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KLMNO WASHINGTON BUSINESS A changing retail landscape


GEORGETOWN REBOUNDS


Store space that failed in recession starts to refill


BY DANIELLE DOUGLAS


Capital Business Staff Writer On a recent Friday night, the


sidewalks of Georgetown were crowded with trendy twenty- somethings, business types and a few mystified out-of-towners caught in the traffic created by Fashion’s Night Out. The event, an outgrowth of Vogue editor Anna Wintour’s effort to gin up business for recession-wary re- tailers in New York City, brought together more than 80 stores, restaurants and salons, with pro- motions to lure passersby. Much like retail hubs in the Big


Apple, Georgetown witnessed revenue decline and an increase in vacancies during the economic slump. But more recently, area retailers are reporting an in- crease in sales, and leasing activi- ty is picking up. Time will tell whether the up-


tick leads to a full recovery. For now,Georgetownoffersawindow into the changing retail land- scape, particularly on the higher end. Setting up shop in the Dis-


trict’s fashion Mecca is no guar- antee of financial success. Just ask the wave of retailers, like Ann Taylor, Pottery Barn and Puma, that packedupandleft in the past two years. A number of these closures, however, cleared the way for a few well-received addi- tions, such as the ever-popular Apple store. In many ways, the recession set into motion the re- newal of Georgetown’s retail landscape, which some observers say had become a bit dull. Against the backdrop of the


blaring music and undulating spotlights at Fashion’s Night Out,


Georgetown was anything but dull. Streams of pedestrians flowed in and out of area staples. “Georgetown is back,” said


Banana Republic store manager DuWayneBurge. “Alot of retailers scaled back as the economy soured, but [now] one store after another . . . they’re coming.” In fact, 39 stores shuttered in


2009, sending vacancy rates soar- ing to 12.5 percent at the close of the year, a far cry from George- town’s usual availability of 5 per- cent to 6 percent, according to CoStar. But as those businesses closed, 26 new ones sprung up in their place. Even this year, with the loss of 23 more stores, 37 new retailers signed on to launch Georgetown locations. Vacancy, as of early September, has trend- ed down to 5.2 percent. “As the challenges in the econo-


my highlighted that the same old stores that exist everywhere in the region couldn’t, or didn’t want to, stay in Georgetown, it created an opportunity for the more unique stores — ones that aren’t represented throughout the region multiple times — to come in,” said retail broker John Asadoorian of Asadoorian Retail Solutions. A few notable high-end retail-


ers, such as Michael Kors and Diane Von Furstenberg, are said to be looking at the neighbor- hood. Marcie Connolly at the commercial real estate firm East- banc said there is a growing inter- est among designers to locate in Georgetown. Of the 40,000 square feet of vacant space she had under management in 2009, about 8,000 square feet remains on the market. Some of that space was ab-


sorbed by Crate & Barrel’s off- shoot CB2,whichjust inkedadeal for 13,000 square feet at 3307 M St., where it will debut next spring. Meanwhile, J. Crew spinoff Madewell will open by year’s end in Puma’s former digs at 1237 Wisconsin Ave., and Brooks Brothers will take over Pottery Barn’s 22,000-square-foot store at 3077MSt. in early 2011.


Madewell, with fewer than 20


locations nationwide, seems more exclusive than its pervasive kin, J. Crew. Within the past decade, a number of mall favor- ites, like Levi’s and H&M, have absorbed space in Georgetown, with mixed reviews. Some bou- tique owners say the presence of national chains has been a bless- ing and a curse. Chains can at- tract a broader consumer base as well as “take away some of the identity of the area,” said Churek Djamgerchinova, owner of San- garee, an upscale women’s cloth- ing store. Less than 40 percent of the 493


stores in Georgetown are nation- al chains, according to James J. Bracco, executive director of the Georgetown Business Improve- ment District. “By and large, we still have the


unique boutiques and local entre- preneurs,” he said. “We’d love to keep it that way, but the reality is the national retailers want to be here because this is the style district ofWashington.” Larger retailers not only have


the desire to locate in George- town, but also themoney to do so, a necessity in the city’s priciest retail corridor. Georgetown, de- spite the leasing lull at the height of the downturn, still garnered the highest retail rents in the Washington area, never falling below an average $40 per square foot in the past two years. Rents can,andoften do, climb as high as $100 a square foot. Sluggish sales, underscored by


high rents, helped drive a few independent retailers, like Up Against theWall, out of business. Other indie stores, however, have managed to thrive in the down- turn by appealing to theWashing- ton area’s growing creative class — the artists, designers and techies with edgy tastes. Such has been the case for vintage store Annie Creamcheese on M Street, which recorded its highest sales in 2009, according to co-owner Garrett Bauman. “People come for the unique- ness of what we offer,” he said,


adding that revenue has in- creased 30 percent thus far this year.


