and the storefront system adultstoresales.com. At its peak, we had over 10,000 affiliate stores. With few big manufacturers and none online yet, merchandise was hard to come by. I learned, early on, this industry is wide at the bottom but very narrow at the top. My wife and I were welcomed with open arms by old-timers like Marty and Penny (Mazza) from Video Wholesalers and Bob (Pyne Sr.) from Williams Trading Co. We were the new generation, coming in, kicking ass. From 2002 on, we bought so much product, our internet presence alone probably equaled 10-15 old-school brick-and-mortar stores; it was cranking.

Giggles started operating as a chain early on with policies, procedures, handbooks, and training; then, we transferred it to Happy Habits. Our stores are all strategically placed within 20 to 30 miles of home base. I never wanted to go further without franchising. We spent a fortune developing a franchise model, but 2008 happened, and we were forced to shelve it just as we were about to implement it.

The downfall to growth is that now people look at us as a big chain and try to take advantage. We’ve had a few of those issues, including two separate customers whose legs got burned by vape batteries. We proved they weren’t even bought from us. They probably bought online; then came after us when they hurt themselves due to improper usage. In going from small boutiques to a chain, there’s now a target on our back. Although we’re perceived as a huge company, we really aren’t. There’s a core group of people here that help keep all these plates spinning.

SE: Has having more stores helped you with branding?
SERINO: Yes, one brick-and-mortar can only make so much, especially in today’s retail landscape. This year, we’ve added three lines of products. Our newest, Pink Vibes, is doing great. What better way to launch products out the cannon than in your own stores and wholesale website? And rubbing elbows with the big guys gives us more respect.

SE: In an age of apps and mobile everything, how is GigglesWorld staying ahead of, or on pace with, the technology curve as it relates to customers?
SERINO: We’ve been selling online since 1999. At one point, our IT department numbered 13-14 people. I’ve scaled back our online presence because online retail is an ugly landscape right now. We stay relevant by having the best product available, both online and especially in our brick-and-mortar locations. What’s important to me is giving people value for what they pay. I want people leaving with full bags of products, believing they got a deal.

SE: What do you consider the greatest existential threat to adult retail today?
SERINO: Sellers pricing things online for $1 over wholesale. They’re devaluing everybody’s products. There needs to be a little more enforcement online to keep the value of novelties where it should be. That’s probably the most challenging part for brick-and-mortar stores, people comparing prices to Amazon. At one point, we were doing 1,000-plus Amazon orders a day ourselves; but it wasn’t worth it. I say all the time that we are all on the floor picking up nickels.

Counterfeiting is a big problem too, and patent and trademark infringement. So we are constantly having to go after people infringing on our trademarks.

SE: What’s on the horizon for GigglesWorld?
SERINO: Right now, we’re planning upcoming major renovations for the Giggles locations. That’s taking a ton of preparation. Also, our huge launch of the new styles of the Pink Vibes line and additional work on our adult nightclub, Smiles. Despite the pandemic, we are doing better than ever right now. Go figure!

Larry Kaplan has been the Legal Correspondent for ED Publications for 21 years. Mr. Kaplan is a broker in the sale and purchase of adult retail stores and adult nightclubs and the Executive Director of the ACE of Michigan adult nightclub state trade association. Contact Larry Kaplan at 313-815-3311 or e-mail larry@kaplanstoresales.com.