Interview: High-End Los Angeles Retailer Wally’s In Expansion ModeSeptember 14, 2017
One of Los Angeles’s most prominent retailers, Wally’s Wine & Spirits is jointly owned by Christian Navarro and Guess co-founders Paul and Maurice Marciano.Known for its vast selection and high-end focus, Wally’s operates two stores—including its original location on Westwood Boulevard that’s been in business since 1968, and a second store in Beverly Hills, which features a bar and restaurant. Wally’s has been in expansion mode, partnering with Christie’s to establish a New York wine auction platform earlier this year and planning a third store in Santa Monica that’s set to open next year. SND senior editor Christina Jelski recently caught up with Wally’s co-owner and president Navarro to discuss what’s ahead.
SND: How will Wally’s upcoming Santa Monica location compare with your existing stores?
Navarro: What we’ve found is that our Beverly Hills model—with an on-premise component—is working for us. Though that’s not to say there haven’t been some tears along the way, because we’re sort of creating it as we go along. We’ll be breaking ground on our Santa Monica store shortly, and it should be open within the first quarter of 2018. We’re going to try to recreate the Beverly Hills model moving forward, and we’re also investigating other potential markets as we speak.
SND: How are you adapting to the rapidly evolving retail market? What key challenges are traditional retailers facing?
Navarro: The biggest thing that’s happened recently was the acquisition of Whole Foods by Amazon. Now, Amazon will likely be able to deliver beverage alcohol widely and easily throughout California. That’s the future, like it or not, and there’s a concern that the Amazons of the world will crush the small, independent businesses, as we’ve seen with bookstores, etcetera. But for us, luxury retailing is different from discount retailing. People buy two ways—either it’s the cheapest, or they trust you and know they’ll get what they ordered. We’re never going to be the lowest price. What we try to do is guarantee quality, which means if you’re unhappy, we give you all of your money back guaranteed, and we try to have unique products that separate us from our competitors. We don’t want to compete on price or join a race to the bottom.
SND: What overall trends are you seeing within the wine retail space?
Navarro: Because we have a restaurant as well, our model’s slightly different from most wine retailers. We have an opportunity to pair food and wine, and people have a great chance to discover new things, because we have 150 wines by the glass. We’re starting to see areas like Rioja really start to pick up. Barbera from Italy is also gaining traction. These are wines that may have been foreign to people who aren’t wine experts, but we’re seeing them gain in popularity. There’s a definite trend toward softer, interesting flavored wines with low alcohol.
SND: Is there currently a pricing sweet spot that your consumers are migrating toward?
Navarro: We don’t discount, so we probably sell a little less in volume, but make a little more in profit than most retailers. I’d say $100 is the perfect sweet spot for most of our customers.
SND: What’s the update on the Christie’s auction partnership? How was your inaugural sale this summer?
Navarro: We’re finding it to be a fantastic relationship. Wally’s has always had access to customers and wines, both buying and selling, and Christie’s has a global reach beyond anyone else. We’re not just talking about the traditional wine buyer—there are so many people that Christie’s has the ability to touch. We’re going to continue to look for ways to expand, but the inaugural sale was amazing in that it did over $5 million in revenue. That’s a big sale, by anybody’s definition. Christie’s is also very similar in a sense to Wally’s. They won’t take everything, and they won’t engage in a race to the bottom. They’re going to focus on quality and service, and therein lies the value.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.