The Voice of Retail: A Legacy of Luxury

In this episode of The Voice of Retail, Tim Phelan speaks with Russ Mitchell, owner of Mitchell's of Westport and Richard's of Greenwich, about the evolution of luxury retail, the importance of customer relationships, and the challenges faced by family businesses in the retail sector. They discuss the strategies for expansion, the significance of community engagement, and the impact of modern trends on retail. Russ shares insights on employee training, the importance of knowing your business, and the future of retail in a changing landscape.

The Connecticut Retail Network is The Voice of Retail, at the State Capitol and across the state.  Our podcast features timely conversations about retail topics and trends, with retail industry leaders and business owners from throughout the state.  It’s a podcast for retailers – and their customers!  To learn more about us please visit https://ctretailnetwork.com/

Transcript

Tim Phelan (00:03)

Welcome to The Voice of Retail, the podcast of the Connecticut Retail Network. I'm Tim Phelan, president of the Connecticut Retail Network and your host for this podcast. The retail industry is the nation's largest private sector employer, contributing $5.3 trillion to our annual GDP and supporting more than one in four US jobs. 55 million working Americans.

The Connecticut Retail Network represents the retail industry in the state of Connecticut, an industry that supports more than 470,000 jobs and contributes more than 34 billion to our state's economy. 24 % of jobs in Connecticut, nearly one in four, are supported by the retail industry. And more than 98 % of all retail companies are small businesses employing fewer than 50 people. The Connecticut Retail Network is the voice of retail at the state capitol and across the state.

On our podcast, we bring you timely conversations about retail topics and trends with retail industry leaders and business owners from throughout the state. It's a podcast for retailers and their customers. After the podcast, learn more about the Connecticut retail industry. Visit our website, Connecticut Retail Network, www.ctretailnetwork.com. And if you have a suggestion for a retail topic you'd like to hear more about, let us know by email. We'd welcome your suggestions.

Russ Mitchell (01:26)

today.

Tim Phelan (01:26)

I am thrilled to welcome Russ Mitchell, a leader in American luxury retail and a steward of one of the Connecticut's most iconic family businesses to our podcast. Russ is the owner of Mitchell's of Westport and Richard's of Greenwich, two institutions that have defined high-end fashion and personalized service for generations. Under his leadership, the Mitchell family has continued to grow their reputation for world-class style, impeccable customers, relationships, and deep commitment to the community.

We'll talk about what it takes to run a multi-generational family business, how luxury retail is evolving in the digital age and lessons he's learned from decades at the forefront of the retail industry. And Russ, welcome to the show. And as I mentioned in the intro, is a thrill to have you.

Russ Mitchell (02:13)

Well, thanks for having me, Tim, you looking forward to it. ⁓ You and I met a number of years ago. was thinking about when I came up to came up to Hartford when we are actually we are the only industry, they were the only state in the country that taxes luxury goods different than other goods. And you were actually very helpful to ⁓ temper that. Yeah, even though it didn't happen, but it was.

Tim Phelan (02:38)

unfortunate that that didn't it's one of those things that the legislature does and I said we're only doing it temporary temporarily and then it's stays on the books forever.

Russ Mitchell (02:48)

That's your business, not mine, but you know that that's the way things work, right? Anyways, great to have you. And the only thing in the introduction, I just want to say that you were nice enough to credit me with a lot of what's going on, which we'll get into probably, but I have a large family that we all work together and it's very much a team effort. And I'm just one part of the cog that makes our business successful.

Tim Phelan (03:13)

Well, I think that is a great place to start, Russ, because I think a lot of people may know Mitchell's now, but they may not know the history of Mitchell's, which is a fascinating story on how you got started, how your grandfather got it started, and how your dad and your uncle took it to another level, and how you and other family members have taken it. So why don't you, if you could just spend a couple of minutes talking about your-

Russ Mitchell (03:35)

I'll

give a quick thumbnail because we could go on forever. So my grandfather started in 1958. His name was Ed Mitchell. And actually, he and my grandmother Norma really were the founders. the interesting part about that was he was 52. So that's very atypical. Most small businesses are founded by a young entrepreneur that has a mission at age 20 and doesn't want to let go to be candid.

until they're 80, right? So you get 60 years of a founder. In my grandfather's case, cause he started so later in life, he had another career that was not in retail. He just was a pillar of the Westport community. He was known and liked. And he just decided he didn't want to commute to New York city anymore for an advertising job and founded a, he says, you know, three suits in a dream in a plumbing supply store. they hung the three suits on some pipe racks and

Then we quickly grew. He had two sons, my father and uncle, who he had joined relatively quickly. And then fast forward, we were a single store in Westport, Connecticut until 19, excuse me, then my brother and I and my mother joined the business in early 90s. And the big move there was in the mid 90s, we

bought our first location that wasn't our original location. So we went from one store to two. So it was a long time with just one store, 1958 until 1995. And that's when we bought a store called Richards in Greenwich, Connecticut. And we had known a long time, very similar business. And I think the interesting parts there was, again, for anyone who's starting a retail, going from one store to two is really hard.

Tim Phelan (05:25)

Yeah, that's a fascinating question. Can we just stop for just one second? If many of our listeners are independent stores, if they're thinking of in single store locations, if they're thinking of expanding to another store, what is the thought process that goes in there? When do you know it's time? How do you financially do it? How's your product mix? Who's the ... all that. Fascinating.

Russ Mitchell (05:48)

question.

