Celebrating Excellence

The 2010 Ernst & Young Entrepreneur of the Year awards program recognized retailers from across the nation. Several of the regional retail winners are profiled below.



Matt Rubel learned his craft at an early age. The 52-year-old chief of footwear giant Collective Brands Inc., parent to such brands as Payless ShoeSource, Stride Rite and Sperry Top-Sider, was introduced to retail by his parents.


“I worked in their stores growing up, starting at a very young age,” Rubel said. “I learned that I loved customers and their passion for shopping.”


Rubel has remained true to his early vocation. After graduating college in 1979, he started his career at the legendary Bonwit Teller in New York. From there, he went on to hold leadership positions at some of the nation’s most prominent retail brands. From 1999 to 2005, Rubel served as chairman, president and CEO of Cole Haan, a subsidiary of Nike, where he led a multi-year turnaround, re-energizing the brand and creating a strong global presence.


Rubel brought a wealth of experience and business know-how to Payless, which he joined as chief executive in 2005. He also brought a knack for building things: In 2007, Rubel led the $800 million acquisition of The Stride Rite Corporation and the resulting formation of Collective Brands. Under his leadership, the Payless brand has been revitalized and has grown into the largest specialty family footwear retailer in the Western Hemisphere, with nearly 4,500 stores. The company has evolved into a diverse global player with a strong portfolio of iconic brands and five dynamic channels: wholesale, retail, e-commerce, licensing and franchising.


The road to dynasty-dom wasn’t without bumps, but that has played to Rubel’s skill sets. 


“I love fixing and building, and this company offered both,” Rubel said.

The executive describes his leadership style as “empowering with strategic guidance. 


“I believe that if you give people the right tools and resources, a framework and the right amount of guidance, they can accomplish just about anything,” Rubel explained.


Rubel is bullish on the future. The ongoing global expansion of Payless calls for at least 80 franchise stores in nine countries in 2011, with opportunities to expand to 700 stores within five years and 1,400 stores long term. 


The company’s Sperry Top-Sider brand is also laying plans to expand its retail presence by 40 to 60 stores during the next three to five years, based on the success of five stores that have opened to date. And Rubel has outlined long-term growth targets companywide that call for net sales growth of 3% to 5% and operating profit growth of 9% to 12%.


Even when immersed in the big picture, however, Rubel hasn’t forgotten the lessons that got him to where he is today.


“The best piece of advice I received along the way was to master the fundamentals of business and your industry,” he said. “And if I, in turn, could offer advice to another entrepreneur, it would be to master the fundamentals — and know your customer.” 



Lexy Funk has created a thriving retail business based on an unlikely mantra that grew out of her and her partner’s early experiences as artists trying to make a living. 


“Our motto — LIVE, WORK, CREATE — is infused throughout everything we do. We believe in bringing creativity and an artistic spirit to our company and customers. This makes our stores fresh, original and constantly changing,” said Funk, 40, co-founder and CEO of Brooklyn Industries, which sells cool clothing and accessories to urban hipsters through its 14 stores and Web site.


In 1997, Funk and partner (now husband) Vahap Avsar were living in New York and running a design-based company that produced TV commercials and documentary films. The couple changed gears when Avsar found a vinyl billboard in a dumpster and decided the material would make an ideal messenger bag. Soon, they were working out of an old factory in Brooklyn, making the bags full time and selling them to boutiques. 
As the company grew, so did its product lineup, expanding from messenger bags to graphic T-shirts to a full range of lifestyle clothing for men and women, with some kids items too. In 2001, it opened its first store, also in Brooklyn. 
Today, Brooklyn Industries is a vertical brand, defined by its cutting-edge designs, limited-edition prints and strong sense of corporate responsibility. Nearly all (99%) of the merchandise is produced by the company under its own label.


Funk and her husband divide responsibilities. She is focused on the company’s business direction and strategy, as well as the merchandising, while Avsar serves as creative director. He is in charge of everything creative, including bag and clothing design, visual concepts and store designs. 


In 2008, Brooklyn Industries began expanding outside its New York home base, opening stores in Chicago; Portland, Ore. (with a space that doubles as an art showcase for independent artists); and, most recently, Boston and Philadelphia. More stores are planned for 2011. 


“We want to continue to expand our clusters and grow in existing markets,” Funk said. 


Even hip retailers like Brooklyn Industries have been challenged by the economic downturn. But Funk remains optimistic. 


“Cash flow and funding continues to be an issue in the current economic climate,” she said. “But we have a terrific brand, and the response from customers continues to be very strong.”


As for advice to others who may be thinking of striking out on their own, Funk said that having a financial background or working with a financial partner is critical to a successful start-up.


“To have a successful business, it is also important to identify a ‘blue ocean strategy,’ or an area in the market that is underserved,” she added. “The strategy, however, might not be what you initially think. Be flexible to the market and your customer, and do not be afraid to switch gears if your initial idea is not working.” 


Looking back, is there anything Funk would do differently? 


“Believe in our gut feelings about business issues and not listen too much to what other people in the industry are doing,” she said. “And get into vertical retailing faster, as it is a great model.” 
 


Take good care of people and the rest will fall into place. That’s what Phil Hagerman’s father told him when he was just starting out, and it’s a credo that Hagerman continues to live by today.


“My dad was a great mentor,” said Hagerman, 58, president and CEO of Diplomat Specialty Pharmacy, the nation’s largest privately held specialty pharmacy company. 


Now a $100 billion industry, specialty pharmacy — which focuses on comprehensive and coordinated medication management systems for patients with serious and chronic conditions — was barely a blip on the radar when Hagerman, fresh out of pharmacy school, and his father, Dale Hagerman, also a pharmacist, opened Diplomat Pharmacy in 1975. Located in Flint, Mich., Diplomat was a conventional drug store. But the Hagermans soon got involved in compounding, or making up customized medications and therapies for specific customers. Diplomat’s compounding business picked up steam throughout the 1980s and early 1990s. The store also developed a reputation for carrying medications that the average pharmacy did not carry. 


“Compounding really got us into the niche of specialty pharmacy,” Hagerman said. 


From compounding to creating programs spe