Store Chain Spotlight: It takes a village to keep the cogs in sync

SE: You take a non-traditional approach to overseeing your stores with your executive team working on everything as a group. Tell me why you chose that approach and how it benefits you.

KAMINS: I surround myself with smart people with great ideas. Nobody is new here. Most store management has been around for 5-10 years. For regional management,
it’s 15-20 years. Our most important asset is the communication between stores and corporate. Without that, you miss a lot. Jill does a lot of buying, but I don’t call her the buyer because that would pigeonhole her. Jill and Debi are very crafty. They’ll remodel an entire store — something buyers wouldn’t do. Debi buys lingerie and also does social media. She’s very in-tune to what’s going on in our stores. Everybody at corporate has tasks related to the stores. Otherwise, they’d miss out.

We’re here early and all day, always trying to figure out how to do it better. I think it will always be like this because it’s in our blood. The only way to get better is to figure out what you’re doing wrong. It’s like a puzzle.

SE: Thomas Edison said, “Genius is one percent inspiration and 99 percent perspiration.”

YOSKEY: The success on the retail side is also our success, in more ways than one. I’m always planning and setting monthly and yearly goals. Whatever we have to do to achieve that success, make things better, and move forward.

KAMINS: It takes a village. All the cogs must be in sync. Without everybody here doing their part, we don’t get everything to the stores; they can’t do the training. We have very open communication with emails and people replying. We are always talking to everybody, whether it’s wishing everybody happy holidays, something silly, or whatever. That open communication helps this company, probably more than I can tell you.

I feel that as devastating as the COVID closures were, this company has come back even stronger than before. We have a lot of good things going on right now. And ultimately, that shows in retail sales.

SE: What are your biggest challenges in running the company today?

KAMINS: In the last six months, we’ve had issues getting product, but it’s getting better. Thankfully, we make our own stuff, so we have that inventory. But distributors and manufacturers were having trouble filling orders.

Hiring help today is also a huge challenge, no matter what we pay. I haven’t resumed our pre-COVID store hours because I wouldn’t be able to staff them, and I’m not sure I ever will.

And we’re still having problems getting new locations. Simply opening a store with no arcade — just toys, lube, and lingerie is almost as hard as a full-blown DVD store. We use the brand name adultmart. We also use the brand name Room801, with the tagline “Where Sexy Comes To Play.” Any new store we open now is opening as a Room801. The biggest mistake I ever made was calling the stores adultmart.

SE: Unlike other stores, you’ve developed your own product line. How do your products do in sales?

ARSTONE: Explorotica is the best-selling line in our stores. We make toys, liquids, enhancers, and candles. We make 200-plus products, and our 150 top-selling SKUs are Explorotica. That shows how the business has changed. We’re not the only company to private label. You control your inventory, and Amazon isn’t undercutting you.

SE: Does that success with your Explorotica products speak to your salespeople’s relationships with the customers? That they’ll trust their recommendations to buy your brand over name brands?

KAMINS: It does. But we don’t sell products our sales associates haven’t tried. We send samples, and if they disapprove, we don’t make it. They’re on the front line; they must be part of the process. We encourage them to help name products, too — that way, they feel ownership. They come up with ideas often.

SE: They can take pride in everything that your name is on.

YOSKEY: Exactly. And that’s something that wasn’t happening before, even 10 years ago.

SE: How do you choose vendors?

YOSKEY: Many times, it has to do with personal relationships. Do they want to be part of your team or just take an order and move on to the next?

KAMINS: We’re looking for somebody amenable to taking risks with us. We need partners, not salespersons. So we veer towards people willing to provide testers and do trainings. We’re about relationships. We still do business with a handshake.

“We’re not doctors, but we have suggestions. And that’s the best part of what we do. Besides making fantasies come true, we help people. My staff emails me regularly about connections they’ve made. I’m not in the stores often, but it’s a feel-good for everybody when I can share positive emails with the entire company.” — Rondee Kamins

SE: With so much product coming out, how do you sift through everything to ensure that you’re achieving your ROI?

