It’s not easy being Pistachio
Jennifer Wells
On a blustery day late last fall—it felt as though a tornado was about to blow through—Heather Reisman officiated at the media launch of Pistachio, her latest enterprise. Dressed all in black, with a necklace that looked like a lariat fashioned from gold, she strode across the reconstituted floor (Owen Sound limestone) to stand before a gathering of reporters.
The surrounding retail space had been meticulously set: butter London nail polishes; Prestat chocolate in jewel-coloured boxes; the latest hair products from Horst Rechelbacher (the fellow who created Aveda); greeting cards and stationery made from recycled papers certified by the Forest Stewardship Council and gently imprinted with soy ink.
Reisman greeted her audience. “We’ve all been weaned on planned obsolescence,” she said. It was time—and this would become a corporate mantra—to “Buy less. Buy better. Buy forever.” Pistachio would be a mecca for the shopper seeking the intersection of high style and intelligent design with sustainable, ethically sourced items. And not just a location or two, but hundreds of shops spread across the continent. Reisman, who sits on the board of J.Crew and has a flinty determination to make it in the U.S., sees this as a North American-wide initiative.
At the back of the room, Ashley Rosebrook, Pistachio’s New York-based creative director and a former design director for Aveda Corp., mused about the potential appeal of the Pistachio emporium south of the border. “There is no concept like this in New York,” she said, looking unbearably chic on a grey Toronto morning. “I live in the West Village and I think this store would be a hit.”
So here it is: spring. The economy has tanked, and as a result, Pistachio is off target on its initially stated intention to open six to eight stores in its first year of operation. (There are two shops open in Toronto thus far.) The hope for a New York City opening this season has been sunk. And the belief that consumers will pay a hefty premium for a green product is being severely tested.
Heather Reisman settles into a club chair in her chief executive’s office at Indigo Music & Books Inc. to discuss what she has learned so far. (Yes, she looks amazing. And in her hot pink patent flats, ankle-clearing cream pants and raspberry, pink and green indoor coat thing that would be better described by a fashion writer, she appears years short of 60.)
Take the aforementioned Rechelbacher. The product? Not selling, Reisman says, firmly and frankly. “Too expensive,” she says. “We had that discussion with him. We had it many times. We said, ‘Listen, it’s not going to work.’…
“So we said, ‘Horst, we’re going to take that product out,’” she says, adding later that she’d like to carry the line again if a pricing agreement can be reached.
“We’ve learned a ton about what price points people will make the trade-off on. What we’re finding is that people will accept anywhere from a five to 15% premium. Over that, even if the product is beautiful and even if it legitimately warrants it, that’s all they will accept.”
In some cases, the company will work with a vendor to see if costs can be pared. On product that Reisman feels the company can build a reputation on—she loves the Dr. Joshi skin care line—she’ll accept a lower margin. But “apothecary,” the Pistachio word for bath and beauty, constitutes just 15% of the chain’s inventory. The lion’s share of its offerings—60%—lie in the paper category, where Reisman has a firm footing, having grown the paper business first through Indigo.
Journals. Monogrammed stationery. Birthday party invitations featuring blazing-red fire trucks. The line is not only eco-friendly but beautiful. So appealing, in fact, that, round about now, U.S. book chain Barnes & Noble will start offering Pistachio-branded thank-you notes, journals, initialized cards and more through 100 stores, ramping up to 150 by midsummer. “A lot of people think in order to be [eco-friendly] you have to be a construction paper, craft paper-type product with sort of brown and green designs,” says Bill Miller, vice-president of the chain’s gift department. “I think what’s great about Pistachio is that it breaks that mould.…It’s bright colours, it’s fun, it’s got a unique design sense.”
How meaningful is the Barnes & Noble order? “This would cover off what another couple stores would do,” says Reisman, who won’t disclose Pistachio’s start-up costs. “Indigo is strong enough that we can easily finance it through the first 24 months,” she says, after which she expects to turn a profit.
Brian Pow, an equity analyst with Acumen Capital Finance Partners in Calgary, says that in his observation, Reisman is calculating in her expansion moves. “She always walks before she runs,” he says, citing Indigo’s initially small and select product offering in children’s toys, which it expanded in brand breadth over time.
And she has certainly gained the attention of other players in the eco-friendly paper business. Mark Gavin, head of marketing and sales at Toronto-based Ecojot, which produces a range of post-consumer recycled notebooks and journals, is a supplier to Indigo—“They’ve always been a good customer,” he says—and sees Pistachio growing as a competitor in the wholesale market.
It’s not an easy place to be, attests Gavin, who says that most consumers still reach for what they like first, and consider a product’s green credentials second. As such, he says, “You gotta be green and better and price-competitive.”
Reisman is betting on the contrary. Come July, she will have a broad opportunity to test that belief as she rolls out a line of back-to-school materials to be carried in Pistachio and Indigo, with modest exposure in Barnes & Noble. “We’re making a big investment in back to school,” she says of the be-good-to-the-planet journals and such that she will be launching. “The kids will say, ‘I’m not going to spend 50% more, but if I can spend 15% more, I’ll do it.’ And they’ll tell the parents that’s what they want.”
That seems a brazen assumption, given the economic maelstrom. “Look,” says Reisman, “it would be a lot better to launch a new concept into a buoyant world....It may be a year or two that this will go on, so we may grow more slowly. But our interest in this is long term.”
The next destination? Reisman says Vancouver is the likely next stop. Who knows? The upside of a down market may offer a real estate opportunity or two. She appears to be in no particular rush as she reaches for another of her trademark phrases. “This,” she says, “is a journey.”
http://www.theglobeandmail.com/repor...rticle1149086/
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