Bauman’s neighbors did not


attest to a similar rise in sales, but they generally agreed that con- sumers have loosened their purse strings. “Our customers are loyal and they are starting to spend again,” said Jenny Zinn, manager of Betsey Johnson, which has been in Georgetown for 16 years. Some of the newer kids on the


block, however, have yet to con- nect with area shoppers. Despite having a strong following in New York City, Spanish shoemaker Camper, for instance, has seen the same demand inGeorgetown in the four months since it opened. “People are a lot more conser-


vative here,” surmised Camper store clerk Kate Peterson, stand- ing in a empty store on a Friday night. “Business has been good, but people just aren’t used to our style.” Asadoorian says that while it


may initially be difficult for some of these trendsetting stores to penetrate the market, as more of them set up shop, they will create a fashion-forwardshopping expe- rience unique to Georgetown. A part of that shopping experi-


ence will eventually be shaped by the redevelopment of the embat- tled Shops at Georgetown Park, which has sat half empty for months.Newowner Angelo, Gor- don & Co., who declined to com- ment for this story, is said to be repositioning the property to at- tract newtenants. A deal to have Bloomingdale’s


bring its much-anticipated SoHo prototype to the enclosed mall fell through late last year. A few new leases, however, have been signed, including one for the Na- tional Pinball Museum, which will open this fall. “There is something here for


everyone,” said Banana Repub- lic’s Burge. “What has saved us is that it’s not just boutiques or the chains, but the serendipity of it all fitting together.” douglasd@washpost.com


Accidental entrepreneur learns ABCs of success


fivemost successful participants. Dolin introduced herself and picked their brains. One business owner told her


VALUE ADDED Thomas Heath


allowance. It was 1998, and the former


A


Fairfax County public school teacher had just given birth to her first son. She was 29, ambitious and not crazy about living on a $500-a-month handout fromher husband for groceries, lunches, diapers, formula and everything else she needed to run a household — including her own discretionary spending. “That wasn’t going to cut it,”


she said. “I knew I could bring inmoney through tutoring, and it was something I truly loved.” Dolin, now 41, has a robust


tutoring business called Educational Connections that is on pace to gross $1.45million this year. The Fairfax businesswoman owns an office condominium, employs six staffers and an army of 150 part- time tutors, and has helped 4,000 young people in 11 years. Dolin pays herself $150,000 a


year, but that can grow significantly, depending on profits. Dolin drives a company car, recently published a book called “HomeworkMade Simple” and earns all themoney she needs. Her husband is a salesman for Dell. “Life is good,” said the


accidental entrepreneur. EC serves students


throughout Northern Virginia, all ofMontgomery County, D.C. and Baltimore, althoughmost are in the Vienna/McLean/Great Falls corridor. The students get help with everything frombasic reading to Advanced Placement calculus. Tutoring and helping students develop study skills is 85 percent of Dolin’s business. The rest is test preparation and her own consulting. Students run the gamut,


attending such big public high schools as Yorktown High School in Arlington and high- end private schools such as Georgetown Day in the District.


DAYNA SMITH FOR THE WASHINGTON POST Ann Dolin works with OaktonHigh senior Emily Cockrill.


