Still Standing

April, 2009

When Jelly’s first opened in June 1983, comic books were 60 cents, Atari ruled the home videogame market, and the music industry still spun vinyl records. A quarter-century later, comics are $2.99 and up, Nintendo, Xbox and PlayStation rule the videogame market, and a key part of Jelly’s revenues is the renewed popularity of … vinyl records.

Inside a cramped storage room at Jelly’s Kakaako store, owner Norm Winter leans back on a sofa, adjusts his trademark beret and shakes his head. “This past year was hell,” he says wearily. “We were way behind with a lot of our bills. We were almost cut off from our suppliers. There were times when we wondered if we could even stay alive.”

Yet Jelly’s is alive, outlasting Tower Records, House of Music and other big competitors. The stores in Kakaako and Aiea still offer new and used music, books, comics, games, collectibles and other hard-to-find treasures.

“You got so many people operating chain-type stores. Jelly’s is kind of anti-chain,” Winter says. “You come to our store, and you can find great stuff and see different things every day. It’s kind of refreshing.”

Jelly’s was founded by Cindy Lau, whose nieces marveled at her round “jelly belly.” She opened the first store on Keeaumoku Street in Honolulu, across from Ala Moana Center. A few months later, Lau met Winter, a free spirit from California who had been living in a North Shore tree house. They married, and he began helping at the store.

Lau died in 2004. Winter, 67, now runs Jelly’s with daughter Chyann, son Michael and about 15 employees. 

Other Jelly’s locations opened and closed over the years, including stores on Piikoi Street, in Pearl Kai Shopping Center and in Mililani. The 5,000-square-foot Aiea shop, located at the Harbor Center behind Cutter Ford, opened in 2001. The 7,000-square-foot Kakaako store opened in March 2008. “We always wanted to come back into town, but the rents were so high it was ridiculous,” Winter says. “This rent’s real nice, at $1.40 a square foot. We waited for our opportunity, and it came.”

Unfortunately, the Kakaako store opened at the start of a nationwide recession. Most part-time workers were laid off last year and the advertising budget was slashed. In January, the two stores combined for only $150,000 in sales. “We used to do that with just the Aiea store,” says Winter. Winter and his staff have taken steps to attract more customers.

“In retail, you want to break the ice,” Winter explains. “So outside [the Kakaako store] we have 25-cent LPs, 50-cent CDs and so forth. Sometimes I put out some pretty good stuff out there to spice up interest. When we can break the ice, it gets the customer in the mood to come in and look around some more.” Once shoppers are inside, Winter adds, the goal is to maximize their spending by offering bargains. For instance, if you buy four CDs or four books, you get another free. Buy seven CDs and the next three are free.

“We have people spending hours in here trying to find those 10 CDs that they want,” says Winter, smiling.

This era of music downloads has hurt Jelly’s sales, but another promotion tries to minimize the damage. A “burn/return” policy lets customers buy a CD at full price, take it home to download it on their computers and return it for a refund — minus $4 and the excise tax.

Winter says that’s a win-win deal for his customers and his store. “We have so many [CDs] that are hard to replace,” he says. “So much stock is being deleted because the major record companies don’t want to carry their catalogs anymore. When they sell something out, they don’t reprint them. So with the rare stuff – and we carry stuff that even the Internet doesn’t have – three times out of four, I’ll get them back through the ‘burn/return.’ ”

Increased sales have come from an unexpected source: vinyl LPs. Since technology now allows music lovers to transfer songs from vinyl to MP3 players, Winter has seen customers flocking to the record bins.

“The kids are getting into vinyl,” Winter says. “That’s good to see, because that was probably the biggest thing we had lost from our early years: the kids. Before, they were here for the comics and the baseball cards and the music. Kids from all around the Islands would love to come here. But when the downloading craze started, the newer kids stopped coming. Now, the vinyl is starting to bring back at least some of them.”
And Winter, who prides himself on listening to what his customers want and finding it for them, is reconnecting with young music lovers. “I couldn’t tell what their kind of music was until I got them through the door,” he says.

Jelly’s has continually evolved. Comics, once the biggest sellers, are now third behind music and books. Baseball cards had a strong presence until that market declined. Taking their place are manga comics.

The store even endured a change of ownership. In the 1990s, Winter was the mastermind behind Radio Free Hawaii, an FM station whose playlist was based on songs voted on by listeners. While the concept earned rave reviews, the station lost money and Winter was forced to sell Jelly’s in 1993 to Mainland distributors. A legal settlement returned the Jelly’s name to Winter in 2001.

Winter now hosts an oldies show Monday evenings on KGMZ 107.9. “We get a lot of young people listening to us,” he says. “We play all the unusual oldies that you probably haven’t heard in years. Even though it’s aged, decrepit stuff, it’s a new sound for them!”

The economic downturn only seems to have emboldened Winter.

“I think the reason we have this big economic problem now is because we have so many big businesses controlling the market,” he says. “Yeah, they’re really great in giving you selection and price, but they don’t give you identity. They don’t give their employees identity. You can go to Wal-Mart and they have a great selection and great prices, but people just basically walk in there, buy what they need and walk out. Their employees all complain to me. They’re not happy. They’re not finding themselves through their work.

“The bigger you get, the harder it is to keep that identity both with your employees and your customers. And that’s what small business has been pretty good at. When you come to Jelly’s, we actually give you an identity. We appreciate your presence, and we happily go out there and talk with you.” Looking to the future, Winter foresees tough times ahead for big businesses.

“I think we’re going to have a disassembling of all big businesses within the next 10 to 15 years,” he predicts. “When you look at it from that angle, it has to be a gold mine for Jelly’s.

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