Herb Philipson's stores stick to the basics

On the face of it, Herb Philipson's Army and Navy stores have changed little in the last 53 years.

You will still find such dependable local items as Duofold thermal underwear and well-known national brands such as Woolrich, Levi, and Carharrt, and other outdoor clothing and gear products that have been around longer than the current owner himself.

"You'll find the same products today that were here when my father started the business," says Philipson's owner, Gary Philipson. "They're not the same companies that they were 50 years ago-they've had buyouts and restructuring-but we're still the same company."

Doing business the same now as they did when Herb Philipson founded his store in Rome in 1951 is a source of pride for the younger Philipson, 47. Despite the rapid changes in the retail scene over the decades, and particularly in the Mohawk Valley in the last six months, Herb Philipson's Army and Navy Stores is still a family-owned company whose philosophy has never wavered.

"Our everyday prices, for example on Levi jeans, are the lowest around," Philipson notes. "Other stores occasionally have sales that match our everyday prices, and we occasionally run sales, but we don't have as big a markup to begin with. We did it this way even before Wal-Mart."

Herb Philipson's now boasts five stores in New Hartford, Oneida, Herkimer, Watertown, and Rome, where the corporate headquarters are also located. The company's distribution center is in Oneida.

The original Philipson's Army and Navy store was founded in downtown Utica by Herb Philipson's father, Louie, and brother at the end of World War II, when the U.S. government began disposing of surplus military clothing and equipment.

Herb-Philipson grew up working in the family business, Philipson's Army and Navy Store, but then branched out on his own by establishing Herb Philipson's Army and Navy Store in Rome as a separate entity in 1951. Eventually, the store began carrying more sporting goods and catering to suburban customers.

Philipson explains, "We're no longer an Army and Navy store, but we kept the name because it connotes value. My father always marked items at a lower markup."

When it came to advertising, "Uncle Louie" was the "showman" of the family, Gary Philipson recalls. In the 1970s and 1980s, however, Herb Philipson inherited the mantle. He posed for TV and print commercials in red boxer hunks and boxing gloves as the self-proclaimed "Price Fighter."

Herb Philipson died in July 2003 at the age of 80, one year after Gary came on board as president. Gary's younger brother, David, who was a sales executive for Philipson's, died in 2001. Gary has two sisters who live out of the area.

Gary Philipson never had any doubts that he would take over the family business. "I grew up in the business, and worked there during my school vacations and summers," he says. "I thought I understood the business well and would enjoy doing it. As in any family business, you have your hand in a lot of things like buying, advertising, and finance. The work is always interesting."

Philipson, who shies away from the title of company president, values his father's influence on him. "I was lucky to have him teach me good American values: how to treat people properly, to be a good buyer, to have a good work ethic, to work late if you have to, not to be a big shot to be responsible, and pay your bills on time."

While the product lines will inevitably change to meet consumer tastes, the company's business philosophy remains rock solid, even in the face of new competition. A few months ago, Gander Mountain, a national sporting-goods chain, moved into the new Orchards retail development in New Hartford. Gander Mountain specializes in much of the same high-end hunting and fishing apparel and gear as Philipson's.

Shortly after Gander Mountain's arrival, Philipson's regained the spotlight by moving from one end of the New Hartford Shopping Center to the middle, getting better exposure while expanding to 50,000 square feet from 35,000 square feet.

"Anyone who had shopped in our store before knew that we were overstuffed," says Philipson. "There was no particular reason [to move], except we are better able to show our merchandise properly. The New Hartford store [formerly Ames] was available, and we didn't hive to leave the location we had been in for 25 years. Now it's a centralized store."

Another shoe dropped when Klein's All-Sports, a Utica-based fixture since 1948, announced in early December that it was going out of business and closing all 12 of its stores in Central New York and Massachusetts as of Dec. 24. Klein's located in Sangertown Square, a few blocks from Gander Mountain - was bustling with shoppers at Christmas time, but it was too late to save it. Klein's President Andrew Klein reportedly blamed competition for the closure.

Philipson admits he was caught by surprise by Klein's announcement. "I feel bad about them," he comments. "They're an old family business and had been around as long as we have. No one wants to see the day when all you have is national stores here."

Meanwhile, Dick's Sporting Goods is rumored to be moving into the Mohawk Valley marketplace in the spring.

Gary Philipson feels that throughout the decades, Philipson's has never overreacted to the competition. It keeps its eye on the ball and sticks to its own game plan.

"We've faced a lot of competition in the last 50 years," he notes. "But we ran our business the best way we can. Our area is not a growing area - and we seem to be going in the opposite direction - and that makes it tougher to do business. We still want to appeal to our customer base."

Being the biggest player in the market is not a goal of Philipson's, which has just under 200 full-time-equivalent employees. Four stores appeared to be the limit until the company opened its Watertown store in 2003. Nevertheless, having five stores still allows for plenty of hands-on supervision. Either Philipson or his operations director, Guy Viti, will visit each of the stores at least once a week, sometimes daily.

Mike Palmer, chief financial officer, points out that, Herb Philipson's is small enough to react more quickly to trends than the big, national chain stores, and is still able to provide the "personal touch."

Philipson says he is committed to buying good quality products and offering them at a better price than his competitors.

"As a buyer, you have to have a good feeling for the product. You have to know who to trust. It's almost a sixth sense. You have to be in the market and you have to read and see what's going on in the market, for example with hunting apparel or sneakers. You have to know what's successful in the store and what's not."

The success of Herb Philipson's Army and Navy Stores, he adds, is due to getting the best brand names at the best price. "We're not offering the cheapest quality or the cheapest price," Philipson says. "Sure, you can [get] a shirt for $3 at a discount store, but we will give [customers] the best quality shirt at the best price."

He described the Christmas season as "decent" in lieu of getting actual sales figures later this month. "Our business depends on the weather, and we didn't have the snowiest or coldest November and December," he says. CEO in focus

* Name: Gary Philipson

* Title: Owner/President

* Company: Herb Philipson's Army and Navy Stores, Inc.

* Age: 47

* Education: New Hartford High School; Union College,

Bachelor of Arts (History)

* Hometown: New Hartford

* Family: Wife, Lisa; Children: Evan, 15; Jeremy, 12; Rachel, 9

* Hobbies: Spending time with family, fishing, golf

* Favorite books: Anything in historical fiction

Copyright Central New York Business Journal Jan 07, 2005
Provided by ProQuest Information and Learning Company. All rights Reserved