Naples Soap Company in Naples, Florida
Guest: Deanna Wallin
Topics: Naples Soap Company, retail, bath and body products
Transcript:
Chris Ressa 0:00
This is Retail Retold, the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa, and I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC Management.
Welcome to Retail Retold everyone today I’m joined by Deanna Wallin, the CEO and Founder of Naples Soap. I am excited for her to be here. Welcome to the show. So Deanna, tell a little bit, a little bit more about who you are and what you do.
Deanna Wallin 0:36
I am the founder and CEO of Naples Soap Company. We are an omni-channel retailer, we started 13 years ago in a little tiny 300 square foot space in Naples, Florida. Thus the name Naples Soap Company. And I was a nurse, and I have had eczema and psoriasis my whole life and my daughter has as well. And I was tired of working in the medical field. And I had gotten divorced, a friend of mine said, hey, why don’t you open a store next to me?
It’ll be fun because she had a jewelry store and accessory store and I said, okay, that sounds like fun, not knowing what I was getting myself into. And I had a friend of mine at my house and I said, he was in retail. And I said, you know, I want to open the store. There’s a little space here. I don’t know what I’m going to sell. And we were looking at retail concepts and he came out of my bathroom was like, why do you have so much soap and lotion?
And I gave him a 45 minute dissertation on eczema and psoriasis. And he said, well, what do you like the best? And I said I like natural soap. And he said, and he literally googled natural soap wholesale boom. And he goes, here’s your suppliers, sell what you know. So that’s how I’m able to. The light bulb went off over my head and I was like, well I’ve always been a huge fan.
I’ve always had, you know, a lot of women have excess Bath and Body products in their bathrooms but I am, I am like the Mack Daddy Queen of Bath and Body products in my bathroom. It’s actually caused some marital strife, it came on occasion. But so I am very passionate about skincare and I enjoy it.
And so the light bulb went off and I took, like I said, I took a 300 square foot space and within three months I was breaking the wall down and taking the space next to me because I had so many people coming in and out of the store looking for the natural soaps that we were selling in the body care. So within a year I took another location because I had people driving from 45 minutes to an hour away to come to our store to talk to me.
Within that year, I took two more locations and if you fast forward to today we have, well we had 10 locations, we’ve got nine now after the hurricane and we’ve got four under construction that will deliver in Q1. So we will have 13 units by the end of Q1 in in the state of Florida.
Ressa 3:08
And they’re all in the state of Florida.
Wallin 3:10
Currently they’re all in the state of Florida all under the Naples Soap Company brand. We also, like I said we’re an omni-channel retailer, so we have Amazon sales. We have our own e-comm website, which we’re doing somewhere between two and a half and 3 million a year on our e-comm.
And then we also have wholesale clients. Some of those clients are like, for example, the Ritz Carlton in Naples, before they got hurricane damage, we were getting ready to go into all of their VIP suites and provide VIP product for them for their their guests at the new hotel that the renovated hotel on the beach. So we so we are definitely have the four sales channels and the retail retail stores are our largest sales channel.
Ressa 3:50
I could ask you about 3 billion questions. I have so many, I’m so passionate about retail, but I won’t do that. So I’ll try to stick to a few. I’m so fascinated by entrepreneurs who do this. You’re also a public company?
Wallin 4:02
Yeah, about a year and a half ago we did a reverse merger. OTC Markets were getting ready to delist a whole lot of companies that weren’t current. So there was an opportunity to pick up a shell company and dip back into it, and and we did that successfully within a very quick period of time after we did our due diligence. And so we are currently listed on OTC Pink Sheets and we’re working our way, we’ve completed OTC QB filings to work up to the next market.
Though that OTC process allowed us to raise over a million dollars that first year, which was really exciting for us. And we are working on our expansion plans, some organic, and we’ve got some joint ventures that we are discussing with a couple of companies out there as well to enhance our growth and possibly some franchise opportunities.
Ressa 4:58
Amazing. So I’ll start with the first store. So 300 feet. What type of policy was this? Was this a mall, a strip center? What was this?
Wallin 5:09
It was actually in a place called Tin City. It’s an old historic fishing, it was a like a clam shelling factory at one point in time. It’s, it’s a historic building, and it sits right on the water. And there’s a couple of restaurants on the water. It’s very kitschy. And a lot of tourists go there. And that was sort of what I based my model on.
And I really didn’t get to go on a lot of family vacations, or vacations when I was a kid. So I decided that I was going to put my stores everywhere that I would want to spend the weekend or go hang out for a vacation, not as a child, but as an adult. So we have, yeah, so if, if it’s someplace yucky that’s got bad traffic, or bad weather, we’re not going there. So we are in mostly high tourist traffic areas.