It's a podcast unto itself. But look, there's lots of paths. don't, you know, and it was a while ago. You know, and you can say it was because my brother and I came in, but my father actually really wanted to do it. He had tried to do it 10 years earlier and he could not get the people in Greenwich to sell. It really took us to help push that over the line. I don't know, Tim, I think it just is, you know, if you're

Well, we'll probably get into this. I'm a big believer that, you know, you don't want to go too fast than anything. So if you're not well capitalized, you know, you're borrowing a lot of money and you're really thin. The idea of doing another thing of any kind of thing is a bad idea. you better have your formula really honed and humming.

and be on strong financial footings in my mind before you would think about another location, which is this classic thing in retail or a major expansion. But obviously the second location just provides a host of issues because guess what? You can't be in two places at one time. And the classic, what makes a great founding retailer? You're there. You know the customers.

Tim Phelan (07:07)

when your name is out in front of the store.

Russ Mitchell (07:09)

Yeah, but that's as you put in your intro, I don't know you said how many retail businesses have less than 50 people. I don't remember your stat, but it was a very high number. Anyways, I would be my quick thing is you better know it real well. And I would argue it's sort of a theme of ours. Don't do any major things when you're financially strapped because things will not go as you expect. You know, you read about the home runs. Most people, it's very stressful to go to a second location. Yeah.

Tim Phelan (07:39)

No, no, no. ⁓

Russ Mitchell (07:39)

Sorry. Another

thing that's of interesting, I think from a retail perspective, that's very different about our strategy. I try to highlight things that I think that we've done differently that have worked for us, maybe not good for everybody. So an obvious thing is you said, my name is Mitchell. Our store here in Westport says Mitchell's on the outside. We bought a store in Greenwich, you know, 20 miles away. It was called Richards and most people would change the name.

We elected to not do that. And it's been a hallmark of our long-term strategy where we bought other businesses. We've kept the name and we believe that, you know, staying local, mean, trying to be as local as possible in your retail strategy is a good idea. And look, I'm sorry to put it, the people in Greenwich, they want to go to a store that's based in Greenwich. They don't really want to go to a store in Westport. Now it brings a host of problems having two brands. We think it's worth it. And I'll just...

The rest of the story, I'll go really quickly. A bunch of other, have another brother that joined the company, three cousins that joined the company. We now have two in the next generation that are working here. My father and uncle and mother are ever retired but my mother just walked by, so she's still say hello. They're in their mid 80s. So you've got 10 plus family members wandering around in the business. Not everyone works in one building, but we're all still here. And fast forward, we have bought

In 2000, in the depths of the financial crisis, we bought some stores in California, quite honestly, because they went bankrupt. Then we bought some stores in the Pacific Northwest. So we have stores in Seattle and Portland. And I don't know if you know this, but about three months ago, we bought a major store in Dallas, Texas. So we now have, we have, we have three or four brands.

Yeah, I'm 10 stores and you know, we're up to about 450 employees. So we are probably no longer classified as you know, we have it. have a bigger business than people think, but we still try to run each store as the local one off, know, dominant hero ⁓ in that community. So again, even in San Francisco, we own a store downtown. It's called Wilkes-Bashford. Wilkes was a great real person.

who unfortunately passed away, we bought it from. And we think, you if you're in San Francisco, you should, you know, you want to go to the local store. So that's the nutshell of that's the, that's the, you know, 60 plus year in history that we have. Yeah. Exactly. Yeah. Please do to the dream. It's not the same business, but we try really hard. We try. I always say my job is to make it the same as it was for him. Know your customer really well.

Tim Phelan (10:19)

You've come a long way from your grandfather, great-

Russ Mitchell (10:35)

build your business based on relationships in a local community. And we think that's our enduring competitive advantage.

Tim Phelan (10:41)

Yeah, that's great. mean, that answers another question I was going to ask you that the tradition that you're you're started with the modern retail trends and the modern customer demands. How do you how do you fit all that together to make it?

Russ Mitchell (10:56)

Well,

we're, you know, we are, we are lucky. say that nicely that we happen to be in a segment of the industry that has not changed as much as others.

Tim Phelan (11:08)

Yeah, but I challenge that a little bit, Russ. mean, men's

Russ Mitchell (11:11)

Well,

I'll stick to my game. we had started a bookstore, if our business was books or electronics, I'm sorry, my story would be different. Whether we would have pivoted to some other thing is a question, but let's just say it's easier that we didn't have to make the pivot. so what do I mean by that pivot? And part of this is, you know, by going upscale has helped us ⁓ just because ⁓

You know, we're in a place that you have the margins in products to create, to invest in ⁓ people, ⁓ high-end stores with people and high-end customers, we still believe strongly in the data is just 100 % supports that they still want to touch people in real stores. We can talk about digital and we're at the forefront of all the trends, but the reality is our competitive advantage is

It's the same competitive advantage my grandfather started with in 1958. He was known in the community, the people knew him. every day, you know, the people that come in the store today that drive the volume, they will have an existing relationship with people that they know. ⁓ They know Chris Hurdy, who's worked for us for 30 years here. They have relationship with Chris and our store. That's and that's exactly people didn't come to my grandfather's store because of his store. They came to me because of him.

And that piece of it, we're lucky that that model can still exist in today's business. think, or I shouldn't say we know that part. I always like to say, I don't want to sound definitive about anything, but we know that that business still exists today.

Tim Phelan (12:55)

So that means when you opened your store on the West Coast, you would try to keep employees that had been there.

