Owners of Steve & Barry's University Sportswear
Born Barry Prevor, c. 1963. Born Steven Shore, c. 1963. Education: Prevor: University of Pennsylvania, Wharton School of Business, business degree. Shore: Tulane University, business.
Addresses: Office —Steve & Barry's University Sportswear, 12 Harbour Park Dr., Port Washington, NY 11050.
Began partnership selling T-shirts at flea market, c. 1970-84; co-CEOs, Steve & Barry's University Sportswear Inc, 1980s—; co-CEOs, 4004 Inc., 1980s—; opened first store, Philadelphia, 1985; expanded to more than 100 stores by 2005.
Barry Prevor and Steven Shore and are trying to revolutionize the clothing retail business in the same way Home Depot changed home improvement and Starbucks turned selling coffee into a multi-million dollar business. The two co-chief executive officers of Steve & Barry's University Sportswear began selling T-shirts in New York flea markets before opening their first store in Philadelphia, Pennsylvania. Their plan of keeping overhead costs low by strategies ranging from purchasing cheap office furniture to using the U.S. tariff system to their advantage, has resulted in the company being able to sell merchandise for up to only $10.
Both Prevor and Shore grew up on Long Island, just 20 miles apart from one another. They met at at the age of 15 during a camp that aimed to bring together various kids from different communities. Prevor and Shore became best friends. Both had a mutual interest in business. With just $100 they became business partners. Prevor designed T-shirts and they sold them at local flea markets for $1 a piece.
Though both attended college, with Prevor enrolled in the Wharton School of Business at the University of Pennsylvania and Shore at Tulane University, they continued selling their wares at local flea markets. After graduation, the duo continued growing their business. Both were careful to reinvest their money in the business so they could continue to sell their T-shirts for a dollar.
In 1985 Prevor and Shore opened Steve & Barry's University Sportswear in Philadelphia. The majority of their merchandise was the University of Pennsylvania's clothing. Though they could not continue selling their wares for $1, the company did sell clothing at a price that constantly beat the university bookstore's prices.
Prevor and Shore continued to open stores around the country, usually near a college or university campus. The company continued to make a profit, thanks in part to their low prices, low overhead costs, using little advertising in favor of word-of-mouth, and shrewdly using the United States' Harmonized Tariff System to their advantage. Also, the company's clothing, though sold at rock bottom prices, was made with quality products that may be slightly off, thanks to Prevor's skillful tariff engineering. By having the majority of the clothes made in different countries, especially those that had lower tariffs like Jordan, Swaziland, and Madagascar; or by adding such things as more cotton or ramie in a garment or making sure that a jacket was lined with a waterproof coating, Steve & Barry's University Sportswear saved millions and promptly passed the savings on to their customers. In addition to tariff engineering, Shore and Prevor also allowed their distributors the flexibility to pack their wares tightly and hold off shipping until the cargo hold was at capacity. In a Newsday article posted at the Atlasphere website, Shore stated, "Our slogan can't be 'We won't screw you,' because that just can't be a slogan. But they [customers] know they can come to us and not be taken advantage of."
By 1998 Prevor and Shore had opened eight stores around the United States. Their stores in Michigan came to the attention of a Taubman Centers employee who thought their concept would work well at one of the malls in the area, Great Lakes Crossing. The companies began negotiating and soon Steve & Barry's University Sportswear had opened their first mall store. The company also expanded their lines to include everyday wear for men, women, and children. The merchandise's prices still remained at $10 or less.
After opening at Great Lakes Crossing, Shore and Prevor as well as Taubman Centers saw immediate success. Customers flocked to their store to purchase quality clothing that did not put a dent in their pocket. In an interview with Greta Guest of the Detroit Free Press, David Weinert, senior vice president of leasing at Taubman, said, "It is a fun store, it is an exciting store. I would call it throw-away fashion like H&M and Forever 21. Steve & Barry's brand is really patterned after them with a little Old Navy thrown in. Their opportunity is huge in this country." With an increase in traffic, the Taubman Centers found the mall packed on a regular basis, thanks in part to Steve & Barry's.
With this new development, Prevor and Shore saw a way to get their products to a larger consumer base that would increase their revenue. The company continued to expand by acquiring space in local malls in the Midwestern and Southern states. With many major retail and department stores closing across the country, mall landlords were looking for new retailers to anchor their floundering malls. Steve & Barry's focused on these locations where they could rent 50,000 to 150,000 square feet. They also negotiated strongly so they could keep the cost of rent down, but still renovated so each new store would follow the same style as the others. With its bright blue and yellow colors, a fun atmosphere that included loud music and televisions broadcasting ESPN, and continued record-low prices, the company consistently turned a profit with each new store opening. The increase in foot traffic at the malls also resulted in profits for both the mall and other neighboring stores.
Prevor and Shore also continued to keep costs low by furnishing their headquarters with second-hand furniture, sleeping in their newly rented space instead of in hotels, and doing their own secretarial work. While other stores are merging, shrinking, or even going out of business, Steve & Barry's had expanded to almost 100 stores in 2005, with plans to reach 120 by the end of that year. The duo also planned to continue their expansion by opening 60 more stores in 2006. Their revenues have doubled since 2003, and according to Peter Lattman of Forbes, "their chain should earn an estimated $50 million pretax on $700 million in sales" in 2005.
Prevor and Shore have had much success; their only negative has been the closing of their Purdue store due to a failed negotiation with Purdue University. Steve & Barry's University Sportswear is a privately held company with no plans to go public. Prevor told Divya Watal of U.S. News & World Report , "we're certainly exploring all our options in terms of raising capital and expanding beyond 80 stores to the 800 or 8,000 stores that we believe the company has the potential to achieve." As Prevor and Shore continue to expand others have taken notice. Lois Huff, a senior vice president at market-research firm Retail Forward, told U.S. News & World Report 's Watal, "Steve & Barry's is at the forefront of a trend in retailing—what's called extreme retailing.… They target the 'good enough' consumer." With their low prices and smart business acumen, Prevor and Shore are changing the way consumers shop.
"Cheapskates," Forbes, http://www.forbes.com/business/forbes/2005/0704/076.htm (October 7, 2005).
"Differing views force Steve & Barry's to close its doors," Purdue Exponent, http://www.purdue exponent.org/interface/bebop/showstory. php?date=2005/03/01§ion=campus (October 7, 2005).
"Luring the 10-buck crowd," U.S. News & World Report, http://www.usnews.com/usnews/biztech/articles/050919/19eeretail.htm (October 7, 2005).
"More from Steve & Barry," U.S. News & World Report, http://www.usnews.com/usnews/biztech/articles/050910/10stevebarry.htm (October 7, 2005).
"Pinching pennies: Steve & Barry's use many methods to cut customer costs," Southeast Missourian, http://semissourian.com/story/1118780.html
"Retail Clothing Entrepreneur Steve Shore," The Atlasphere, http://www.theatlasphere.com/metablog/316.php (October 7, 2005).
"Steve and Barry's relocates, creating world's largest 'M' clothing outlet," Michigan Daily Online, http://www.pub.umich.edu/daily/1996/sep/09-19-96/arts/arts2.html (October 7, 2005).
"Steve & Barry's Retail Revolution: The price is right," Detroit Free Press, http://www.freep.com (October 7, 2005).
"Steve & Barry's Scores A Hit," Retail Traffic, http://retailtrafficmag.com/mag/retail_steve_barrys_ scores/ (October 7, 2005).
— Ashyia N. Henderson