For example, downtown Fort Myers, that’s a really nice area, we were there two years during a renovation period of that five, six block district. We like downtown areas, we are in some lifestyle centers that helped mixed use with apartments up above, but nicer lifestyle centers. A traditional mall is not where we are, you know, we have competitors in those malls. And it’s really not our demographic, our demographic is a much higher-end demographic with a little bit more disposable income.
Ressa 6:33
Amazing. And so when you went to decide on that 300 square foot space, was that your first entrepreneur business?
Wallin 6:44
Oh, yeah, I had no idea what I was doing. I had no clue. So, and it was 2009. So we’re in the middle of this, you know, coming out of the 2008 market crash. And I think I just tell people, ignorance is bliss. Because if I had actually known what I know now, I probably would have never done what I did.
And I basically took every penny I owned and ended up putting it into this business, but it has paid off over and over again. So I have no regrets for that. But, you know, growing the business, the business has a life of its own. It’s been really fun building a brand and building a brand that has a solid reputation and kind of a cult following for its products, if you will.
Ressa 7:26
For sure. And how much did you put in, like what you said, you put it all into this 300 square foot space in this, in these soaps? What, how much did you put in?
Wallin 7:35
Probably over over the course of the first two to three years, I probably put close to $300,000 out of my own pocket and kind of like…
Ressa 7:45
Did you ever take any like, venture or PE funding?
Wallin 7:51
No, no, I really, it was scary as an entrepreneur, I was gambling with my money. And if I lose my money, that’s one thing but I, you know, I’m just not the kind of person that has the nerve to gamble with other people’s money. So I bet on my own horse, I bet on myself and bet on that horse, and I knew that there were situations that I could control.
But too, I definitely would lose sleep. With some of the bumps and hurdles that we faced in the very beginning, I would have definitely lost sleep had I been accountable to outside money. So we might have taken a slower growth path, but everything that we had was within our control.
Ressa 8:33
Good for you. And you mentioned you have four channels, you have the stores, your on-site, third party, online sites like Amazon and then you have wholesale? Got it. And it’s all your product.
Wallin 9:02
In our, in our retail locations, I do carry some other products besides our branded products, but right now we have close to 650 of our own branded products. And we do everything from body butter scrubs, sea salt scrubs, natural soaps, sea salts, herbs, lufa soaps, we do high-end face care, we have a CBD line, we’ve got sunscreen products. We’ve got lip balm, we’ve got SPF lip balm.
We have bath bombs, shower bombs, essential oils, but in the, so that all that core product is on our website. But in the retail stores we also carry what we call our ancillary items. So it might be, for example, like a diffuser that you would put essential oils in are things that we don’t particularly put our brand on maybe some like KitchenAid tea towels, you know or bathroom towels, that type of thing that have cute sayings and things like that on them.
So we diversify, because at the end of the day we are retail store. And retail is our bread and butter. So 650 core products will fill the walls and some of the tables where you still need to have more products of interest to mix in, you know, especially being in high tourist traffic areas, we might carry some little dishes that are made of like turtles and seashells and things like that, that people want to take as a souvenir to bring home or, or a, you know, a gift to someone.
Ressa 10:29
Really cool. And so you had 10 locations, you have nine now, you have 13 in queue at the end of Q1 next year. And give me, what’s the average size? And like, what’s the average unit volume on one of these?
Wallin 10:43
Sure. So we have kind of a variety, we’ve got my smallest unit is 780 square feet in Sarasota. And my largest unit is in Kissimmee, adjacent to Margaritaville, and in plantation walk, and that is 2400 square feet. That’s a pretty big store for us. The the right size. For us it’s somewhere between 15 and 1800 square feet, but sometimes it’s hard to find the exact, you know, that you have that you’d like.
So that’s the average square footage. The stores can range anywhere from you know, 1.3 million to 400,000. We’ve got ‘A’, ‘B’ and ‘C’ level stores. And that’s a lot of product and a lot of units coming out of that, the ‘A’ level store that does last year, like 1.2 million. That’s 1000 square feet. That’s a lot of product moving out of 1000 square feet. Yeah.
Ressa 11:39
Wow. And when did you decide to do these other channels because now omni channel, obviously you have your own website, so you sell direct to consumer. That’s great. All these tourists who come down there when they go home. Now they can still buy you.
Wallin 11:56
Say we have an 87% capture rate on our in-store transactions. We have a tremendous amount of software that calculates our KPIs for us that ties into our POS system. So we were averaging, you know, when we started tracking we were about at a 30% capture rate on email. Now we’re somewhere between 80 and 87%, just depends on the week during holiday weeks, it’s a little less because people are in a hurry.