Russ Mitchell (13:02)

100%. We kept everybody, almost everyone to a fault. mean, if anything, like I said, we just bought a store in Dallas. were 85 ish people. I think we've let three go. I mean, some overlap of some corporate stuff that was something that we felt terrible doing it. every single person that interacts with the customer, same people. Yeah. We layer in some tools to help them be better at what they do. But in general,

that's what we're buying when we buy again our strategy of expansion I didn't I touched on that a little bit. We have never opened except for the original store a store from scratch we've always bought other stores yeah because what we're buying is relationships and volume we it's very hard we know a lot of people and we've thought a lot about opening our store someplace where we don't have one and

It's tricky because it's very hard to know how much business you're going to do. if you're wrong on that because of, sorry to go into the economics of our business, because the problem, one of the big problems you have is retail. When you open up a store, do need? You need a lease, need a location, right? Almost we haven't known a few of our buildings, but that's atypical. It's just some historic reasons.

But for the most part, need a lease and no one's going to give you a lease for two months to try, know, mean, depends obviously, you know, maybe in really bad times, someone will let you try it. But for the most part, they want a financial commitment. But for the most part, there's a lot of money that goes in. Yeah. It's very difficult to know. You know, if you just look at any kind of metric of how much business you're doing for a dollar of rent, right? What percentage of your occupancy costs? And I'm sorry, in this business, if you're wrong on the lease, you're wrong.

And when you're wrong on the lease, it's very difficult to do anything. Overcome that. That's, you know, it's sort of retail 101. ⁓

Tim Phelan (15:00)

to overcome this.

Well,

no, it's an important topic. It's a topic for a future podcast we have planned is negotiate the right lease for your... Can we go back to just a little bit about training and employees and new employees? Because one of the hallmarks of your family is customer service, right? mean, Dad wrote a great book about it and Hug Your Customer, think it was called. Great book.

Russ Mitchell (15:10)

It's

That's how your customers do it. Yeah.

Go selling, not that, but yeah, timeless, timeless topics, right? how do you go beyond people what people expect? mean, that's what he, you know, the hug was, you know, obviously he actually likes the physical hug, but he also would be anything you do that's a surprise, right? Something you can do to delight somebody. And to begin to, again, how I fit in here is I'm more of the back of house money guy, but you we all,

strongly believe in customer service. I mean, look, the number one thing you can do about this is how do you attract and retain one company? Because like, even though we have a pretty good sized company now, our training is horrible. I mean, we're just not good at it. But the good news is, know how many new people we hire a year in sales? Very few. Is that right?

Tim Phelan (16:22)

You gotta be pretty good at it.

Russ Mitchell (16:30)

very low turnover. We have career people that have worked with us There is half the company, I don't know the average, I should know it off the top of my head, but it's 20 years plus. So almost everyone's been here. To be a newbie is unusual. And so most of the training is watching and learning from peers. Cause I find even formal training rarely works. you learn by doing.

and observing and modeling behavior. so ⁓ I would say it starts with, like I said, even though I'm the money guy behind the scenes, I try really hard to work Saturdays on the selling floor. ⁓ All of us are in the stores leading that taking care of customers is important and creating an environment where people can create, have a career.

in retail sales instead of an hourly person that gets plugged in when they need it. look, I can understand why some of the big national chains have to do that, but if you're trying to compete against them, which we all are, right? I mean, our biggest competition is still large national players. Your advantage is to have better people, I think. And good people, you know,

know, when you go into a restaurant, you always say, you know, if the maitre d is always the same person who knows you by name, how much better is that you go into a local local coffee shop, the same person there who can say, Tim, how much better is that it's immeasurable. So the key is the key in training is have to do as little as possible by not having to hire a lot of new people. I know that that's wasn't exactly what you were expecting.

Tim Phelan (18:22)

But I mean, let's say you went into it when you're experiencing what you're going into new markets like you just went in Dallas and you.

Russ Mitchell (18:28)

Well,

again, again, the new markets that we bought, you know, we bought stores, we haven't. Right. But, it's a hundred percent. And that is a major challenge for us. mean, we're one of my brothers is in Dallas this morning, or has been here all week. And, ⁓ you know, the topic of this, you know, came up. ⁓ I don't know, I don't have any real silver bullets other than other than, ⁓ you know,

Tim Phelan (18:34)

new employees to

Russ Mitchell (18:58)

having high expectations that you can change human behavior quickly is really, you can train people how to do a process. Like, you you've got to do this to do this, right? You know, how to bring a transaction and a point of sale system. Okay, that's pure training. But you're not gonna, mean, obviously there's a minimum bar there. If you can't do that, then close the door, right? But how do you, the part you want to talk about is how do you excite customer? How do you create an environment that people want to come back?

Tim Phelan (19:28)

Right, what's the culture? How do you change it? How do you create it?

Russ Mitchell (19:31)

It's

very, very difficult. don't think you can do anything but model it strongly from the top. Be very consistent on what you do. And I'm sorry, you have to be there. this is one of the bad parts about retail. You just got to be there. You can't, as an owner, you can't just hire people and expect that that's going to work. And again, obviously you can, depends on your model, an our model.

Tim Phelan (19:47)

is you gotta be there.

