Hilo Hattie East

A top Hawaii retailer finds success on the mainland.

September, 2001

Hilo Hattie may bill itself as “The Store of Hawaii,” but its reach extends far beyond the Aloha State. For people who can’t come to Hawaii, the reasoning goes, why not bring Hawaii to them?

“That’s our view of what we’re trying to accomplish,” says Paul deVille, Hilo Hattie’s chief executive officer. “We’re marketing Hawaii and the Island lifestyle.”

Hilo Hattie, a division of Pomare Ltd., has four stores on the mainland: a 20,000-square-foot store in Anaheim, Calif., (opened November 1998); a 23,000-square-foot complex in Tempe, Ariz., (November 2000); a 10,000-square-foot shop in Nashville, Tenn., (May 2000); and a 20,000-square-foot outlet in Miami, Fla., (March 2001).

The numbers add up to exciting times for the longtime Island retailer, which also operates seven Hawaii stores. The company is projecting just under $100 million in sales for 2001. Last year, company revenues totaled $90 million, up 23 percent from 1999. The increasing popularity of Hawaii-themed products on the mainland has been a major plus. “Timing is on our side,” says company President Darrell Metzger. “Hawaiian tropical wear is very popular now. Even in Miami, where you would think Caribbean wear would be (at the top), it still ranks below the Hawaiian wear.”

Several criteria are used to determine new store locations, including hospitable climates, retail space (“Ideally, we’d like at least 20,000 square feet,” says Metzger) and, of course, revenue potential. “We wouldn’t open a store unless we thought it was going to do at least $5 million in sales every year,” Metzger says. “Right now, each of the four existing stores is kind of ‘stand alone,’ spread across the country. And that was done partly to test different regions, to see which ones work.Although deVille and Metzger are fairly new to Hilo Hattie — both started on April 1 of this year — they’ve liked the results they’ve seen thus far. “Miami is too early to tell,” says deVille, “but we like that market a lot. Arizona’s doing quite well. And the Anaheim store is doing fantastic; it’s actually rivaling our stores in Hawaii.”

Southern California, for example, works very well for us. And that’s why (expanding to) Las Vegas or San Diego is a natural. We’re looking at those spots now to cluster our developments in those areas and synergize everything from the supply side to management distribution.”

Set to debut in the third quarter of 2002 is a 25,000-square-foot Hilo Hattie in Orlando, Fla. The store will partner with a Hawaiian-themed restaurant chain called Kahunaville to form a 50,000-square-foot Hawaiian experience. “Kahunaville is very popular, and we’re doing OK ourselves,” Metzger says. “So we’re hooking up and seeing if together we can do even better.”

While both men agree with their predecessors’ overall vision of expansion, they are taking a more cautious approach. They chose not to renew their lease for their Guam store (opened December 2000), which was losing both money and strategic value in the company’s overall plans. “We only have so many resources to work with,” deVille says, “and we have so many promising opportunities on the mainland.”

Earlier this year, Hilo Hattie also abandoned plans for a Hilo Hattie store in Waikiki. “The timing wasn’t right,” deVille says. “Our flagship store on Nimitz remains a very viable operation for us, and the economic environment in Hawaii right now has led us to hold off on a Waikiki store. At some point in the future, when the timing is right, we’ll come back to Waikiki.”

No matter how many stores Hilo Hattie opens on the mainland, deVille says Hawaii will continue to be the anchor holding everything in place. “It’s important for us not to lose sight of the fact that our core business is still here in Hawaii,” he says. “We want to expand — that’s where our future lies — but we can never let go of our foundation.”


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