Jun 30, 2011

Building a Web Business Brick by BrickBy David H. FreedmanBoss.Blogs.NYTimes.com

Someone strolling the Lower East Side of Manhattan is liable to spot a flier plastered with the face of a pugnacious Boston Terrier. That’s Monkey, the nominal guard dog of Any Old Iron, a year-old men’s clothing store that has quickly become a destination for shoppers, as well as a fixture on the local party scene. But what even most fans of the store don’t realize is that Any Old Iron is, in a sense, a gateway to a Web site.

A lot of companies these days are founded as Web businesses, and many physical stores end up growing substantial Web sales over time. What’s a bit unusual about Any Old Iron is that the company’s Web site has been intended as the main engine of the business from day one — even though almost all of the investment and attention has been focused on the store. “Our strategy is to build credibility and cachet through the store,” said Christopher Melton, an arts-oriented entrepreneur who helped found the company last year along with Andrew Clancey, a celebrity stylist. “We plan to open a second store in L.A. and then two more stores in other locations. And then from there it’s all Web.” Indeed, the Manhattan store isn’t even expected to be profitable on its own. In a sense, it’s a loss-leader — the rent money is really an investment in Web advertising, said Mr. Melton.

He had observed that some of the big, high-fashion retailers operated small stores in SoHo, a chic shopping area where sky-high rents make it difficult to turn a profit. So why bother? Because the SoHo presence serves to build the brand in the eyes of the fashion-conscious and pays off for the companies in increased sales at other locations and on the Web. “A store may lose a lot of money,” said Mr. Melton, “but it helps make the brand’s whole system profitable.”

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