Russ Mitchell (20:01)

Right. Which in our model is to have, you know, we don't have any stores that are very low volume. We don't want to have a store that's very low volume because we can't do all the things we want to do in that store. So that's why we don't have stores everywhere. Right. You know, I don't want to have lots of tiny stores. I'd rather have medium sized stores that have a decent number of people in it that we can afford to invest in the people and to be candidates, you know, then worth our time and effort to be there. Right. Sure.

Yeah, yeah.

Tim Phelan (20:32)

But

just go back, this is another topic. We could have separate podcasts on all these. But that's why retail is so fascinating because it never ends. like, so now we're in the third generation of the Mitchell family.

Russ Mitchell (20:37)

Of course, yes, man.

Right.

Fourth. Fourth. Yes. Two 30 year olds, two 30 year olds that work here in the store with me. They're here today, both of them. So.

Tim Phelan (20:47)

I

Awesome. So I remember reading, I think in your dad's book about culture that you had about jobs and family and what was sort of required. And one of the things that always struck me was there had to be a job. It wasn't just because you were a member of the family. Didn't mean you were going to get, you were entitled to anything. There had to be a job for which. So can you talk a little bit about how you guys, again, it's a huge part of retail as we know.

Russ Mitchell (21:01)

Yeah.

Tim Phelan (21:22)

Lots of times, family retailers can make it from one generation to two, but from two to three, oftentimes they fail. Certainly, I don't know a whole bunch of retailers that have gone from three to four. So what is the secret of your success in that area?

Russ Mitchell (21:39)

Well, yeah, the good news for me is that the third is from an academic standpoint, the third generation is always the one that screws it up. And I'm the third generation. So I'm pleased to say so far that hasn't been the case. know, we're hopefully modest and recognize that, you know, and that's the other part about retail. I mean, I would say, well, I shouldn't say when you sell things that people don't need, because most things we sell people could easily defer.

you know, tomorrow your sales can go to zero. And it happened twice in my lifetime here. COVID and the financial crisis didn't go to zero, but it came close. mean, so that's another just little, but anyways, our generation, I don't know. A couple of things, let me answer your first question. Your first question was in hiring.

First of all, we have a formal written policy of, know, a family employment policy that's that we've all agreed to. And the hallmark things in it are, there's more than two things, but the two things in it, it was in my dad's book quite a bit too, is that you had to work someplace for five years before, else before. And I would, and believe it or not, this has been challenged by some people. my brother actually, who's,

who is the great talent of our businesses. My brother and I are technically co-students. Brother Bob. Brother Bob. He's really great. And he wanted to write out of college, work. And my dad said, no, this is 1990. This is long time ago, 35 years ago. And my grandfather almost killed him because, and my dad said, no, I really believe strongly in this. If it's really right for him, he'll come back.

And it really is a great policy because, you know, most people focus on that you want the purpose of the policy is to go get some skills, right? You bring and yeah, okay. That's that, that can be part of it, but the much bigger part of it before is you have to work for someone else besides your family. Yeah. You have to know what it's like to be an employee. ⁓ and you have to see how that all works outside of, ⁓

your family's business. And that is the lesson that we feel is passionately. The next big thing, so five years out, the next big thing is there has to be a real job. Have we been, I mean, do I think that that rule can be bent a tiny bit? Yeah. Yeah. I mean, but it shouldn't be really bent, right? Because you do such a disservice to the person you're bringing in. This is the part.

people have great, you know, I don't know what you want to call it, great radars. If the person being brought in is being brought in for no other reason than their father, uncle, mother or whatever owns a business, it's impossible for that person who's brought it in to have any respect of, it makes it so much harder. So if there isn't, and quite frankly, if they're not willing to start almost at the bottom, right?

Most entry level jobs, you got to start at the bottom. ⁓ It's really hard for that person and everyone else who works for you because like it or not, the owners can't drive the whole company. You need everyone else to be pulling for you. And if they're not behind that person, come in and it's very destructive. So I would say those are the two big things. Real job and work someplace else. There's a bunch of other things that we have, I would say they're not, they're ones I don't think are.

Tim Phelan (25:18)

big

The

other thing that you're being very humble about is that you guys have stuck to that policy. how many years?

Russ Mitchell (25:33)

100%.

Yeah, it's, I mean, we would, I mean, and it's, we talk and I'll go back to the other, it was the other sort of half of your question. I mean, we meet frequently as an ownership group. ⁓ Sometimes including spouses, sometimes not including spouses, because there's different purposes. ⁓ Sometimes with people that are in the family that are not working in the business. Again, we have sort of different groups, but we work these things. And, you know, we, that family

employment policy, even though I just talked about its impact from 35 years ago, we've tweaked it in the last couple of years. I don't remember this precise changes we made, but we've made some changes to it recently, partly because the next generation, this fourth generation, we've got someone who's worked here. My nephew has been here two years and my niece has been here one. And there's a bunch more that may come. I don't know. It's gotta be right. You gotta work five years. You gotta work five years at some place else. And in this end.

You know, ⁓ they get wanted too, so. ⁓

Tim Phelan (26:38)

Well, we talked, you touched a little bit on challenges that you faced in your time, last 30 plus years. Talk about that a little bit more. What were some, I know from my time here with retailers that there had been some serious challenges over the years, including, you know, right after 9-11 and of course COVID and the financial crash and all that. ran a retail business during similar era. was challenging.

What was that like? ⁓

Russ Mitchell (27:10)

Well, I would add those and then the other one I would add, is sort of, you know, it's very specific to our business, but the casual is, mean, we started, we were a men's suit store, right? And, know, this is back in the days of people, know, suits were a uniform, I call it body armor. You know, every single person that got on the train to go to New York City, every one of them, every guy was wearing a Navy or a gray suit, right?