A small fraction are college students. Most of her clients pay $75 an


hour, although she recently raised rates for new clients to $80. Dolin’s business keeps just over half that amount, and the tutors get the rest. Dolin has wanted to be a


tutor since she was 10, when she started teaching English to a pair of young Korean girls who lived across the street. Shemajored in psychology at


PineManor College near Boston and earned amaster’s in special education fromBoston College. After graduation in the early 1990s, she packed up her U- Haul and headed to Fairfax County, because it was one of the few places hiring teachers during a downturn at the time. She was hired to teach learning- disabled fourth-graders at North Springfield Elementary. For extramoney, she tutored


students one-on-one after hours. “I saw howmy students’


grades and sense of confidence improved when they had individual attention,” she said. Another thing she learned is


that her students were smart enough, but they didn’t know how to organize their time and employ good studymethods. Over time, she has learned to impart good studymethods, which she calls educational coaching. After her first son was born,


in 1998, Dolin took a leave of absence. She was teaching an after-school basketball class at Forestville Elementary in Great Falls when some parents started sending her their kids for tutoring. Friends told friends, and Dolin’s little project turned


into a 40-hour-a-week business fromher Reston home. “That was the beginning of


my business,” she said. It was a seven-day operation.


She tutored home-school students during the day, then elementary and secondary students between 3 and 9 p.m. Students who hadmissed their tutoring session sometimes made themup with Dolin between 9 and 10 p.m. She workedmost of Saturday and half of Sunday. Dolin wasmaxed out at 35


pupils a week when a friend at her gymasked whether Dolin had roomfor another student in her schedule. She declined, saying she was overbooked. He said, “Why don’t you hire


tutors to work for you as independent contractors?” That was the ahamoment


that turned what was until then a side business into a full- fledged enterprise with roomfor growth. “I took his advice and . . .


hired a few ofmy friends who were stay-at-homemoms and former classroomteachers to work forme.” Going fromtutor to business


owner wasn’t simple. Lacking a business background, she called on a lawyer friend to incorporate the business for $200. Another friend, an accountant, helped set her up on QuickBooks to keep the businesses finances in order. When she received a postcard


fromthe Education Industry Association about a conference for tutor businesses, she jumped on a flight to Boston. She cornered the conference’s organizer, who identified the


nn Dolin became an entrepreneur when her husband put her on an


to give up day-to-day tutoring and focus on running the business. “I had about 50 tutors


working forme, but I was still tutoring about 20 hours per week. He recommended the book ‘The E-Myth,’ and it transformedmy thinking. I realized I needed to work on the business, not in the business.” Managing didn’t come easy.


When she started sobbing in front of her father, who owned an engineering company for 40 years, he told her to hire a consultant. She found the consultant through another conference, and she learned how to set prices, handle cancellations, schedule sessions and deal with parents. The key was keeping the


prices competitive while increasing volume. Thatmeant hiring lots of tutors and managing themwell to maximize profit. Dolin needs to generatemore


than $100,000 amonth to pay tutors and cover fixed costs, which averagemore than $60,000 amonth, including wages, health benefits and a company 401(k)match for the six office staffers. By 2007, the business was


booming. She took in $1.33million, paid herself a salary of $90,000. She also notched a $210,000 profit, which she used to buy an office condominiumso she was no longer a renter. She hasmade a healthy profit in each of the last two years, but she rolled that back into the business. Revenue is up 24 percent this


year, and Dolin has awarded herself a salary increase to $150,000. She expects to gross $1.45million, and she has no debt. She is expanding, too. She hired a neighbor last week to help hermarket her book and to schedule a blossoming career as a speaker. There’s nomore fixed


allowance or handouts fromher husband. Quite the contrary. Dolin’s


booming business paid for the family’s purchase of a second home in Florida last summer. heatht@washpost.com


Follow me on Twitter at @addedvalueth.


On Mondays, TheWashington Post offers Capital Business, a weekly publication covering the region’s business community. A one-year subscription costs $49 and is available only to Post subscribers.


Visitwashingtonpost.com/capitalbusiness for more details. THISWEEK, SEPT. 20 The Federal Reserve is on the


hotseat this week, and new data scheduled for release should shed light on the state of the housing market.


