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The Art Material Trade Today

Friday, Feb 26, 2010

Posted By Larry Adlerstein

These are “interesting” times. Pearl Paint, the former dominant player in the distribution of art supplies is on the rocks. They are closing 11 of their 16 stores. From this man’s perspective, here’s the story.

A few years ago a parcel ripped open in a UPS conveyor belt and out spilled hundred dollar bills. So Robert Pearlmuter , a man in his late 70’s went to jail for a couple of years. He’s been depressed ever since (4-6 years of depression). His crime: tax evasion.

I have had almost no contact with the Pearlmuters or their partner Shalish Shaw, but what I know about them I don’t like. Aside from this stealing money that they don’t need, they have a history of arrogance and they do not treat their employees nicely.

Pearl will attempt to reorganize and prosper with the remaining stores. At this point I don’t believe they will survive.

Their management skills have proved inadequate and if my recent experience in Los Angeles is an indicator of the future, I see no hope of improvement.

Here’s the Los Angeles Story:

I was at a trade show in Anaheim, California a few weeks ago. Everyone was talking about Pearl’s announced 50% off everything sale in 6 stores (it later went to 12 of the 16 stores).

Steve and I consulted (Steve Kenney is my General Manager of 17 years) and we decided to look at the cities that were losing Pearl Art Supplies. Los Angeles was a 40 minute drive, so I drove north and Steve flew back east to general manage.

My first stop was Pearl. I asked to see the manager. Lamine and his assistant Doug joined me for coffee and I was very careful to be clear in my intent. I wanted to notify them both that if Pearl Los Angeles closed they could apply for a job with Artist & Craftsman. At that date Pearl Los Angeles was selling everything at 50% off and regardless of Pearl closing or not I was committed to open in Los Angeles.

So, a week ago I returned to Los Angeles to sign a lease. The 50% off sale had gone to 75% then 90%. The morning I arrived there was an 8 ½ x 11 inch sign in the Pearl window announcing that the 90% sale was over and Pearl intended to reopen with fresh inventory in a few weeks.

Lamine, a 12 year veteran with Pearl joined us for lunch. He said he had just minutes ago quit Pearl. A group of bosses from headquarters had come to Los Angeles and they were very critical of Lamine’s performance. Lamine countered that he had no inventory left to sell. I can attest to Lamine’s version. Anyway, at lunch Lamine asked for a job and he’s my new manager at Artist & Craftsman Los Angeles.

Vendors are telling me that Pearl is sending purchase orders for 5 stores (including Los Angeles) with the promise of prepayment before shipment but with no commitment to pay past overdue debt.

We are also actively pursuing two markets. We believe a store on Route 1 North of Boston would be good so as to replace out of business Charette of Woburn and Tech office in Portsmouth.

Also on the short list is Chicago. Without Pearl that sophisticated art market has one independent and corporate like suppliers Utrecht & Dick Blick. Chicago needs A&C and we need Chicago.

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A Tale of Three Cities

Monday, Apr 05, 2010

Posted By Larry Adlerstein

I’m flying home from Miami, the third city I have looked at in about a month. By coincidence, my travels have taken me from depressed, to more depressed to most depressed. You might say my trip has been depressing.

The reason for my journey is to open more Artist & Craftsman Supply stores. I started in Los Angeles and even though the city is on the verge of bankruptcy and Los Angeles says it’s depressed, I didn’t see it, especially after visiting Chicago and Miami.

Chicago’s decline is focused in the loop and downtown and that is where a lot of art students buy & use supplies. Downtown Chicago has already lost a major art supply & to my eye another is in trouble. An easy walk from the Symphony & the Art Institute are dozens of “For Lease” signs.

Miami’s problem is a result of their building bubble. Whereas Chicago is an old city renovated & Los Angeles is appears to have balance of old & new, Miami appears all new, heavily leveraged & vacant.

The Florida broker I was working with told me that recently, the commercial realtors¬ had started doing financial background checks of both potential landlords and tenants, especially if the building was a condo. First time he had seen that in his 35 year professional career, i.e. checking the financial health of landlords.

Well, I am almost back down to Portland Maine & Maine is always depressed. And that’s not depressing at all.
- Larry Adlerstein

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I want you to have children or at least a child

Thursday, Apr 08, 2010

Posted By Larry Adlerstein

Oh yes, they’re a pain in the neck and from the age of 2 til 45, they can drive you crazy, but have one anyway because I have 4.

The Yiddish word is “Nachos.” The ch is guttural like you’re about to throw up. Nachos is the joy that can only come from children, a parental pride, like maybe it was worth it after all.

I see less and less long term investments and more & more short term gains. There is no longer term investment than a kid. Try it, I recommend it and I’m an expert at trying.

- Larry Adlerstein

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Taking Inventory

Thursday, Apr 08, 2010

Posted By Larry Adlerstein

Now that’s a yawn of a title. I’m getting tireder and tireder.

I’ve really put it off for 27 years. Oh, Artist & Craftsman has an inventory. Actually we have 4 of them.
Our point of sale software (what is retrieved, vouched in & then sold through our computer cash register), that’s one inventory.

A&C’s accounting software, i.e. the checks we write and the deposits we make. That’s a 2nd inventory.
No relation to inventory #1. (I can see your eyes droop)

Then we have a swarm of people with little computers and they swarm the stores. This inventory #3 is always higher than 1 & 2. We think people steal in at midnight and give us art supplies.

#4 is best. Steve and I visit a store and I say – “Looks like 175k, what do you think?”
“No Lar, there’s at least 200 thousand.”
“All right I’ll meet you at 185.”

Ultimately, we’re putting an end to all of this inventory fun.

We hired Shafiq, a programmer, and he has invented a program that lets A&C’s computer talk to our vendor’s computers so that when they ship to us it’s easy to add the shipment to our inventory. 

Which inventory? Inventory #5. We started to count all over again.

- Larry Adlerstein

0 Comments | Posted in Notes From Larry

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