Tim Phelan (27:36)

blue pinstripe

Russ Mitchell (27:38)

Not sort of all of them, like everyone. If you go to the train station today, it's very uncommon to see someone dressed up. And since that was our core business, of all things, that's probably had more impact. Again, we've found ways to sell other things, but it's not the obvious one. ⁓

Well, look, they were all other ones you mentioned. Obviously, 9-11, I remember I do remember that quite a bit and things fell apart very rapidly. But to be candid, that one thing snapped back really quickly. Yeah. Yeah. There were some other the two big ones by far were the financial crisis and in 08-09. Yeah. And then obviously, covid. And they were very different in the sense that the financial crisis, we got no there was no government support. And I don't think

should have been. ⁓ But because ⁓ that one impacted our business quite a bit. And it was the only, really the only time we laid people. We did a lot of things. I mean, I touched, maybe I didn't touch on it. I mean, we were lucky, not lucky. We had done the right things when times were good. And the number one thing, which is hard for businesses, but

You know, when times are good in your business, get rid of debt. know, just, you know, find a way. I mean, we're, we're debt free as a company. I mean, with the exception of if we own a building, maybe there's a mortgage on it, but we haven't had debt in a really long time. you, your options are higher. So in both cases, we were able to,

We were able to sit down and we were driving the bus in both the financial crisis and even in COVID with obviously there was a lot of help from the government, which I think was warranted. And that's a other topic unto itself, but we did a good job. we went into even, remember, I I never worked harder than my, when everyone else was not working, the beginning of COVID, I worked more than I ever worked. worked 24 seven, cause I was reading every bit of legislation out of.

You know, but the nice part about it is we weren't worried about what other people were telling us to do. We could figure out what we want to do. And that comes with not having debt. So I would argue that, and the only way you can not have debt is when times are good, you find a way to, and maybe you don't expand as quickly. Maybe you stop a little expansion. And to be frank, you reinvest more in your business by, you know, trying to produce enough cash flow that you can, you don't need to be borrowing money.

And I understand that that's easier said than done, but it does come with just a commitment to doing it. And I think I'm lucky that we've, we made that commitment a long time ago, actually sort of when I came in. Yeah. Yeah. So.

Tim Phelan (30:41)

And it's good advice. So, I mean, it goes back to what we were talking about earlier, you know, tighten up your leases, make sure you're in good shape there and so that your foundation is solid so that you can then decide, right? When you want to do something, you can dictate your own terms.

Russ Mitchell (30:57)

Look, that's what's worked for us. And I would argue it's the more enduring strategy. You will always find somebody that took a, you because the press likes to write about the person that it really worked who took a ton of chances. And it worked. And luckily for the economy, there's plenty of those people. The problem with that is, you know, many times, you know, many people flame out doing that way more. And so if it's your money and it's your business to us,

A little slow and steady is a better strategy. Yeah. Yeah. Yeah.

Tim Phelan (31:29)

We're gonna wrap it up with just a couple of more ⁓ things, Russ. I don't wanna take your whole day, a whole.

Russ Mitchell (31:36)

As you can tell, I could talk forever on this stuff. I'm very engaged in this ⁓ industry. The combination of retail and family business is something we think a lot about and I spent whole life doing it. So I love talking about it.

Tim Phelan (31:53)

Good, great. Well, let's talk a little bit about family, both family and community you guys are heavily involved in the communities in which you're, you're located talk a little bit about what your strategy is on that and how that sort of has changed or evolved over the years.

Russ Mitchell (32:09)

Well,

I don't think it's changed that much. mean, again, it's a foundational part of our business that my grandfather started. We're obviously, and then obviously, but we are way more involved in the communities that we're local to. It's, know, Westport and Greenwich are the two that were, luckily, you're a Connecticut based guy, so this is Connecticut based talk. So the good news is we're very involved there. And look, there's just a number of us. been, we're lucky we've been.

financially successful as a business. And so we believe in giving back. And, you know, my uncle actually, I would say is the real, he's the real expert driver here. mean, he's involved in everything and still he's really overwhelming. know, he was telling me a story last night about somebody who's recounted a story of meeting Chris Murphy at the Celtics game or at the garden. wasn't a Celtics game. was something.

You know, I remember seeing Ned Lamont at a Yukon game, you know, this is a good, and Ned was starting out and I know he just seems to be everywhere. And he's deeply involved with Sacred Heart University, which, you know, was, has grown just in, I mean, I don't know, you probably don't follow it as much, but what a growth story. John Petillo that is running it really is an amazing guy. Anyway, I don't think there's much to say other than we believe it's, you know,

It's a little part of our DNA. not, you know, I think the business piece, it's nice. ⁓ I think it just sets a tone. think the customers like, they like shopping, like I said before, they like shopping local, they like places that, you know, businesses seem to be giving back.

Tim Phelan (33:54)

I think it's symbolic of what we always argue about retailers, that they're part of your community. They're your neighbors. They're sponsoring your local fundraisers, your little league teams, whatever you have going on in your town, you can always turn to your retailer who's going to be there supporting you.

Russ Mitchell (34:13)

Yeah,

and even if they can't support them, because I think, you it's got to be careful. Not everyone can, you know, again, you remember one thing about this industry when you're starting out, it's thin, right? You're not making it. It's really tough to make money at the beginning. So I think just, you know, but supporting people that are local, because I who wants to live in a town or a community that just made up a bunch of national chains? It's boring. It's just not it's not what you want.