But that email capture is critical for feeding our econ business because people get signed up for our e-blasts and they get a welcome email and then into the flow. So now that they, they’ve already purchased, they’ve had an in store experience, which now I’ve got, you know, I’m not just trying to feed top of funnel through social and through other channels. I’ve got someone that who actually is an experienced customer or has had an experience with us.
Ressa 12:57
Fantastic. Well, kudos to you. That’s amazing story and growth and do you plan to open stores out of Florida?
Wallin 13:06
We are looking or looking in Charleston area. We are looking at a lot of different opportunities. We had a little bit of setback in September with the hurricane
Ressa 13:18
here. Yeah, so let’s talk about that. So did I I’m in Fort Myers. I wanted to talk about that’s how I heard about you. I saw you out there we had a shopping center in Fort Myers. We’re under a multimillion dollar redevelopment we’re back on track we should deliver an open in March. So I know the pain though. I was midway through construction on this as it happened. So tell me what happened in your store and what’s going on and what you’re doing.
Wallin 13:43
We we’ve out of the 10 locations we had open six of them are in a south in southwest Florida so we’ve got a pretty tight footprint in southwest Florida. We also go all the way up into the panhandle of Florida is pretty big state. So between my northern my store my southern my store and people go oh they’re all in Florida. Yeah, well there’s an 800 mile stretch between the furthest and people don’t realize how far that can be. So six of them are in southwest Florida.
The other four are either in the Central Florida or more northern Florida. So out of the six in southwest Florida, four of them were took on water and any the two stores in Naples one of them took on on Fifth Avenue which is a higher end shopping district there.
We had about eight to 10 inches of water in that store just enough to ruin the floors and fixtures, and then intensity our mothership, the original little store that’s a very old historic building and we had about a three and a half foot waterline inside that inside the store. And the building itself sustained a lot of damage. Downtown Fort Myers is on the river we had about a three foot waterline in that store.
Sanibel Island, we have almost a six foot watermark inside that store as well. on there were trash cans that were on the ground that oh, you know, just small trash cans that were sitting up on six feet high of shelves. So it was It was horrifying to say the least. And not only that the damage wasn’t just that water came in and went out when water came in. It brought basically the bottom of the river or the bottom of the bay.
It brought sewage it brought a lot of nasty stuff that you do not want in your house or your your business. So mitigating nine getting surf pro out right away, tearing the walls down to studs, four feet up. It was an epic nightmare. And at the same time we we have built a we were in the process of finishing and waiting for a CEO on a 20,000 square foot warehouse and and corporate office. We’ve been building that out for almost Wow, where were in Fort Myers.
Ressa 15:53
Oh my goodness. Yeah.
Wallin 15:54
So so that building didn’t sustain any damage. But the building that we were in that I had just sold in April. I had owned that building since 2015. Personally, we moved out of 11 That was 11,000 square feet and I had sold it in April thank God and and the waterproof membrane on the roof of that was off in the parking lot. So we had extensive damage in the warehouse that we were in so first thing we had to do was secure the warehouse and move into a facility with no power. The all the acoustic tiles were coming down insulation was coming down on top of us my computer’s were ruined.
There was so much water damage in that building. We had to salvage what we could we had maybe $20,000 worth of product damaged from water, and then airlifted everything over to the new warehouse. We had friends, husbands boyfriends, some of my girlfriend’s came they brought their fathers with them. I mean, anybody that could possibly pick up a box and move it they came and showed up and drove this move.
Yeah, because we were fighting against time because in Florida, you don’t know when it’s going to rain again. So with that just being exposed, we knew we had to get everything out and we were in the new facility. We got power up probably three days after we’ve three to four days after we moved into the new facility and we were up and shipping within another four days. Yeah, my team.
So when it came to the mitigation of the stores that were damaged, we got three stores mitigated and I’m talking like full surf pro the fans the right for cleaning drywall, cut up to four, four feet. Reinstall drywall, we got them mitigated refix fixtured and restocked in 67 days, three laps. Wow. It was a Herculean effort.
Our team has just really busted it out. And that’s Yeah. And that’s moving warehouse and rolling into holiday season at the same time into Christmas. So it’s been pretty busy around here. My team is, is looking forward to having some time off.
Ressa 18:05
Yeah, I imagine. And you say your team, how many employees do you have?
Wallin 18:10
I think right now my sense is probably 85 total. Yeah, and
Ressa 18:15
so the last store is not coming back and downtown.
