Orchestrating Sept. 11 comeback
 
J&R Music finally regains lost sales with online focus, new product mix
Gladys Knight's visit to J&R Music World last week attracted hundreds of fans eager to hear the soul star sing gospel standards and get her autograph. Ms. Knight's rousing appearance wasn't the only cause for celebration. With the books closed on 2004, the retailer could finally say it recovered from the effects of the terrorist attack that felled the towers of the World Trade Center mere blocks away.
 
"We have surpassed the sales levels of pre-9/11," says Rachelle Friedman, who co-founded the downtown electronics institution with her husband, Joe, 38 years ago. The store has always been a hot spot for tech junkies who needed to own the latest gadgets, but New Yorkers and tourists alike shunned stores below Chambers Street after Sept. 11. After the tragedy, J&R had to change the way it had done business for years. Increased celebrity appearances such as Ms. Knight's are only one part of the new strategy J&R has employed. The company has focused more heavily on its Internet operations and has been tweaking its product mix to broaden its customer base.
 
"We remodel our stores quickly because technology changes quickly," Ms. Friedman says. As a family-owned business, J&R doesn't disclose sales or profit figures. But in DSN Retailing Today's list of top retailers, J&R ranked No. 142 with $323 million in revenues for the fiscal year ended June 2004. J&R was the only single-location retailer to make the list. More and more of the company's sales are now coming from customers who live outside the city but shop on the company's Web site. To attract customers looking to buy digital cameras, portable digital music players, plasma television and the like, J&R has shifted more marketing dollars to promote its Internet operations and has strategically placed hundreds of links on technology sites. "They've been one of the most aggressive in the marketplace," says Stephen Messer, chief executive of LinkShare. His company connects retailers such as J&R with tech gurus who write online about their favorite gadgets. Consumers read the write-ups and click a link to www.JR.com if they want to buy something. LinkShare started putting J&R's link on Web sites about five years ago.
 
Internet option
"When 9/11 happened, that team knew there would be difficulty getting people downtown, so they turned to the Internet," Mr.Messer says. Getting shoppers to its site is only half the story. J&R has been a success on the Web because it offers sharp prices and an extensive, ever-expanding inventory, says Alan Wolf, editor of Twice, a trade journal that covers consumer electronics. Although the Internet has been good to J&R, the Friedmans still have faith in their storefronts on Park Row. J&R owns and operates 300,000 square feet of retail space there and is planning to expand even further. In the next few months, the retailer will add two floors to the two already dedicated to digital cameras and their accessories. It also just opened a 2,000-square foot personal-care store with massagers and hair dryers to serve the area's burgeoning residential community. In the next year, J&R will convert 15,000 square feet of warehouse space below 17 Park Row into a new sales floor for personal care products, appliances and housewares. The new stores are partly designed to attract more female customers, a missing component in J&R's success. The company is also partnering with InStyle magazine to exclusively sell a wedding music CD, starting this spring in its store and online. J&R's Web site will launch a bridal registry in the next three months.
 
Feminine appeal
It's a chance for us to appeal to the female customer in this typically male-dominated industry," says Ms. Friedman, who talks about her family's one-block empire while surrounded by her collection of candid celebrity photographs. Snapshots of Bruce Springsteen and a young Janet Jackson are just two among dozens of smiling faces hanging in Ms. Friedman's pink-and mint-colored office. Mixed into the display are several photographs taken outside J&R on Sept. 11. Ms. Friedman recalls the decision to reopen after only six weeks, even when the insurance companies would have paid the owners more to stay shuttered. "We had to open. It was a deserted town. It was scary," she says. "The second we reopened, the vendors were back on the sidewalk."
 
Still jazzed for jazz
THE ONE PRODUCT AREA that isn't expanding at J&R is music CDs. Once the biggest draw in the store, music has become a shrinking business, compared with iPods, video games and computers. Still, Ms.Friedman insists, J&R will never give up its well-known jazz department. "We're very passionate about the music we carry, even though, per square foot, we could probably put another category there that would make more money," Ms.Friedman says. "We do it for our customers who love it." Return to news index page: click here!