Joseph Sitt, chairman and CEO of New York-based Thor Equities, got an early lesson from Sam Walton.
Sitt's dad, a clothing salesman, let Joe tag along on sales calls when he was a kid. One client was Wal-Mart and, as the younger Sitt watched Walton personally tracking daily sales, he observed how differently Wal-Mart was run from other retailers he saw. He recalls cleanliness, friendliness and good prices. He also remembers his father's prediction that one day Wal-Mart would be the biggest retailer in America.
It was an experience that still fuels the 38-year-old's passion for retail. So did growing up in a tough Brooklyn neighborhood that lacked retail options. “Being frustrated as a kid that I couldn't find decent retail was one of the biggest things that made me an advocate for bringing quality retailing into urban areas,” says Sitt.
His earliest venture was developing a 12,000-sq.-ft. retail project on East Tremont Avenue in a rough Bronx neighborhood when he was still in his 20s and studying at New York University.
Other endeavors have included founding Ashley Stewart Ltd., a store specifically for African-American women. He eventually sold off more than 90% of Thor's interest in the company. During his leadership, the store and its affiliates generated $300 million in sales in more than 300 stores. Thor also bought and sold The Children's Place retail chain, which now consists of 629 stores nationwide. Thor has acquired or currently has under contract 5.5 million sq. ft. Projects in the works include Gentilly Woods in New Orleans, Military Circle Mall, Norfolk, Va., and an 80,000-sq.-ft. retail and office project on Chicago's State Street.
The company is also in the midst of revitalizing the 475,000-sq.-ft. Gallery at Fulton Street in Brooklyn, striving for an upscale ambiance. The redevelopment has already attracted at least one big national retailer, Forever 21, which signed a 12-year lease. “This has been a tremendously underserved market,” Sitt comments. He estimates that more than $1 billion a year in retail spending has been traveling outside Brooklyn.
“So many urban strip centers are run down to the ground. It's disgusting,” he says. “People keep shopping at those places because there's nowhere else to go.” Yet retail turnarounds don't have to cost big bucks. Cleaning, repaving parking lots and installing lighting and music systems can transform an ailing property and the surrounding community. “It's spending pennies to make dollars,” adds Sitt.
Who's the customer?
Rather than drop-kicking a suburban operation into the inner city, Sitt spends time hanging around with local leaders and in neighborhood churches, restaurants and clubs to identify residents' ethnic identities and preferences in music and clothing. Then Thor develops retail that caters specifically to local needs and tastes. “It's important to inculcate into our heads an understanding of who that customer is,” Sitt says. For the Ashley Stewart stores, for instance, Thor listened to what aesthetics its target customer wanted. The store designs keyed into those desires with upscale leopard carpet, gold trim throughout and walls with a mahogany appearance.
Sitt calls it “Bellagio-ing” (referring to the chi-chi Las Vegas hotel) inner city stores — providing a first-class ambiance in areas that traditionally have been shunned by developers and retailers.
The development process is personally satisfying to Sitt, especially when customers kiss and thank him at grand openings. Thor's approach also fits with the company's earliest mission, which is embodied in its name. Thor, a Norse god, aims to defend the plant earth. The god's objective correlates with Sitt's aspiration of preserving and gentrifying urban areas. “People appreciate what we bring. The sales tax base jumps and projects spur the economy and bring jobs,” he says. “And when people shop and keep recycling dollars in the community, it furthers its growth.”