Wallin 18:21
That’s Sanibel Island. Right now. The island hasn’t even been open to the public there was
Ressa 18:29
just there. I was literally just there. I have toured it because I needed to go see the project that we have. So I was there. And my wife and I our vacation spot every year for our family. I have a four and five year old is Captiva. This year we’re going to Anna Maria Island, we switched course because of what’s going on but typically Captiva and Sanibel and obviously that’s
Wallin 18:54
tween waters is out there, that hotel. I had Doug Babcock who’s the CEO of that hotel group, I had him on my radio show last week, and they are getting ready. They’re taking reservations and they’re open to the public. Again, January 2, they’ve taken reservations so they’re opening them but they are back up and running. I was out there three weeks ago and had lunch at the old Captiva and it’s just really it’s sad because the island is to go
Ressa 19:20
by boat or helicopter had to get there. drove over the bridge or the bridges up there.
Wallin 19:25
Yeah, the we have a hurricane pass to get over the bridge. The bridge is temporarily repaired. So but the first time we went out there maybe two weeks after the storm, we had to go by boat and it was atrocious. The Bay smelled like gasoline and sewage and like just decimated just just heartbreaking. absolutely heartbreaking. So our landlord is really working hard there to restore the building, but huge parts of Sanibel still don’t have power.
So without power, it’s hard to you can’t get your ACS going and you might I just will not put drywall in because without you know pulling the humidity out of the air and not having a see, you know your drywall is getting moisture in it. So there’s a lot of things that still have to happen out there for the island to recover and it’s going to be a long, long time.
Ressa 20:16
You said 67 days we have a three stores. What would you say that you’re back to normal in those stores? Ah,
Wallin 20:24
the Fifth Avenue store is right at li numbers right now. 10 cities running at about 50% l why? Just because one of the other buildings isn’t open. And then someone decided there was a drunk driver on Black Friday morning at three o’clock in the morning decided to launch his car 70 miles an hour through the end of the building. Yeah, that actually happened. So
Ressa 20:47
I’ve had had drivers drive in the shopping centers before. So right same
Wallin 20:51
thing. This is the second time this has happened. So he launched through the winery at the end of the at the end of our building and out the other side in the car burst into flames. So that was what I woke up to Black Friday morning. And I can’t make this stuff up. It’s just crazy.
So the poor old girl intensity has been under attack. So they’re running at about 50% Because they’re not fully opened, a couple of one of the buildings isn’t open. And then downtown Fort Myers, that store they’re running in their numbers are probably about 85 to 90% of Li so we’re happy enough with that at the moment. We’ll take it.
Ressa 21:27
Yeah, for sure. Well, listen, this was an amazing story. And kudos to you. 67 days, true entrepreneurial spirit. Way to get everyone behind in going and wish you guys nothing but the best and I hope the numbers by the end of this weekend end up rocking and rolling for you.
Wallin 21:50
You and me both you and me both sometimes Chris the only way out is through. So that’s that’s the direction we went. Exactly. Thanks for having me on. I really appreciate it.
Ressa 21:59
Really appreciate it too. Thank you so much. Well, I have three questions for you at the end, though. I’m sorry. I got three questions for you. Okay, ready? They’re fun. All right. Question one. What extinct retailer Do you wish would come back from the dead? Oh, wow.
Wallin 22:19
Um, oh, gosh. Dara, say FAO Schwarz.
Ressa 22:24
That’s a good one.
Wallin 22:26
Yeah, this was one of my favorite stops in New York City. And every single year for Christmas. I would always take my kids FAO Schwarz and it was such an amazing experience. Now there’s an Apple store their giant Apple Store right in the middle where FAO used to be. So
Ressa 22:40
Okay, question two. What’s the last item over $20 You bought in the store? In which store and the store?
Wallin 22:48
Oh gosh. Last item over $20? Oh, good question. In a store in a physical store, physical physical stuff. Not online. Not amazon online. Okay, because I bought some shoes this morning. But those were online. I’m in a physical store. Oh, I bought olive oil. So I there’s an olive oil company that’s next door to us in one of our locations and but olive oil to give us gifts to support them. So. Yeah, so olive oil and vinegar vinegar set. Christmas.
Ressa 23:26
Last question. I think I know the answer. But if you and I were shopping at Target, and I lost you what I would I find you it
Wallin 23:36
Oh, I’m gonna probably somewhere wandering around health and beauty or medicine or supplements. Yeah, that was that was an easy one for
Ressa 23:47
you. Yes. All right. Well, listen, Deanna This was great. Thank you so much.
Wallin 23:53
Thank you, Chris. Appreciate it. Have a great holiday.
Ressa 23:56
You too.
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