the Buzz around Flip Flop Shops^®

It's no flop when buyers flip

Kathie Price
Special for The Republic
Aug. 13, 2005

Two retail novices took a bad shopping experience and turned it into a business idea.

Over a seven-month span, they opened an online store and four mall stores, all selling flip-flops.

Nothing but flip-flops.

Yet within four months of opening day, each Flip Flop Shops store has boasted a profit. Flip Flops Shops at Chandler Fashion Center had a 30 percent profit after one month, said co-owner and chief executive officer Todd Giatrelis.

Giatrelis and Sarah Towne, co-owner and executive vice president, were in town in July to open a Metrocenter store. Wearing flip-flops, of course.

In mid-September, they plan to open a Flip Flop Shops at Scottsdale Fashion Square and are eyeing Arrowhead Towne Center in Glendale for their last Arizona venture.

Spurred by speedy success, next year the owners plan to roll out 20 more stores over 20 months in three different states. Southern California and Florida are next on the list.

"It's a quick-to-market concept," said Giatrelis. "Once you secure the relationships and buying you need, you don't take five years to open up or someone else is in there."

Giatrelis, 40, has run a restaurant and is part owner in the Gate Group, a company that recruits and consults in the hospitality industry. Boston College graduate Towne, 25, worked in accounting for Gates Group.

The flip-flop concept popped into their heads in April last year while in Las Vegas for a convention with Gates Group.

"I didn't realize how warm it would be so I went to look for some flip-flops," said Towne. "I went to a lot of shoe stores and there wasn't much. I ended up buying a pair at Saks for $85. So that got us thinking."

They sought advice from a few shoe-business owners and checked out California's surf shops. In September, they opened a test store for three months in the Boston area where they live.

The original concept was beach sandals. But customers had other ideas and by December, Flip Flop Shops flip-flopped and became an upscale boutique when the Biltmore Fashion Park store opened.

Giatrelis and Towne discovered their average customer was a 30-something woman with a hankering for a dressier pair of sandals and a husband and kids who might like a pair or two of flip-flops. They're banking on the theory that most women will own as many as 20 pairs of flip-flops to match outfits, while men opt for the basics in up to five pairs.

Enter flip-flops with crystals, flip-flops with leather, wedges and flats, suede and plastic uppers, rubber and cork bottoms. Flip-flops from California and flip-flops by people such as Carlos Santana, Ralph Lauren and Anne Klein.

Flip-flops go for $15 and $150. In Chandler, the average sale is $65, said Towne.

Flip Flop Shops are small. The Chandler store occupies 650 square feet. There is no back-room inventory. New styles come in weekly and are on immediate display, part of the owners' philosophy.

Flip-flop slippers, open back/closed toes and little heels, flip-flops with satin ribbons and dressier sandals for holiday attire will be among the new styles for fall and winter, Towne said. The White House flip-flop flap in June couldn't have come at a better time for Giatrelis and Towne.

Northwestern University's national champion women's lacrosse team, toes exposed in flat flip-flops, posed with President Bush for a photo that made the front pages of prominent papers and fired talk radio for several days.

In Tampa, when a caller to one radio station said someone should open up a chain of shops selling flip-flops, Giatrelis called the station to introduce the airwaves to Flip Flop Shops.

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