Tuesday Federal Reserve policymakers


are slated to meet to decide the course of monetary policy, and are sure to have an extensive discussion. But an actual change in policy is probably not likely. The officials will weigh how


much their outlook for the econo- my has deteriorated since they last met Aug. 10, and what, if anything, they should do about that situation. With the Fed’s pri- mary policy tool, its short-term interest rate target, already near zero, the central bank will need to take some new unconventional steps if its decides to act, themost likely option being to buy hun- dreds of billions of dollars worth of long-term Treasury bonds. The problem is that because


such a tool hasn’t been used much, it’s hard to know exactly what effect it would have; it might do little to boost the econo- my while causing problems down the road for the Fed. With a complex decision to make, look for the central bank to punt on the issue until the Nov. 2-3 meet- ing, and following this week’s meeting only tweak their state- ment to reflect the evolving senti- ment in the room. Also Tuesday, forecasters ex-


pect new data to show an 0.7 percent rise in housing starts for August.


Thursday Existing home sales are fore-


cast to have risen in August as


Neil’s Must Reads


How should regulators deal with the “shadow banking system,” those financial markets that were a major underlying cause of the financial crisis? Yale economists Gary Gorton and Andrew Metrick address the question in a new paper. And Douglas Irwin explores whether France’s insistence on increasing gold reserves from 1927 to 1932 was a major cause of the Depression. Find links at washingtonpost.com/ mustreads


well, with a 7.1 percent bump, a partial rebound following a 27 percent fall in July.


Friday New home sales are similarly


expected to rebound, with a 6.9 percent August increase forecast, following a 12.4percent tumble in July. Meanwhile, analysts expect


durable goods orders to have fall- en 1 percent in August. But orders for non-defense capital goods ex- cluding aircraft, a useful proxy for business investment, is expected torebound4percent followingan 8 percent drop in July. Also Friday, Fed Chairman Ben


S. Bernanke plans to speak at Princeton University, his former employer, on “Implications of the Financial Crisis for Economics.” —Neil Irwin


MONDAY, SEPTEMBER 20, 2010


NEWAT THE TOP DICKBODSONLEAPFROGSOLUTIONS


‘I found I was really good at relating’ I never envisionedmyself in


marketing communications. It’s funny. I drivemy wife crazy because I enjoy being constructively critical of commercials and advertisements. I always get a kick out of it because there seemed to be so many good ways of promoting ideas and people. Beforemy current job, I had been involved with state, local and commercial contracting workmy whole professional career. I had the good fortune of working with some really good companies with great training that helped me get fairly savvy, especially in the federal marketplace. I started off as a patent editor and moved into a large publication shop where I got really involved with marketing and communications activities. At the time, the market was flooded with English majors, like me. After impressing my boss with some business advice, I had the opportunity to manage writers and editors. Thenmy career changed and I moved into the federal IT and management consulting space, where I got involved in business development. I found I loved it. I could see the business side of things and worked with some great technologists who taught me many things. It was a great foundation for where I am today, where I work with a variety of government agencies doing publication and media technology work. As I would work on proposals, I could always see the different ways one could market a company and try to prove that it was better, distinguishing them from the herd. So I’ve made a career out of doing that. I found I was really good at relating to people. That sounds really simplistic, but as you meet with top executives, there are certain things in relating to them that you should know how to do. I know enough about the industry to be able to listen and be very forthright in how to address what they want. I’ve turned away customers before because I knewthere was somebody who could do a better or more economical job for what they wanted. I eventually went to a small company with 360 people that grewto 1,100.We did two acquisitions I helped organize that gave us a foundation to win a lot of


COURTESY LEAPFROG SOLUTIONS


Dick Bodson Position: President of LeapFrog Solutions, a Fairfax-based company that provides strategic marketing communications, advertising, public relations, website design, interactive marketing, and related information technology support. Career highlights: Executive vice president, NetStar-1, chief operating officer, AVIEL Systems; program director, General Dynamics IT. Age: 57 Education: BA, English, University of Virginia. Personal: Lives in McLean with his wife Barbara Bodson. They have two kids, Beth and Jim.


business. I remember at one company, we put together a big variety of training programs, including survivor training courses for theNavy and Army. We would do surveys on the effectiveness of our training.We got e-mails from people who were in Operation Iraqi Freedom who had been through our training and felt that because of the training, they had survived certain situations. I don’t think there’s anything more rewarding than that. This is something that attracts me to Leapfrog—the ability to use technology to make a difference. I have been privileged to work with great leaders in every company, ranging from a dedicated retired Air Force war fighter to two of the best chief financial officers in the business.Now I get to work with talented people here at LeapFrog Solutions. —Interview with Vanessa Mizell


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