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I nside Dots, every woman has an opportunity to be a model. Friends can wait in chairs near dressing rooms while she shows off the latest fashions.

But despite its aim to be “girlfriend friendly,” Dots is no pricey boutique. Everything from its sleek modern look to its easy layout is designed to move clothes out the door, and fast. With its heavy emphasis on the latest trends, Dots is a place where a fashion plate can survive on a Chinet budget.

Much like hemlines, Dots has experienced its ups and downs. Now, however, the company is “moving in the right direction,” says Rick Bunka, CEO of the Glenwillow, Ohio-based retailer, which is celebrating its silver anniversary this year. “There is a story to tell about serving a fashion-oriented shopper with a value-driven pricing strategy.”

Fashion at low prices
Dots has a definite idea of its typical customer, a 25- to 35-year-old woman living in middle America. Despite that demographic peg, it’s really more about attitude than age, income and locale, Bunka says. “She’s defined more by her fashion sense.”

In many ways, Dots hasn’t changed its mission since it was founded by Bob Glick in the mid-1980s. Glick wanted to provide fashion at affordable prices – at the time, nothing more than $10. Those early efforts set the pattern for what would become Dots, which now has more than 400 stores in 28 states focused on quick-turn, low-priced clothing: Most items still run under $20. This spring’s must-have — color denim — is widely featured in Dots’ TrendBook for $19.80. The same price also delivers bubble tank dresses and maxi-dresses; graphic tank tops run about $5 less.

There’s no telling how long those items will be available. “We will not take positions in fashion trends and sustain them over a long period of time,” Bunka says. “We’re much more aimed at being an in-and-out and on-to-the-next thing [retailer] and trying to give [our customers] a great experience.”

When it comes to fashion trends, Dots is a follower, not a leader. That, as much as anything, has helped protect the brand from having its target market age out of its products.

“That’s the beauty of what we did in targeting a fashion customer,” Bunka says. “What we’ve found is a fashion customer usually shops with the same mindset ... trying to stay on top of fashion trends and interpreting them herself.

“We’ve built a responsive model rather than a predictive one,” he says. “We’re able to monitor fashion trends and react to them.”

Granted, the attitudes about fashion have changed over the past 25 years. “These are different times than the ’80s or ’90s,” Bunka says. The typical Dots customer is “not following fashion. She’s trying to use fashion to inspire her own personality.”

And she wants the flexibility to change frequently — hence the low prices. “She’s not buying items that she’ll have for two or three years,” Bunka says. “You don’t want to spend a lot of money on what will be changing frequently.”

Getting on the map
While the fashions change rapidly, Dots’ ownership remained steady until 2011, when Glick sold the company to private equity firm Irving Place Capital. Glick stepped down as chairman and CEO; Bunka became CEO after previously serving for five years as president.

It’s been a relatively smooth transition, “with compliments to our founder,” Bunka says. “He operated this business in preparation of these times.”
Irving Place Capital is no stranger to niche retail brands. It purchased Aèropostale and its 120 stores in 1998, then took it public four years later. Irving currently owns New York & Company, luxury handbag maker Stuart Weitzman and pet retailer Pet Supplies Plus, and it has significant holdings in manufacturing and healthcare.

The new ownership “really put us on the map,” Bunka says. “You probably had not heard much about Dots, though we’ve been really active in the industry.”

Along with the cache of Irving Place Capital has come access to real estate. Dots targets storefronts of 4,000 to 5,000 sq. ft. in metropolitan, urban and suburban market power centers. The company plans to open about 40 stores in 2012 and intends to keep the pace at 40-50 stores through 2015.

“We anticipate that we’ll continue double-digit growth,” Bunka says.

Building community
If the bricks-and-mortar stores are intended to be “girlfriend friendly,” Dots’ online presence accomplishes the same feel with a heavy emphasis on community. Dots currently does not offer its products for sale online, though users can add them to a virtual closet and then check availability at nearby stores. Users can assemble looks and ask for input, comment on others’ outfits or see community favorites. The company recently launched a mobile application as well.

“You have to communicate with the customer in the way she likes to communicate,” Bunka says. “For several years, that’s been through the Internet and our website. ... We’ve been growing Facebook and Twitter, and today the fastest-growing segment we have is mobile.”

The company also connects with its customers through its own radio channel and a web-based TV channel that showcases the latest fashions. Three bloggers supply content for the Daily Diva blog.

In 2011, the retailer teamed up with superstar Lady Gaga for a promotion. The winner received two tickets to an upcoming concert; Gaga’s “Born This Way” album was available in all Dots stores for $10.80. Dots also played the music in-store and featured Gaga’s videos on its TV channel.

The company also is considering a loyalty program. “We’re already seeing a very frequent customer,” Bunka says, “and we suspect that a loyalty program will only enhance that.”

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