Right. You know, mean, how jazz do you get up when someone's trying to do something new who lives in your local community? I just think that that's the heart and soul of what makes towns and interesting communities. And it's all getting together, which obviously we need now. We need more of it, right? Right. Let's all just agree, you know, we're not good. Luckily, didn't ask one political question because I wouldn't have answered it. But let's just agree that

Tim Phelan (35:02)

No, you.

Russ Mitchell (35:11)

You know, getting along and mixing people together in community based things is part of a long term solution, right? And retail can be part of that. Retail can play its own little part of trying to, you know, just bring people together. Cause that's what, you know, that's community, right? Yeah. Yeah. Yeah.

Tim Phelan (35:35)

I do have to ask you, it's somewhat of a political question, it's not intended to be.

Russ Mitchell (35:39)

No, no, you can ask anything

Tim Phelan (35:41)

What about the tariff debate, which is going on in DC, but it hasn't really impacted consumer prices just yet.

Russ Mitchell (35:53)

Well, for sure. mean, I don't know. our case, I mean, in our case, because, you know, we most of our product comes from Europe, actually. So again, you may, you know, you may not follow. They just they just. Well, they said they said they solved it, but they said they finalized. But my understanding is the details don't exist. But anyways, as of this one, we're recording, you know, it seems like Europe's, you know, was lower than 10.

before everything went to 10%, sort of went to 20, now is at 15. And it seems like that's gonna be the framework. It's very simple, price is gonna go up 15%. mean, whether maybe not 15 excuse me, not 15, more like around 10. Because this idea that everyone else is gonna absorb somehow it's gonna get absorbed. It's just not true. I mean, it's just over time whether...

whether different parts of the supply chain are going to absorb the cost at the beginning, but over time, I mean, this is just my opinion. No one's making a fortune at any step along our supply chain. So if no one's making a fortune and you increase the cost, they're gonna have to raise the price. this has nothing to do with politics. think it's fine. Whether that's good or bad or it's the right decision for the nation, that's the political question. And I think...

Tim Phelan (36:58)

You know,

Russ Mitchell (37:18)

The thing I will say on that is I don't know if anyone knows. I find, you know, I find the more you pay attention to this stuff as a retailer, it's bad. You just stick to what you're good at, execute your own. Your customers are gonna support you if the general prices in our industry are gonna go up. Guess what?

you're going to deal with it and your customers going to deal with it over time. We will find a way through this. That part I feel pretty confident about.

Tim Phelan (37:49)

Good. Good. Let's wrap, let's just wrap it up, Russ, with this. You're still energized, excited. still, you still think that this, ⁓ you know, the future for retail is still strong and brick and mortar retailers still strong. And you mentioned earlier about like trying to promote local retail more. Three or four years, what do you see? Not just for Mitchell's, but in general, what do you, what do you

Russ Mitchell (38:09)

We are-

I just think, first of all, I think the press likes to write about change and yes, things have changed. I don't know. I live in Fairfield right now. If you walk downtown, I've lived there a long time, you walk downtown Fairfield for the retail scene and you want to say, how much has it changed in the last 10 or 20 years? Not that much. I'm sorry, it just hasn't changed that much.

You know, yes, people get some packages from Amazon. You know, yes, they're doing more online research. By and large, there's still, you know, people are still transacting in person. So I think you got to focus on just executing at the level. I don't see anything that's going to change things radically. Like I said, there are some parts of the retail trade. If you were in books at anything, Amazon, just if you're in something that's a

If you're in something that's a pure commodity, I would not say go into that business. You have to find a niche that you can add value. And if you do that, you can have a successful retail business. Don't sell something else that, like I said, the more of a commodity you're selling, the bigger problem you're gonna have. you do have to find some twist. As long as you can find something where you can add value,

I don't see anything that's going to change. And five years is a no problem. I think nothing's going to change in 10 and 20. I'm big on this. I find that things don't change as much as we all think they do. so who knows?

Tim Phelan (39:59)

Stick

to the principles that your grandfather started back in 1958, and you're off to a good start.

Russ Mitchell (40:04)

But yeah, exactly. I mean, look, like I said, we sell different things, but don't get me wrong, you have to adapt. And there's a ton of things I think you have to do. You have to be, I would also argue, I was looking at that just quickly, it's some notes of some things. One thing we didn't talk about is, really have to know your business well. Right? And in our case,

If you just have one store and you're there all day, okay fine, you don't really need something. But if you don't have good systems, as you expand, if you don't know what's going on, you got a problem. And because you've got to be very in tune, this is where the execution comes in. I'm not saying you just can open a store and things are going to be great. You have to know, you've got to be managing your inventory, manage your people, make sure you got the right things.

Don't drop a ball ever. If you say you're to do something for a customer, you better do it. You better have systems that make sure you do do it. So getting the systems piece right today is, and really we say know the score. Everyone should know the score. You know, how you doing? Cause one thing about, there's days you're good, there's days you're bad, there's products you're good at, there's products you're bad at. And if you don't know and correct that stuff, you're going to have a problem. So knowing, having good systems and knowing the score.

is a big part of ⁓ what I think you got to make sure you do. I just, I know I want to end on that.

Tim Phelan (41:30)

No, that is great, great advice, really is. Thank you for that. I mean, we could talk, I'm sure, for another.

