The Met’s Artful Retail Manager

As head of women’s apparel at Saks Fifth Avenue, Sally Pearson knew all about anticipating the whims of fashion. She did not, however, have to forecast the whims of finicky curators, or try to gauge New Yorkers’ enthusiasm for Byzantine sculpture or Renaissance drawings.Today, as vice president and general manager of merchandise and retail operations at the Metropolitan Museum of Art, she routinely takes such elements into consideration as she negotiates the products to be offered alongside museum exhibitions.She must skillfully balance an aggressive and profitable retail posture with the museum’s prestige and quality reputation. It is a delicate task; Ms. Pearson’s success is evident in the Met’s tasteful catalog and Web-site presentations, as well as in a convincing upward trend in revenues.Ms. Pearson’s department will have racked up sales of about $75 million in 2004, the profits from which go to support the museum. About 70% of revenues come from the 17 stores located inside the museum and from nineteen satellite branches that are both free standing and in malls around the country. The museum also has a healthy catalog business and growing Internet sales.When she arrived at the Met five years ago, she found a retail operation badly in need of a facelift. While the quality of the offerings was first rate, some 22% of the inventory was beyond its prime, and management systems were hopelessly out of date. The company was selling too many items, and profitability was under siege.Ms. Pearson set to work reducing the number of items offered from 7,700 to 3,800. She and her team also updated the merchandise lineup, downsized the distribution center, and cut administrative expenses.While she enthusiastically pared headcount to bring down costs, other choices favored the continued cache of the business, such as the high quality (and expensive) boxes used in the stores.Her efforts have taken hold. Expenses have fallen 22% over the last five years; in 2003 the business posted the lowest cost to sales ratio recorded in 10 years.Ms. Pearson’s first couple of years at the museum coincided with two blockbuster shows: one featuring Jackie Onassis’s clothing at the Costume Institute; the other a stunning exhibition of Vermeer paintings. These two events brought enormous crowds to the Met, and to the shops.Ms. Pearson thought the surge of business was a normal feature of Met life. Products related to the shows flew off the shelves; costs were buried.And then there was September 11, 2001.All of New York’s institutions suffered the aftershocks of the September 11 terrorist attacks. For the Metropolitan Museum, as for many cultural organizations, the biggest calamity was the falloff in foreign tourism.Though the retail system still generates only scant customer information, it appears that foreign visitors, and those from outside the city area, account for a disproportionate level of retail purchases. The business was hit hard.Happily, there were at the time a number of important exhibitions already in the pipeline that went ahead, notwithstanding the gloomy economy. These booosted traffic through the museum, offsetting in part the economic downdraft.One great success was a show of Leonardo da Vinci’s drawings. Thousands poured in to see the master’s works, in the process generating $1.6 million in related sales. How? The curator of the show allowed the retail group to use a da Vinci design on ties, scarves, umbrellas – the works. And they sold.Not all curators are so pliant. They can sometimes confuse meaningful representation with retail potential, slighting the latter at the expense of the former. Nearly every product sold through the Met faithfully reproduces or is based on some item in the collection. As such, each one has to be approved by the responsible curator.Most are helpful, while some simply have no interest in generating retail business. Virtually all, however, appear quite enthusiastic about sales of the catalogs they’ve written. Indeed, sales of art books are a major contributor to the top line. The museum carries over 10,000 titles, and is a mecca for art scholars from around the world.As for most retailers, the holiday season is crucial to the Met. In the past two months the museum will have generated about one-third of its annual volume, or about $25 million. The big sellers? Important items are Christmas cards (roughly $2 million during that time), textiles, including scarves (about $2.6 million), children’s toys and games, ornaments, and accessories.However, by far the most important category is jewelry. The museum has long offered beautiful and reasonable reproductions of items on view in the exhibitions, but in the past couple of years this effort took on a whole new life.In late 2001 the museum put on a show that resulted in a major shift in its retail operation. It was “Treasury of the World: Jeweled Arts of India in the Age of the Mughals.”The show featured extravagant jewelry that might be expected from moguls, and afforded the opportunity to sell merchandise at a much higher price point than the museum had ever attempted.Ms. Pearson and her group approached the Gem Palace in Jaipur, India, and the famed jeweler Munnu Kasliwal about creating a collection based on the designs in the show – some of which were reportedly originally made by earlier generations of the Kasliwal family.The result was an astounding collection of one-of-a-kind pieces in gold, precious and semi-precious stones that sold for tens of thousands of dollars, and which continues to bring in business. Naturally, Ms. Pearson held her breath as this new venture was rolled out. It was hard to imagine a casual Met visitor plunking down $18,750 for a peridot necklace – even if it did have Mughal roots.She needn’t have worried. The collection generated an astounding $1.2 million in sales during the 12-week run of the exhibition – all from a tiny desk in the exhibition’s lobby.The success of the Mughal sales led the Met to ask Kasliwal to produce pieces tied to a subsequent Byzantium show, and he accepted the challenge with enthusiasm. He traveled to look at the show’s objects, and was evidently inspired by this opportunity to broaden his line.What’s coming up next? Though the retail group gets a heads-up well in advance of major shows, they cannot move forward with retail ideas until the objects have been collected and approved. Then, they often have to petition for reproduction rights, sometimes bartering with licensing opportunities for the loaning institution.It’s a complicated business, especially when the shows are suddenly only months away. This coming spring, the Costume Institute will be putting on a Chanel show; in the fall the museum will host an exhibition of Van Gogh’s drawings. Both shows promise large attendance, great product opportunity and a lot of buzz, just the sort of environment that makes Ms. Pearson’s group frantic – and happy.

The Met’s Artful Retail Manager

The Met’s Artful Retail Manager

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