United Apparel Liquidators

Bill and Melody Cohen met in $1968,$ when Melody was in high school and Bill was co$-$owner of a clothing boutique where Melody liked to shop. Several years later, the two married and opened a discount retail clothing store in Houma, Louisiana. Melody excelled at sales and customer service, and Bill was an expert at finding the right merchandise at bargain prices. Their store prospered until large chain retailers noticed the growth in the discount market and began selling inexpensive, mass$-$produced clothing. The Cohens failed to see the tidal wave of stronger competition until it washed over them. By $1979,$ their company was drowning in debt, and its sales were plummeting. They sold everything and moved in with Melody$$s mother in Mississippi.

The entrepreneurial couple was not willing to give up$,$ however. The next year, they decided to open United Apparel Liquidators $($U$.$A$.$L$.),$ purchasing excess inventory of upscale fashions from other retailers and distributors. Melody operated the store in Hattiesburg, Mississippi, and Bill traveled to New York City$$s fashion district, where he built a network of contacts with retailers and designers, offering to buy any of their leftover merchandise.

The Cohens expanded U$.$A$.$L$.$ into other small southern cities, such as Nashville, Tennessee, and New Orleans, all the while being careful not to take on debt. With fluorescent lights hanging from chains and concrete floors, their stores more closely resembled Goodwill stores than the luxurious department stores in the big cities that originally sold their merchandise. The first U$.$A$.$L$.$ store was in a building that no other businesses would rent because it sat only $10$ feet from a railroad track. Their newest store, their sixth, which is located in Brentwood, Tennessee, is in a strip mall in a building that formerly housed a car rental agency and includes a large deep freezer that no longer works, which the staff uses to store shoes. Although many have questioned their choices of locations, the Cohens$$ location decisions were intentional. Choosing small but growing southern cities minimized the competition from the large retail chains that had been the undoing of their first business and kept them off the radar of image$-$conscious fashion brands such as Balenciaga, Givenchy, Helmut Lang, Dolce & Gabbana, and others, whose clothing, shoes, and accessories they were selling at unbelievably low prices. Bill says that fashion brands could generate sales from leftover goods without damaging their images by burying their goods in the rural South. For instance, one of the three Nashville U$.$A$.$L$.$ stores had a Thierry Mugler gown that originally retailed for $$2,960$ priced at just $$740.$ A pair of Manolo Blahnik leopard$-$print heels that listed at $$1,000$ sold for $$224.$ An ivory$-$colored Oscar de la Renta dress trimmed with elaborate lace had an original price tag of $$3,500$; U$.$A$.$L$.$s price: $$733.$ Shipments arrive five days per week at the U$.$A$.$L$.$ warehouse in Hattiesburg, and employees open the boxes with the enthusiasm of children on Christmas morning because they never know what$$or how much$$is in them. Because U$.$A$.$L$.$ is a liquidator, the randomness and mystery of its constantly changing inventory adds to the sense of adventure that customers feel when they shop.

The Cohens had opened a store in Metairie, Louisiana, but Hurricane Katrina forced its closure, and they decided to venture into a higher$-$profile location in the New Orleans French Quarter. They also have a store in Austin, Texas, and they are ready to open new stores in other southern cities but are not sure which ones offer the best opportunities. The Cohens, who are semi$-$retired, now count on their former daughter$-$in$-$law, Stephanie Cohen, to manage U$.$A$.$L$.$s operations. Although U$.$A$.$L$.$ has a Web site, the company does not advertise but instead relies on word of mouth to draw customers. Some customers drive many hours and others fly from major cities across the United States just to shop at U$.$A$.$L$.$