Russ Mitchell (41:36)

Yeah, exactly. I can talk forever on that, but it is something that has changed. do think the level of execution today has to be higher than ever.

Tim Phelan (41:48)

And

say more why is that because the customer demands it or is it because the environment

Russ Mitchell (41:53)

Yeah, I I do think if the customer demands it it's like, you know, I mean, if you could if the expectation is like, of course, the expectation now is like an order from Amazon, it shows up that day. Okay. Yeah. But you know, the people want ⁓ they love connecting with people in a real store. But if that store doesn't execute, what I mean by execute, like first of all, you have to have what they want.

You know, if everything you come into our store and everything you want, we don't have in your size. Yeah, we can get it for you. Right. ⁓ Or, or, or we say we're going to, you you, you have a suit that needs, you need to change the sleeve length on a jacket. And it's important. We tell you to come back on Tuesday and you come back on Tuesday, it's not done. Or we don't send you an email that it's done in advance. You know, all those little things today. Yeah. The bar is risen.

And ⁓ again, I come back to that's the difference with one store versus two, you go back to that conversation. If you're there all the time and you got one store, guess what? You can stumble through anything. But when you're not there, all of a sudden, this execution engine, that's retail, right? Because retail is execution, right? You got to have what they want and they want it to be efficient. don't, you know, so.

You got to know anyways, can go on and on. But it's really critical. you know, if you can know, I'm making up in our business, we look at this stuff all the time. You know, our best customers are buying everything, but they're not buying shoes this season. Okay. Well, first of all, did I, do I know that? Yeah. I might know my shoes are down, but why are my shoes? Why is my shoe business down? Who's not buying it? What brands aren't working? What are my most profitable brands? Should I be investing more in them?

all these if you don't, you know, how do I spend less? Do I need to be spending more on this type of advertising? What's really working? All that stuff because unfortunately, know the stats most retail businesses make as a net profit margin, low single digits. First of all, tons of them don't make money. Right. But in order to make low single digits or mid single digits or having even close to 10%, which almost nobody does, but it's achievable, you got to

You need to, it's not one thing. You got to be good at every little piece of that. That's how you add up. If you just look at where you're making money. I'm a real estate, know, boom, boom, boom, boom, boom. And if you don't have good, if you don't know what's happening, it's really hard to do that stuff. So it's all about execution and without good systems and data, it's hard to make sure you're making the right decision. So you make money. Cause at the end of the day, even though it's

And sometimes you don't want to say, you're in business to make money. And if you don't make money, you can't afford to expand. can't afford to retain good people. this, you know, even though sometimes it's not fashionable just to say that, you know, guess what? You're in business to make money. If you don't, you don't have a future for your customers and your people and your family. So, yeah. Yeah. Wow. Sure.

Tim Phelan (45:01)

Hey, can we do this again?

It was great. I appreciate it. There's so many topics we talked about that we could have just.

Russ Mitchell (45:08)

Of course, whatever. Anytime.

Tim Phelan (45:11)

Right.

Best to all of your family.

Russ Mitchell (45:15)

Yeah, I got, got, I was, ⁓ I, ⁓ yes. I, okay. I got to tell you this story. I'm going to add on it. So, I'm, my background is I'm an engineer, a computer science degree. So that's why I'm sort of the systems guy. And I, you know, I'm kind of a tech junkie with everyone. I, know, and the crazy part about it, because I did say, I touched on that. I don't believe change is happening as fast as people think.

So I used to be kind of a naysayer on all this AI stuff. You didn't ask about AI, I expected you might. anyways, ⁓ and I, the last around six months, I have pivoted to say, you know what, there's a decent chance things are going to change really rapidly. I actually don't think they're going to impact our business quickly, but I think there's some parts of society that things could happen quite a bit. So I wake up this morning.

Tim Phelan (45:51)

No, I didn't. ⁓

Russ Mitchell (46:14)

driving in, I got to talk to Tim today to get in my mind. I live about 15 minutes away from the store. And ⁓ I was an early Tesla adopter. ⁓ My original one was, I just bought a new one, but my original one was 10 years old. I'm a, I know Tesla, there's a lot of overtones right now, but I'm sorry. In terms of pure engineering, amazing American product, just amazing American product.

And so just got a new one about, I don't know, three months ago. And guess what? It drives itself pretty damn well. And guess what? The latest version, they have a little button right on the screen. You can say, I want to talk to Grok, which is Elon's latest ChatGPT competitor. So I'm driving to work this morning. The car is completely driving itself the whole way, start to finish.

Tim Phelan (47:09)

knows the way

Russ Mitchell (47:11)

I

know I put in drive to work. Just press one button come out of my driveway. I just press the button stops at every stop sign. press grok I Say I want to talk to grok this nice woman comes on. Hi, you know, hi, mr. Mitchell. No, hi. Hi, Russ You know, what are you doing today? I says well, I'm I'm gonna be on a podcast with Tim Phelan from the Connecticut Retail Network and this is a conversation And I said I said, do know about the podcast and she comes back she tells me all the people

Tim Phelan (47:34)

Yeah, yeah.

Russ Mitchell (47:40)

that had been recently on it. Could you tell me, you know, tell me more about what type of questions you ask. Would you like to prep for this? How can I help you? And I'm saying to myself, ⁓ my God. I know, I I hear you, bro. And here I am driving to work and it said you were working on things like, you know, I...

