Hilo Hattie wooing kama'aina
By Kelly Yamanouchi
Advertiser Staff Writer
It's been 40 years since the first Hilo Hattie store opened along a road between Lihu'e and Kapa'a on Kaua'i.
Eugene Tanner • The Honolulu Advertiser
The shop was then called Kaluna Hawaii Sportswear. A couple of years later in 1965, the company became known for the "$3.95 Aloha Shirt."
Valerie Sylvester of Kailua browses at the Hilo Hattie store in Ala Moana Center. Hilo Hattie, perceived as a kitschy outlet for tourists over much of its 40 years, is trying to remake its image to draw more Island residents.
Prices have risen considerably since then, and Hilo Hattie has grown far beyond Kaua'i. There are now eight Hilo Hattie stores on four islands in Hawai'i, and five on the Mainland bearing the name widely recognized as a popular Hawaiian wear and souvenir outlet for tourists. Today it employs 500 people, 300 of them in Hawai'i stores.
As the company celebrates its fourth decade in business this month, company president Paul deVille is working on building a more stable and bigger business after a difficult post-Sept. 11 period for tourist-related businesses. He has visions of even more Hilo Hatties around Hawai'i. In addition to stores in Lihue; Honolulu; Kona and Hilo on the Big Island; and Lahaina and Kihei, Maui, deVille has his eyes on Waikiki; Waikoloa, Hawai'i; and Po'ipu, Kaua'i.
"Hawai'i is still a growth market for us," he said.
DeVille would not disclose sales figures for the company. One area where he hopes to see growth is sales to local residents.
In the past few years, as the tumultuous visitor industry has made selling hula girl dolls and bright aloha shirts to tourists a volatile business, Hilo Hattie has been trying to remake itself in the eyes of local people by promoting local-style aloha shirts with subtle prints and housewares geared for kama'aina.
It's unclear how successful that effort will be. Many local people still consider Hilo Hattie to be a kitschy store for tourists.
"We're trying very hard to change that perception," deVille said. "A few years ago (kama'aina business) wasn't even on the radar screen."
Eugene Tanner • The Honolulu Advertiser
But the market is growing in importance, especially since the company has permeated the visitor market, with an estimated one out of every four tourists stopping at Hilo Hattie, according to deVille.
Hilo Hattie will operate The Kama'aina Collection, on the main level of Ala Moana Center, through January to try to increase visibility with local customers.
Hilo Hattie is the sole operation of the privately held Hawai'i retail and manufacturing firm Pomare Ltd. In 1979, the company bought rights to the Hilo Hattie name, which was the stage moniker of famous comic hula dancer Clara Haili, who died that year.
The retailer likes to say that it promotes a fun atmosphere of "a complete Hawaiian lifestyle experience," including shell lei greetings for customers at the entrance to each of its shops.
"Their talents are 50 percent being a good merchant and 50 percent being a good marketing company," said Doug Smoyer, president of consulting firm Retail Strategies of Hawai'i. "They sort of create their own business by painting this picture of who they are and then bring people there" on buses from hotels, airports and cruise-ship docks.
But the slump in tourism after the Sept. 11 terrorist attacks, the Iraqi war and SARS in the past three years have taken a toll on Hilo Hattie's bottom line.
The stores have also been hurt by the growing proportion of repeat visitors to Hawai'i. First-time visitors are more likely to shop at Hilo Hattie.
The combination of negative factors "spells pretty tough times, and we've had to maneuver ourselves to be able to deal with what was ultimately a slowdown in customer traffic," deVille said.
It's only recently that the company has managed to sufficiently cut costs, bringing them in line with revenues and keeping from losing money, he said.
Hawaiian wear is not an industry where there's a lot of time to relax. Competition for the tourist dollar comes from all sides, including from Duty Free Shoppers, which caters to Japanese tourists.
As Hilo Hattie looks to gain a bigger share of the local market, already one of its fasting growing sales segments, it is challenging such major national retailers as Macy's and Sears and long-time clothing operations such as Reyn's.
In a move to extend its market even further, the company has begun selling Hilo Hattie-brand clothing at Army and Navy exchanges in Hawai'i.
Hilo Hattie also provides many of the uniforms that hotels, restaurants and other businesses use, and has done business with Kamehameha Schools and Aston Hotels and Resorts.
Other segments showing the fastest growth in sales include Internet orders and home furnishings, deVille said.
Hilo Hattie also signed a marketing agreement this year with Amazon.com that has extended its reach online beyond its popular Web site.
This month, the company is promoting an anniversary sale on Hilo Hattie-labeled clothing and announced the opening of a temporary store, The Kama'aina Collection, on the main level of Ala Moana Center.
It is open only through January to take advantage of holiday buying and is a smaller, more upscale store than the company's other location on the makai-side, ground level of the mall.
The temporary location is mainly aimed at "getting us in the public's eye" to change the long-held perception of Hilo Hattie as a tourist store, deVille said. "We want to be the store for kama'aina."
Reach Kelly Yamanouchi at 535-2470 or kyamanouchi@honoluluadvertiser.com.