KAMINS: We’re always looking to private label first. Can we sell it to our own stores? Is it something they’ve been requesting? We’re not interested in a seven-inch straight vibe because we don’t need it, no matter what you’ve done to it. Now, if you have a five-and-a-half-inch vibe that’s curved that our stores have asked about, we’ll look at it.

SE: What are your biggest pet peeves when buying product?

KAMINS: When we buy something for the stores under the manufacturer’s label then find it on Amazon. We quickly discontinue that item and never carry it again.

YOSKEY: I hate picking something up because the vendor said you’re missing the boat if you don’t buy this. Then we order it, and it’s on backorder. Why have me order it if you can’t fulfill it?

ARSTONE: It annoys me when somebody says they’re presenting a new item, then explains that chains X, Y, and Z are doing great with it. Is that their pitch? Buy it because 10 stores already have it?

KAMINS: Today, one person represents 15 different companies and doesn’t know anything about anything. Don’t bother even sending them out; my staff will chew them up and spit them out.

SE: What’s the strongest trend in adult retail currently?

KAMINS: Knowledge. The more we train our people, the better served we are. People have internet; they research everything. They want honest, clear answers to their questions. For a brick-and-mortar retailer to succeed, you must provide something value-added to motivate customers to come into your store instead of ordering on Amazon. The knowledge and training our staff takes very seriously sets us apart and is why we survive.

YOSKEY: When Jill and I visit stores, the staff’s knowledge is amazing to me; it’s outstanding. I have different knowledge; I don’t have that selling ability and product knowledge.

SE: You mentioned supply chain issues. You have longer-term distributor relationships than most because of your longevity in the industry. Have your distributor relationships been tested during COVID?

KAMINS: They have, and only two distributors were prepared. Part of our original reason for private labeling was to control inventory and avoid backorders. The first item we private branded was toy cleaner because it’s a no-brainer. We brought 50,000 bottles into the building, and we never run out. We quickly added a vibrator.

Now, if I see something that isn’t from these two vendors who can ship everything, we just private label it. We own our top pieces. We’re stocked for a few months.

SE: Has inflation forced you to raise prices? If so, by how much?

KAMINS: Whenever manufacturers raise prices, we follow. 2021 was quite a chaotic year. Some manufacturers raised prices multiple times last year. I believe products like silicone lube will be priced right out. With markup, you’ll be paying $40 for a four-ounce silicone lube. But, of course, the customers won’t pay it, so they’ll either make the bottles smaller or you find a different way.

I hate picking something up because the vendor said you’re missing the boat if you don’t buy this. Then we order it, and it’s on backorder. Why have me order it if you can’t fulfill it? — Debi Yoskey

SE: What about toys and soft goods? Have they gone up as much?

KAMINS: A few manufacturers did multiple price changes last year, but nothing too crazy. I feel the door has been opened — 2022 will be a crazy price-changing year.

SE: What do you look for when hiring new sales associates for your stores, assuming you can find people today?

KAMINS: The only thing we look for is outgoing personalities. We really live by the word, we can train the product, but we can’t train the personality. You either have one or you don’t.

SE: What do you consider the greatest existential threats to adult retail today?

KAMINS: The ability to buy a vibrator at CVS — they may not call it a vibratory, but that’s what it is. Goop, Nordstrom, Bloomingdale’s, and all these mainstream luxury brands stores are carrying toys now.

Another threat is manufacturers selling directly to retailers. We’ve lost more customers to manufacturers than to other distributors. It’s pathetic and sickening. We can’t play that game; we can’t match that price. My father would have gone after these manufacturers for selling to stores direct. We spent $250,000 for legal fees to keep the stores and manufacturers alive; we need to make those sales. When STOREROTICA sends out the survey asking how distributors could do better, what if manufacturers supported distributors and didn’t sell direct to retailers?

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 email larry@kaplanstoresales.com.