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The Molokai Business Model

How local retail stores are staying afloat in a small market

On a typical day, you can cruise through Kaunakakai’s main street in less than a minute. With three compact blocks of stores and eateries, owners must do business with a special delicacy. As the local retail industry grows, they’re navigating new challenges of unexpected competition but are mining their talents and aloha spirit to survive.

In Molokai’s economy, many customers “live paycheck to paycheck,” explained Michelle Hiro, who opened Molokai Cellular in 2008. Business owners said the key to co-existing in a compact, slower-paced setting is respecting each other’s corners of the market.

“For me, I do not wanna be selling something else somebody else is selling,” said Hiro. “… I would rather bring in stuff that people do not have.”

Wailani Tanaka, owner of Something for Everybody, explained that she checks in frequently with many other business owners in town. If they get wind of one person’s idea, she said, they try their best not to duplicate it.

Unfamiliar Territory

In October, Jeans Warehouse entered the Molokai retail scene. With 29 total locations around the state and Guam, the Hawaii-based clothing store is one of the few retail chains on Molokai, bringing in a wide selection of clothing that shoppers said would save them trips off-island. Molokai Middle School student Kaitlin DeRouin, who waited in line on the store’s opening day, said that she’d shopped at the Jeans Warehouse on Maui and was glad Molokai finally had one on island.

However, for small local businesses not used to competing with larger chain corporations, the situation presented a unique challenge.

“A lot of businesses separately sell different things, but Jeans Warehouse sells everything that we combined sell,” said Mahina Lopes, who co-owns Malama Surf Shop with Tete Dudoit.

With clothing and accessories for juniors, women, men and keiki, Jeans Warehouse is “a one stop shop,” said Hiro.

“That is really what Molokai needed in that sense, something where there is a lot of variety, but not over-saturating the entire market of the existing stores,” said Tanaka.

Some businesses have noticed little to no changes in their sales. Maria Watanabe, owner of Imports Gift Shop, said she hasn’t seen a change in her store’s numbers. Lopes said she and Dudoit will have to wait for the busier months in winter and spring to determine whether or not their sales are affected by the presence of a larger chain store.

However, some stores have already reported declines in the last three months. Molokai Cellular took such a hit that Hiro said she considered closing down. The shop is located in the same building as Jeans Warehouse, and, like its neighbor, sells phone accessories.

One business owner who also sells low-priced clothing and wished to remain anonymous said she had to temporarily close up shop while she reworks her business plan. However, despite their struggles, most owners reiterated their desire to show aloha towards each other.

“I know I affected other businesses,” said the anonymous owner, who first opened her shop eight years ago. “But they never made me feel bad about it.”

Jeans Warehouse Chief Operating Officer Cindy Mikami, who has worked for the company for 31 years, said that the company can’t really adjust their merchandise and sell only a portion of their products, which could cause less impact to fellow Molokai retailers, because they have to buy in bulk.

“We could look at it, but it is very difficult because we buy for all our stores,” said Mikami. “We get good prices because of the quantity we buy.”

Tanaka, who has also seen her sales drop, nonetheless said she sees the logic in bringing in a larger company. Multiple Molokai businesses closed up shop in the same location in the past, and a store like Jeans Warehouse has the resources to pay its bills.

Meanwhile, Mikami believes in the abilities of local businesses to bounce back.

“I think competition is good, and I know the smaller retailers were wondering what’s gonna happen, but I think if they focus on their niche, they could still be successful,” she said.

It’s exactly what Molokai’s businesses are beginning to do.

Fresh Methods

Tanaka plans to start offering two new clothing lines each year. The newest design, titled “Aloha `Aina,” is a collaboration between Tanaka; Henohea Linker, who creates jewelry as part of her business Kumu Henohea Native Bling; and Maile Naehu, who makes upcycled scarves for her business Leialoha by Maile.

The anonymous business owner is turning to her personal talents to create more handmade products, including repurposed clothing.

“It just so happens I’m not the most affordable anymore,” she said. “Sometimes you have to accept that and figure out something else.”

Hiro switched from Mobi PCS to Boost Mobile, allowing her to sell a wider variety of phones, including waterproof models that she said local fishermen could use. She brought in Android tablets around Thanksgiving and sold four within half an hour.

For Mikami, meeting the community’s needs is also the focus for Jeans Warehouse. When the store first arrived, she and several other employees went around town talking to residents.  Men’s socks and underwear were in such high demand that Mikami said they made sure to include them in their Molokai store. Mikami said the store’s sales have been “exceeding expectations,” and she hopes the company can continue to sell its wares there for a long time.

As the retail industry continues to develop with more businesses and different competition, local business owners are having to adapt and invent new approaches. But one thing is staying the same: their Molokai brand of business that always keeps the community in mind.

“I definitely see all of the small businesses revamping to what they need to be,” said Tanaka. “…Whatever those new needs are, I hope that the existing small business owners will find that.”

 

 

 

 

 

 

 

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