You know, there's some things with consumer privacy and price gouging. I don't even know if those are things you're actually working on right this second, but he says, Tim's working quite a bit on legislative issues for the 2025 session. I said, well, what specifically is he working on? And we're having this conversation as I'm letting the car drive myself to work. And it's, I mean, I do think a lot about how this could impact our business. And like I said, I think for right now, it's not going to have a big thing.

But man, we may not understand what's coming because it's changed so fast. Because again, my other Tesla, we can't. And when you tried to say drive itself, it was horrible. This one, it's not perfect yet, but it's so close to perfect that you just say, man, things there may be more disruption coming than I think. So who knows? I'll end with that. But I thought you would just be interested that it was.

Tim Phelan (48:58)

That's

right. I use ChatGPT myself. I'll be first to admit it It's a great tool. So AI, will impact the retail industry. We could talk about that. Next time we get together, we could talk about how it's product descriptions and inventory controls and all the other things and how the retail industry is impacted by AI. There's no doubt about it. It may not replace, to your point, may not replace

Russ Mitchell (49:24)

about? ⁓

Tim Phelan (49:28)

the front end employee.

Russ Mitchell (49:30)

very hard. ⁓

Tim Phelan (49:34)

But I might do your financial reports for you.

Russ Mitchell (49:36)

It might, but I gotta tell you, there's some real limitations to that, ⁓ I think. again, I'm, without it really, it's very good at helping you with stuff that relies on public knowledge. Like for instance, it can do quick research on who you are, what you're working on, to the extent that what you're doing is public, right? To the extent.

it's not public, of course it can have absolutely no idea. ⁓ And it's good at things like, I don't know, but I can tell you in the deep levels of how we do accounting, how we approach things, there's such nuance that is based upon our business. It's not gonna understand. I feel pretty confident about this. And maybe I'm wrong. Writing e-commerce descriptions for products, great idea.

Yeah, right. Again, because it's public. It's like this is a you know, this is a jacket or, you know, and there's some there's some shopping things that will be interesting over time, I think. Yeah. But I don't know, I I'm, I'm feeling although I and also today, both my kids, like I said, work in engineering for Big Tech. And this idea that I mean, my son works for Google writing code all day. And this idea, if you pick up a paper, it says that like half the code now

You know, like programming should be the easiest one to do, right? That's, one of the jobs that's going to go away quickest. And they say, you know, at these big tech companies, like 40 % of the code being written today is being written by AI. And my son just says, well, it's just not true. Right. Because if, if you were trying to build a new blank and you wanted to write computer code to do it, you know, spin up a website, no problem. But most companies like ours.

you want to change something that's internal to our company, you need to know what we have. And the problem is what we have is not publicly available for these engines to learn from. So there's all this. It's the same thing if it's the difference between hiring, you know, if you're just hiring a smart person, you hire a smart person and you drop them into here without them, it takes them a long time to know what how we operate. And I don't know how, because we're not going to let

these larger language models, we're not going to let them in and know inside what's happening in our company. No one's going to do that. How are they going to understand how we operate? is a, I mean I'm now getting pretty deep into philosophy, but I think that that part's going to be harder. It's the more, you know, I understand like you're a, know, basic, like legal work. I get it. Okay. You want to draft the will. No problem. Right. Because it's like,

Tim Phelan (52:30)

Trapped in

Russ Mitchell (52:33)

Publicly, there's a lot of information out there. Things that there's a lot of information that are common are dead. And that's where, I'm sorry to go back to even like self-driving. I mean, think about how hard, you know how much money is being spent on self-driving, but it's very common. Like it works the same everywhere. Like stop signs are the same in every part of the country, right? And they're still having trouble making it work. But like in our company, the way we operate is completely different than the way Neiman Marcus operates.

like just completely. the more unique you are, now maybe some other competitor will spin up that could be way more, but the good part about it is no one wants to go into retail business. We laugh sometimes, but what are our advantages? Guess what? mean, know how much new money is going into trying to compete against us right now?

Tim Phelan (53:23)

he wants to do it.

Russ Mitchell (53:30)

I mean, nobody. And again, so that's.

Tim Phelan (53:36)

That's another podcast we get. I get David Lehman, the Lamont's DECD director to say, you got to invest in retail. You got to help promote retail. it's a challenge.

Russ Mitchell (53:48)

he's a great, you know, I met him a long time ago. Maybe I met him through you. Yeah. I might have met him through you. Was it COVID? Yeah. Yeah.

Tim Phelan (53:56)

met

Yeah, he's an old Goldman Sachs guy.

Russ Mitchell (54:01)

No, he you love them. I you introduced me to him and I forgot I I've always said that when people ask me like what do think what's going on in Connecticut and Lamont and all that you know like you know I'm not that connected to it but I said I'd tell you I met this guy one time and I know we know Ned and his we know his wife better actually but you know I don't I don't know him well but I know him right and family a few other family members know him better but I gotta say that guy is his name David is that what you're

Tim Phelan (54:27)

He's no longer there. He's no longer there.

Russ Mitchell (54:30)

David Lehman Yeah. So he is no longer there, huh? That's too bad. That's too bad because he was a... I mean, I only had two meetings with him. I was like, whoa, that guy is... we need more of him. Goodbye. No, I'm... I thought this was sort of like that. Good to see you, Tim. Thanks for what you do.

Tim Phelan (54:44)

All Russ, we got to end.

you

so much. Please, like I said, send my best to the family and hope we'll talk soon. See you.

Russ Mitchell (54:57)

Thanks,

you can go back. OK, bye.