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If you ran a help-wanted ad for a retail executive at La Curacao with a financing background and experience with the Hispanic market, you couldn’t do better than have Rick Hutton, president of the retail group, answer it. Hutton was vice president of store operations for Robinsons-May department stores in California and Arizona, and before that spent 15 years in the credit industry and was vice president of risk management for the credit card division of Bank of America.

As for experience with Hispanics, he has 26 years of it. “I’ve been married for 26 years, and my wife is originally from Ecuador,” he explains. “My sense of what you learn about our particular business and our customers is that it’s about a culture – it’s not just about language.

“It’s a very family oriented business, and for me, the fact that Spanish is not my first language has not been an issue, because it’s about the culture, and the culture is really about family,” he continues. “When customers shop in our stores, you’ll find more often than not, families shopping together in our stores. 

30th Anniversary

As the store celebrates the 30th anniversary of its founding by CEO Ron and Jerry Azarkman, chief marketing officer – who started by selling merchandise door-to-door – Hutton emphasizes the business’ service to the community over any self-congratulatory back-patting. 

“For us, it’s much more about how we served the community for 30 years,” he emphasizes. “We provide a tremendous selection of products and services, but it’s about our customers.

“You have two brothers from Israel who had come here who didn’t speak a word of Spanish, but because of their ability to communicate and their perseverance to build a company, they figured out how to communicate with people who spoke Spanish,” Hutton relates. 

He adds that the brothers still own the majority of the company. “This year, we will generate over $500 million in products and services,” Hutton says.

La Curacao’s first store was established in Los Angeles in 1983, and even the store’s complete destruction during riots sparked by the Rodney King verdict in 1992 could not close the company. The store simply was moved a few blocks down Olympic Boulevard to another location, where it has stood ever since.

Since 1995, La Curacao has been expanding the number of its stores. The company’s 10 stores throughout Southern California and Arizona not only sell big and small appliances, consumer electronics, auto electronics, computers, furniture, mattresses, jewelry, toys, books in Spanish and baby supplies, they also offer financing to customers along with other services its market requires. To add value to its products, these include cell phones and travel and money transfer services.

The company’s formula uses approximately 100,000 square feet of showroom space that emphasizes the family shopping theme throughout each of the company’s locations. 

“We’re much more similar to a department store,” Hutton asserts. “We carry all the major brands. I think you will find our stores are very competitive with national retailers in terms of standards. We take tremendous pride in terms of the presentation in our stores.”

Unique Services

One of the unique services Hutton highlights is the company’s export business. “You can actually purchase a product in one of our locations in the United States and have it delivered to a number of Central American countries, as well as Mexico,” he points out.

“We have, I think, a very unique business model, where we are not only an electronics company that sells other products, we also provide financing for individuals who do not have access to financing,” Hutton points out. “I think the combination has served us well, and it has served specifically the Hispanic market very well.”

The retailer has nine locations in Southern California and one in Phoenix. “In 2008, we added a number of new stores,” Hutton adds. “We’ve seen some significant growth. We’ve doubled in size from 2006 – a lot of that having to do with having 10 stores – and have expanded into the Arizona market. I would say that a milestone has been that we have become a better company in serving our customers. We’ve continued to grow as the community has grown.”

Curacao is the name of an island in the West Indies off the northern coast of Venezuela that was discovered in 1499. 

Online in English

Although La Curacao has a full-service website in Spanish and English, online sales are slowed by the reliance of the company’s customers on credit. “It’s taking a little longer to develop in the community,” Hutton concedes about the company’s website. 

“As we continue to grow beyond our current customer base serving much more of the general market, you’ll see the Internet business will continue to grow.”

To help reach new customers and second-generation Hispanics who speak more English, the company is running commercials in English for the first time, especially in its new markets.

“Although we are clearly known to all, we are much more associated with the first generation – those who have recently emigrated to the United States, who speak Spanish as a primary language in their homes,” Hutton explains. “We are finding a large group of people who have an interest in our stores, but you’ve got to create an environment both friendly and welcoming that doesn’t just communicate in Spanish.”

The More the Merrier

Consumer electronics and appliance retailers often find they do better when their locations go head-to-head with competitors located nearby. In electronics, the competition for independent retailers is moving from electronics big-box stores to warehouse clubs and general merchandisers. Hutton concedes a > number of national retailers are attempting to appeal to the Hispanic market.

“Although we may not be a national company at this particular point, our competition is,” he explains. “We compare ourselves to Best Buy in electronics. We also find that we do very well when we’re in locations that compete directly with a Walmart. 

It’s all about creating an environment where people have choice, and we feel as if we can be competitive,” he notes.

Hutton does not foresee the company becoming a national retailer soon but rather concentrating on expansion in the Southwest, such as locating stores in Texas. “I think for us to grow, it’s about efficiency,” he stresses. “We’re working very hard on both our logistics strategies as well as our merchandise replenishment strategies that will allow us to grow into other markets more efficiently in the future.”

Financial Responsibility

The economic developments of the last few years have made the company’s reliance on providing credit for its customers challenging, Hutton admits. “The credit environment is completely different than it was three years ago,” he notes. “I think that we really have a very sophisticated credit system – which is headed by Hector Perez, executive vice president of consumer finance – and has been developed over the last 30 years. Our system is very dynamic, and we have an exceptionally strong risk management team so we can continue to do business in an environment that is safe the to the company as well as the customer.”

He emphasizes the importance of credit safety for the company’s customers. “Our customers are extremely sensitive about overextending themselves,” he stresses. “You have to look at it from a responsibility standpoint, making sure you’re not putting people in a situation they can’t afford to be in. Ultimately, those are not good business decisions.”

Private Label

La Curacao is taking a page from the big boxes’ books in establishing private-label brands, which enable retailers to offer products at better margins with more exclusive features. 

“We have our own import division, so we have developed two TV lines named Pixel and Mega,” Hutton reveals. “These are required to compete with national chains both on price and quality. You’ll find those TV lines compete with any of the national chains in terms of quality and price.”

Another private label is Best Home, which is used on La Curacao’s line of small appliances, and private label lines of furniture. 

“We have an individual who flies back and forth to China and deals directly with the manufacturing plants,” Hutton points out. The company’s senior management team recently visited a number of manufacturing plants in China. Private label products now account for 15 percent of La Curacao’s overall business.

Mentor Philosophy

Hutton’s mentors include Robert Soroka, who was chairman of Robinsons-May and was named president and COO of Macy’s North in December 2005 after serving as chairman of Marshall Field’s until 2004. “I was very fortunate to work for Bob Soroka, who recently retired,” Hutton testifies. “What Bob taught all of us is that it’s not about power and authority, it’s about responsibility to your customers and the people who work for you.”

Hutton is proud of the difference La Curacao’s customers experience at its stores. “The thing that differentiates us from anybody is our associates,” he insists. “If you were to visit one of our stores, the nicest thing I hear from both customers as well as vendors is how welcoming our stores are, how absolutely amazing our associates are. I think that is what ultimately will determine our success.”

As the company’s mission statement says in part,  “We aim to improve the quality of life for indigent children and their families living in our community. We will provide them with basic items of need. We will broaden our assistance to victims in neighboring countries affected by natural disasters."