ROME — Six years after Sam Walton opened his first five-and-dime store in 1945 with the goal of being the lowest-cost provider, Herb Philipson opened his first retail outlet in Rome. Incorporated as Herb Philipson’s Army & Navy Store, Inc., the proprietor focused on providing brand value at low cost.
“My father introduced the concept of ‘price-fighter’,” says Gary L. Philipson, the company’s current president. “He never tried to be the cheapest, focusing instead on selling recognized brands at prices below his competitors. But pricing was not the only secret to his success. He [Herb] didn’t sit behind a desk, preferring to be on the store floor listening to customers and understanding what merchandise was selling. It’s really old-time selling, where you employ people to wait on the customers and include alterations as part of the price … I had the privilege of working with my father for 23 years before he passed and learning what made us successful.”
From its humble beginnings in 800 square feet of space located in downtown Rome, Herb Philipson’s (the company has dropped the Army & Navy moniker) has grown to an eight-store chain plus a distribution center, covering more than 270,000 square feet. The company leases its properties, except for Herkimer and Oneida, which are owned.
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“We opened our first store in 1951 and didn’t open our second store in Oneida until 1970. The third store in New Hartford followed 11 years later and Herkimer opened in 1987. The company waited until 2003 to … [launch] number five in Watertown and then added three more in just nine years [Liverpool, Syracuse, and Newark].”
The Philipson’s store-footprint averages about 30,000 square feet. Gary Philipson, who uses a Goldilocks approach to explaining store size, says “This size is not too big, not too small; it’s just right.” Today, Philipson’s chain of stores generates more than $25 million in sales annually and employs 250.
“Philipson’s has always catered to a customer base of hunters, fishermen, and campers,” says Philipson. “Over time, the stores have added work wear, a boys’ department, and outer wear. In addition to selling the traditional work boots, overalls, and other work wear, Philipson’s has also attracted an industrial and health-care following, since we offer work uniforms like scrubs for nurses. We also stock athletic equipment and fashion wear. One thing hasn’t changed, however, our strong brand names such as Lee []Jeans], Levi’s, Columbia [Sportswear], Under Armour, and Remington.”
Not surprisingly, Philipson’s has a number of competitors. “We compete with Dick’s [Sporting Goods], Gander Mountain, Bass Pro [Shops], JCPenney, and Walmart, just to name a few,” notes Philipson. “In fact, there’s a Walmart in every town where we have stores. To compete, we advertise [in a number of traditional venues] … radio, TV, newspapers. We also run a number of in-store promotions as well as exhibit at area trade shows.
“In addition, we utilize social media such as Facebook where we have [over] 3,500 followers and two months ago set up a Twitter account,” continues Philipson. “The company just upgraded its website (www.herbphilipsons.com) to help drive traffic to the stores … We currently sell gift cards on line and are exploring the online sale of merchandise.
The retailer also generates repeat business with its customer-loyalty initiative.
“Our Price Fighter Club loyalty program is very successful with over 50,000 members who generate points for signing up, providing an email address, and purchases. It’s a great way to generate repeat business as customers redeem their points. We are even looking at how to use mobile apps to draw traffic,” Philipson says.
Philipson, 56, a New Hartford native, joined the business in 1980, shortly after receiving a bachelor’s degree in history from Union College in Schenectady. He became company president in 2001. As the corporate principal of the family-owned business, he is joined on the executive team by David Sawdy, senior vice president; Michael Palmer, CFO; Guy Viti, vice president of operations and merchandise; and Sandy Kelsey, vice president of human resources.
“We have a great executive team,” opines Philipson, “backed up by great store managers and a number of long-term employees. The managers are on the floor with the customers, not stuck behind a desk. They are involved.”
Philipson’s also relies on local partners to ensure the company’s financial success. “We have banked with NBT for a very, long time,” says Philipson. “We rely on Fitgerald, DePietro & Wojnas [CPAs, P.C.] for our accounting, and Saunders Kahler [L.L.P.] for our legal work.”
When discussing future growth, Philipson compares his company’s decision-making process to a tortoise. “We are considering opening another store or two, but have no specific plans for expansion …The team is always looking for another opportunity,” says the company president, “but it has to be the right fit. We also have to consider that our distribution center in Oneida needs to expand to accommodate further growth and think about the size of our truck fleet. For us, it’s a deliberate process. Slow and steady wins the race.”
The word “deliberate,” of course, is relative. It took Herb Philipson’s 52 years to expand to four stores and less than a decade to add another four. Gary Philipson doesn’t have a vision of being the next Walmart, but he knows how to compete in retail by understanding his retail niche well. Looking to the future, he is optimistic about growth in the Mohawk Valley, especially with the announcement of Nano Utica. No one should be surprised when the president announces adding a ninth store to the chain.
Philipson resides in New Hartford with his wife, Lisa, who is a community education coordinator at Mohawk Valley Community College. The couple has three children: Evan, 24, who resides in Washington, D.C.; Jeremy, 21, a senior at Syracuse University; and Rachel, 18, a freshman at Boston University.
Contact Poltenson at npoltenson@cnybj.com
