The last time you heard about Maurice Goldberger, Europa Star was grilling him on the secondary, parallel and grey markets. Now, Goldberger, the president of Chiron, Inc., has entered the regular distribution game.
This might seem a little strange, as Goldberg specialised in close-outs, but for him, it makes perfect sense.
“We do a very good job in close-outs, which is also controlling distribution,” explains Goldberger. “A number of our suppliers have over the years asked if we could do their full line distribution. Two years ago, we weren’t ready, but today we are.”
When Goldberger talks about “controlled distribution”, even with close-outs, he focuses on making sure that no one is selling the same goods to the same market at the same time.
“When we do close-outs, if we buy 10 references from a brand, we don’t give 10 references to one customer, we give two references to five customers, giving each of those customers exclusivity for those references. That way they aren’t tempted to reduce prices and they aren’t competing amongst themselves.”
In addition, Goldberg has come up with a system that makes sure that everyone can sell the products that his company, Chiron, has. “The one thing that a salesman hates is losing a sale,” he details. “If there are ten close-outs out there and a retailer wants reference three and he doesn’t have it, we give him access to our Intranet. It tells him what is available and in what quantity. This retailer won’t make his full margin, but he still makes something, and the REAL advantage is faster turnover and service to the end customer. And, at the end of the day, we are not in the watch business, we are in the service business.”
Who is the customer?
Goldberger, who distributes Chronoswiss (North, Central and South America, the Caribbean and Duty Free), CX Swiss Military (North, Central and South America, the Caribbean, Israel, Australia and Duty Free) and S.T. Dupont (Western Hemisphere and Duty Free), has a unique take on who is his customer.
“In a multi-brand shop, the clerk behind the counter is the customer of the brand, whether they know it or not,” he explains. “When consumers walk into a multi brand shop, they aren’t going to buy something, they want to be sold something. The clerks behind the counter have a choice of anything in their showcases which they can propose and encourage, so the clerks will sell what they are most confident in. And, if consumers come in and ask for a certain reference from one of our brands which the clerks don’t have, they can go onto our Intranet, find out where it is and get it, having it there the next day. Now we have a bulletproof system that really works.
“The clerks need to make a living, they don’t care what they are selling and they have a choice of what brands they will support,” he continues. “I am looking to build raving fans, who will be ambassadors for our brands. I have a reputation like this in close-outs, I don’t play any games, so people trust me. I want to build that same reputation in the retailer network.”
For Goldberger, the only difference between regular line distribution and close-outs is price point. “In close-outs, these are goods that are no longer in the catalogue, for whatever reason,” he says. “Full price is sold at full price. It’s in everyone’s interest to sell at full price. The retailers need return on investment. Support the clerk and you have the consumer.
“I have been doing close-outs for 18 years, and I didn’t plan to do full-price distribution,” he adds. “10 years ago, there were two main markets for close-outs – Japan and USA. Now, 10 years later, we have China that is absorbing tremendous quantities of inventory, South America is growing and Europe is selling. And, manufacturers are cutting back on their inventory. It seemed like a good time to move in this direction.”
Goldberger isn’t getting out of the close-out business. In fact, he is still doing close-outs for brands throughout the industry, and he will also handle the close-outs of the brands he distributes. “This allows me to control all aspects of a brand in my market,” he clarifies. “I handle the full price goods and close-outs, though it is two separate sales staffs. We have someone dedicated to the brand in the office, who is always there.”
More brands in the future
Chiron will continue to grow, according to Goldberger. “We are going to be doing more brands, with a goal of five total in the short term,” he says. “I am scalable and I can add more brands as long as they don’t compete. We are going to be working with high end leather companies and high end pen companies as well.”
Goldberger’s offices are in Montreal, Canada but the distribution is all done from 444 Madison in New York. “We want to control the quality, we really want to hold our retailers, our customers, by the hand,” he says. “If it all is from one location, we can control it. Servicing the accounts is the biggest challenge. Distributors typically don’t excel in the service area. Retailers told me that they call other distributors and don’t get any response. What can they tell their customers if they don’t get a response? This is a problem throughout the industry. The consumer doesn’t blame the brand, he blames the retailer. If I am a hero for the clerk, I can be successful.”
Goldberger has a respected name in the industry for close-outs, so it will be interesting to see how it plays out as he moves into regular line distribution. With his calculated and measured approach, he could be very successful.
This article appeared as part of our Market Focus on North America in the August - September 2012 issue of Europa Star. See below for links to the other articles in this Market Focus: