How This Lingerie Store Boosted its Bottom Line, Despite the Downturn

Journelle in New York City is no ordinary store. Among its intimate apparel store peers — who are in the business of helping women find the perfect undergarments through a sometimes thrilling and at other times exasperating process — Journelle stands out.

Just ask its customers, like the woman who not long ago walked into a Journelle store to experience the science of a bra fitting, a process than usually takes at least 20 minutes of a sales associate’s time. After a consultation, several measurements, and trying on a range of options from different brands, the happy customer left the store feeling fabulous — and with lots of purchases in tow. In fact, this particular customer was so thrilled with the knowledgeable and empathetic service she had received that despite being a hardened New Yorker, she returned 20 minutes later with a cup of hot tea and bag of cookies as a thank you for the sales associate.

There is also the case of the loyal elderly customer who could no longer make it into any of Journelle’s locations. Determined not to lose her as a customer, and undeterred by the complication that the store did not stock the item that worked best for her shape, the Journelle sales team resorted to online shopping to find the ideal fit. Once the items arrived, a sales associate took them to the customer’s house for a personalized home fitting to ensure that she got a perfect fit that made her feel happy, comfortable, and confident. While this may not have been one of Journelle’s most profitable customer interactions, it was conducted in faithful adherence to the company’s strategy statement to “make women feel amazing every day.”

While women make up most of Journelle’s customer base, the company makes an effort to make men feel important, too. Men may love the end result of seeing their significant other in lingerie, but the process of shopping for it can be a very confusing and awkward experience. What to buy, what size, what shape, what material, what style… I have been married for 17 years, but this still trips me up. In order to educate men on how to shop for lingerie and to increase their comfort with the process, Journelle holds scotch tastings for men at their Union Square store. The gentlemen-only night incudes a short, simple tutorial from experienced Journelle sales staff and free time for shopping in a safe environment where the men can ask any questions they want — and, of course, taste lots of scotch!

Who knew that shopping for underwear was an experience worth perfecting? What is even more unbelievable is that Journelle opened its doors in 2007 — when bankruptcy for small businesses skyrocketed. From the first quarter of 2007 to 2008 bankruptcy filings for small businesses grew 33%. From first quarter 2008 to 2009, bankruptcy filings leapt by 75%.

Yet Journelle not only survived the recession, but thrived through it, experiencing double digit growth over the period. While many companies decided to cut costs, batten down the hatches and conserve cash in response to the bad economy, Journelle’s CEO, Claire Chambers, told me she saw the recession as an opportunity: “I realized that woman will still purchase undergarments but they would have very little tolerance for anything subpar, including the shopping experience. This was the time to truly stand out from our competitors, and that is what Journelle had to do if we were going to get the sales that were out there. So I doubled down on the customer experience and the sales associates.”

Management set out to build the best customer experience possible by instituting a training program for sales staff and fully committing themselves to its implementation. Claire recalls: “I felt that the kiss of death would be for Journelle customers to have a mediocre experience while being in a recession.” If they encountered barriers to an outstanding customer experience, they removed them. For instance, when customers expressed a desire for more time with sales associates, Journelle reorganized its operations and stripped away all non-customer facing activities (e.g. inventory counting) from sales staff. While competitors were reducing headcount, Journelle hired additional sales associates to ensure they always had trained experts on the floor to assist customers with virtually no wait at all. The results are staggering: same-store sales are up 55% from the first half of 2011 to the same period in 2012.

Journelle’s success through one of the worst recessions in history is not an isolated incident. Several companies came out of the recession stronger than they were when it started. In order to find what actions these successful companies took, PA Consulting Group (my employer), working with the authors of The Economist book, Managing Uncertainty, conducted a comprehensive survey. What we found was literally a blueprint for success. The findings revealed that a group of companies emerged with higher total shareholder return (TSR) than their peers post-recession. Here are some of the practices that those companies, just like Journelle, followed:

• Companies that had higher total shareholder return prioritized engaging, enabling and mobilizing staff and attributed their success to empowering staff to focus on their core activities.
• Companies that made savvy business decisions were aware of, and responded to, their market and competitors’ actions.
• The most successful companies had a positive attitude and an optimistic mindset that enabled them to see — and to seize — the opportunities presented by the crisis.

Some companies that came out of the recession stronger than they went in. Conventional wisdom would suggest that these companies were the cautious ones: they must have cut their costs and expenses, reduced their headcount. But this time conventional wisdom was wrong. The research found that 200 of the best-performing companies in the downturn were the visionaries. They recognized that this was not an “ordinary” downturn and they threw out the rulebook.

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