Charlie Chanaratsopon deals with “candy” but does not have a chocolate factory. His Charming Charlie stores do not sell sweets, but rather sweet-looking accessories in all sizes, shapes, cuts, and colors. “It’s a candy store for women,” he told Business World when he visited the country on July 12.
He is the founder and CEO of the accessory store Charming Charlie, which Forbes magazine said made $550 million in sales in 2015. Mr. Charlie Chanaratsopon was included in Forbes’s list of “America’s Richest Entrepreneurs under 40” that year.
He was born in the USA after his family migrated there from Thailand in 1974. The family went on to found a sterling silver jewelry business. “I grew up in a business-oriented family. I love business. Period.”
The former real estate analyst was not really planning to be a fashion mogul. “I have more of a finance background. So I built a shopping center and the idea is to put more stores in it,” he said.
His first accessory shop, with pink doors, mirrored shelves, and gilded interiors, opened in Houston, Texas in 2014, and was meant simply to fill up space in the shopping mall he was building.
“Charming Charlie became popular really fast. So we flipped. We focused on it, and said, ‘Okay, let’s be the best fashion jewelry store we can be.’ In 2007, I stopped building malls.”
Now there are more than 370 Charming Charlie stores in the US, and branches in Canada, the Middle East, and the Philippines where a store has opened at Central Square in Bonifacio Global City, Taguig. This year, a second branch will open at Glorietta 2 in Makati.
“The overall thesis was, here’s an idea that can make a lot of money. At that time, I saw a few local players doing well in warehousing fashion jewelry,” he added.
“It was spontaneous, and so, here we are.”
He remembered one of his first problems was christening the store with a catchy name. “I was torn among many suggestions but three names stuck with me the most because they were pretty bad,” he said while laughing — “Accessory City,” “Accessory Buffet,” and “Funky Monkey.” The a-ha moment came when someone said “Charming Charlie.”
The accessory brand projects itself as a “candy store for women — except they are fashion items,” he said.
Charming Charlie sets itself apart from similar stores by arranging its broad assortment of products — fashion jewelry, handbags, scarves, etc. — by color, 26 to be exact. There are the basic colors and there are other shades like “French roast,” “light sea foam,” “adobe,” and “pool blue.” The Philippine store offers more basic color choices in black, white, gold, and rose gold. But there are also a few bags and bangles, watches and wallets in red, yellow, and blue. The price range is competitive: starting at P250, nothing costs more than P2,500.
ACCESSORIES OVER APPAREL
But if given a chance to fill up the shopping mall empire he was originally building, would he stick with an accessory shop or choose another business venture?
“I do not like apparel,” he said bluntly.
Clothing items, he said, are hard to market because competition is tough. There are established fast fashion brands he would have to compete against like Zara, Mango, Forever 21, and H&M. The business of clothes, he said, is also deflating.
“In the last 20 years, it has deflated. The cost has gone down one or two percent a year, while everything, meanwhile, has inflated.”
“But I like accessories,” said Mr. Chanaratsopon, who was wearing a white button-down polo shirt and blue houndstooth blazer. An oversized watch was peeking from under his sleeve.
He said he likes accessories in a sense that they do not come in sizes, which makes the business easier to manage. Also, they have “better margins and fewer competition.” Plus, his experience with the family business in jewelry also helped him navigate the ins and outs of fashion accessories.
Like any other startups, Charming Charlie started at the bottom, relying on word of the mouth. “There was no Facebook yet,” he said. But there were cellular phones.
“I’d sit at the stores and see how women shop,” he said. He noticed that whenever women saw something they fancied, they would immediately get on their phones to call their girl friends to herald the good news: “I saw a watch I am totally crushing on.” Or, “I found a necklace that would upgrade my look.”
Through customer analytics, he learned women want to shop by colors, so he arranged the stores by color. And since then, Charming Charlie has been known as the “color store.”
If there are things Mr. Charlie Chanaratsopon has learned as a businessman, he said listening is always important. “Be customer-centric,” he said. He also added that it pays to think out of the box and always be inquisitive and ready.
“There are challenges every day. When we started in the US, we didn’t have direct competition. The first few years [were spent] learning the playbook, meaning, make the big mistakes early when there’s fewer stores. If there are big things coming down the road, I tell the senior staff — whom I call the ‘binoculars’ — ‘Hey, you got to see the big bumps coming.’ When you’re smaller, you can turn quickly when there’s a big bump, but when you have so many stores, the bumps hit you a lot harder. So we wanted to get the big bumps out [of the way] during the first three years before we grew. Then we opened very fast after that.”
In 2010, Ernst and Young named him the Entrepreneur of the Year in the retail category. In 2013, Forbes magazine featured him as among the ones to watch for. While his business was still at its infancy, he decided to pursue an MBA at the Columbia Business School which he finished in 2007. But the businessman is not content to rest on his laurels. “Every day is a learning process,” he said.
After 12 years, he has no plans of slowing down. He said he’s opening a store in Mexico next year. He also said that Asia is an important market. He is eyeing expansion in China and Hong Kong soon. What about Thailand, BusinessWorld asked. Eventually, he said, smiling.
As brands get bigger and the competition gets tougher, businesses should learn how to heed the signs of the times by tapping into the powers of technology.
“Now we cannot rely on the word of mouth alone. The brand has to be aggressive,” he said.
Charming Charlie, and the rest of today’s brands, he said, are tapping “online influencers” because: “bloggers have millions of followers, they are relevant, and authentic. Their posts go viral very fast.
“You know what? Celebrities do not move the needles anymore. We want to market with real people,” he said. — Nickky Faustine P. de Guzman