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Pugliese: Duluth Trading Co. expanding despite recession

By Brian E. Clark
For WisBusiness.com

The construction industry may be in the tank, but officials with Duluth Trading Co. -- which sells rugged clothing designed for and tested by tradesmen and women -- is continuing to thrive.

Stephanie Pugliese, a vice president with Belleville-based Duluth, says the catalog and online-sales company has increased its sales seven fold in the past eight years.

And while she won’t release figures for the past year, she said owner Steve Schlect was confident enough in the retailer’s future to open its first bricks-and-mortar store in Mount Horeb earlier this month.

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“We’ve actually benefitted (during the recession) because customers are looking for something more durable and not faddy,” said Pugliese, who has been with Duluth for two years.

Her responsibilities have grown in the past 24 months and she now heads the company's creative, marketing and quality assurance departments. That means she is in charge of clothing and other products from the "ethereal" idea stage all the way to displaying items on store shelves or in the catalog.

Before Duluth Trading, the Pennsylvania native worked for Lands' End in Dodgeville and Ann Taylor in New York. (She also ran a children’s book store in a village near Naples, Italy between her Manhattan and Wisconsin stints, but that’s another story.)

“None of us are immune to a more-cautious consumer today,” she said. “But we offer products that are right in line with the way the consumer’s mindset has gone. He wants something that has great function and delivers on its promises, something that's not just a fashion fad or is in interesting one day, but useless the next.”

And, truth be told, Duluth sells its products to a lot more customers than just construction workers.

“We have a relatively broad base of customers,” she said. “Perhaps broader than most people would anticipate by looking at the core types of products we sell, or the types of messaging we send out or even some of what we call hard lines like tools we add to enhance the brand.

“By and large, we have a large segment of customers who aren’t specifically in construction or the trades who have not been as affected by the economic downturn as the construction industry.”

The company, known for its quirky and entertaining catalogs, is now entering its busiest time of year. Its 140,000-square-foot warehouse -- which has more 200 employees -- will soon be adding staff and sending out tons of products for the holidays.

But Pugliese said Schlect wanted to open the Mount Horeb store to help “give our brand some traction” and gain market share. He also did it to permit customers -- at least those who live in or are visiting southern Wisconsin -- the opportunity to touch, feel and try on Duluth Trading’s clothing.

“That’s a challenge for any direct retailer,” she said. “Our customers were very vocal about saying they want to try things on. So this had been on the back of our minds for a while.

“We have innovations and wonderful details like underarm gussets, crotch gussets and bi-swing backs that we build into the product. We know that ultimately in a retail setting we will get to show (those details) to a customer in an even better way.”

Pugliese said the former National Mustard Museum building on Main Street in Mount Horeb was a natural for the Duluth Trading retail store because it had been a mercantile business for decades. (The mustard museum is now in Middleton.)

“It was the ideal location because many people remember it as a place where people spent Saturday afternoons finding things they needed to work on a project,” she said.

The 7,500-square-foot Duluth Trading store -- which was built in 1882 -- also features hundreds of antique woodworking and other implements that are part of the Wally Keller Tool Museum.

“Wally was a wonderful, famous face in Mount Horeb because of his personality and because he did a lot of sculptural and folk art work,” she said. “He also happened to have a 3,000-piece tool collection than spans the Civil War period to the 1950s. Steve met Wally about 18 months ago and was intrigued by it.”

When Keller was killed in a tractor accident last year, his widow told Schlect that her husband had hoped the collection would stay together.

“Steve decided to buy it and ultimately display it in a retail environment,” she said. “It all blends together. Our customer is the kind of guy who likes to fix things and appreciates a job well done and craftsmanship. So this is a great addition to the store.

“Going into an environment to see those tools, the symbol of innovation through those decades, is fun and exciting for tool collectors and even moms and kids who are in awe of all the diff designs of pipe wrenches.”

Pugliese said Schlect chose Mount Horeb because he lived there for 12 years. It was also where he started the Gempler’s outdoor supply company 25 years ago.

“In a way, he was coming back to his roots,” she said. “He still has friends there and it was a wonderful opportunity to drive business to the community as a whole. Steve felt strongly about using a local architect and contractor, too.”

Though 85 percent of Duluth Trading’s customers are men, Pugliese said she sees a great deal of potential to increase sales to women.

“That’s one of our higher growth areas,” she said.

Pugliese, who spent three years with Lands' End, said there are some obvious similarities between Duluth Trading and her old employer.

“One of the more obvious comparisons is that we were both founded on the concept of high quality goods at a fair price,” she said. “Others are that we're geographically close and have roots in direct catalog and web sales.”

But she said Lands' End has a major retail presence in Sears stores and the number of products Lands' End sells is significantly greater than Duluth Trading’s.

“So I think for me, the biggest bonus for being at Duluth Trading is that we are a brand that still has so much potential,” she said. “There are similarities between the two companies, but differences as well.

“Ours is a brand to watch. Opening the retail store is a symbol for us of the beginnings of how far we can go. We’ll see about additional stores.

"We are going to learn quite a bit in coming months in Mount Horeb. We’ll refine the retail concept and that will help us understand what expansion may look like.”

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