NEW YORK — In retail, there are sales associates and, then, there are sales associates. Confusing them would be like mistaking canned tuna for sushi grade.
The first group, according to the U.S. Department of Labor, Bureau of Labor Statistics, earned $8.47 an hour in department stores in 2004, or less than $18,000 a year. Members of the second group, catering to affluent big spenders, routinely sell $1 million or more worth of luxury goods in designer boutiques and specialty stores for an income of at least $70,000. A handful of elite salespeople sell $5 million to $6 million a year, earning $300,000 to $350,000 annually.
“It’s not unheard of to have associates that sell in the $1 million or $2 million range,” said Michael Celestino, executive vice president of store operations at Barneys New York. “As good as they are, they know they can continue to have more opportunities to build more relationships, sell more and earn more money.”
Base salaries at designer stores are $10 to $15 an hour and commissions usually start at 3 percent, said a former retail executive who asked not to be identified. Giorgio Armani, for example, uses a tiered commission system — associates receive 2.5 percent on the first $25,000 worth of sales and 5 percent thereafter.
It’s not unusual for different product categories to command different commissions. Gucci, which has a developed accessories business, pays 3 percent commission for sales in that area, but 6 percent in the less developed ready-to-wear sector. Armani, on the other hand, wants to encourage sales of accessories, a business it hopes to grow, so the company offers employees 6 percent commission, while rtw garners 3 percent.
“There is definitely big money to be earned,” said Roberto Lorenzini, president and chief operating officer of Versace USA’s retail division. “Usually the best associates sell more than $1 million or $2 million a year. An associate can earn from $150,000 to $250,000. The highest I’ve heard of in the industry is an associate earning $500,000. It depends on the brand and how the commission is structured, but it’s easily in the six figures.”
Bob Mitchell, co-president of Mitchells, in Westport, Conn., and Richards in Greenwich, Conn., said he employs 30 associates who sell more than $1 million a year, 10 of them selling over $2 million and three selling over $3 million. The two stores specialize in designer and contemporary merchandise.
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The elite sales associates, whose so-called black books, or customer lists, are highly valuable, are coveted by the competition and closely guarded by their employers. There’s no school to prepare for a career in the sales stratosphere where the air is thin, but some retailers think they’ve found a formula for hiring productive associates.
“We’ve developed a sales associate selection tool based on dozens and dozens of interviews with our very top sales associates,” said Ginger Reeder, vice president of corporate communications at Neiman Marcus. “We believe we’ve isolated the characteristics those people share. We use the tool, which includes a written test, during the initial hiring process and see how they score.”
Reeder cited some common characteristics, such as enthusiasm, optimism and friendliness, although she declined to discuss more subtle traits. After a candidate passes the written test, he or she is subject to one-on-one interviews. At Neiman’s, a first-year sales associate receives 150 hours of training, everything from product information sessions with vendors to how to write thank-you notes.
“In the last six or seven years, everybody has been looking for the associate with the great book,” said a former retail executive, who asked not to be identified. “Ten years ago, I could go into the coffee shop and meet a waitress and say, ‘She has such a great personality, let’s recruit her and train her.’ Now companies want results from Day One.”
Maria Fei, vice president of Louis Boston, said the store’s personality attracts offbeat employees. “We believe style is something they’ll grow into,” she said. “They have to have an energetic and charming personality. It takes a really special person to sell, someone who’s happy and has a way of speaking that makes you listen. Our candidates come from all walks of life. A lot come here right out of school and stay. We love artistic people and people majoring in art because the store is artistic and eclectic.”
At Barneys New York, the clothes do make the sales associate. While some stores place a stronger emphasis on a candidate’s outlook than outfit, Celestino said, “The individual needs to project an appropriate fashion point of view. It’s important for the person to have a true passion for the business. Because they do big business, it’s good for them to have a strong business acumen. They need to be entrepreneurial. When they join us, they don’t necessarily have to have our fashion point of view, but they have to adapt.”
Versace’s sales associates must have champagne taste. An understanding and appreciation of their clients’ lifestyles is key. Lorenzini said associates should be sophisticated, well groomed and well educated. “They need to speak professionally, in a soft way that’s not too distant or too friendly. They need to have a lot of common knowledge and refinement. They need to know where their customers go on vacation and what parties they attend. Some clients fly the associates to their homes. They should know how this lifestyle and environment works.”
“I don’t go out to recruit million-dollar sales associates,” said Jeffrey Kalinsky, founder of Jeffrey New York. “I don’t generally recruit from my competitors. If somebody comes to us with experience working at a great store, that’s great and we got lucky. We also love to hire people who’ve shown they’ll stick with a store even if it’s not a luxury store. We can teach them our way of customer service and selling. Having a passion for fashion isn’t the only reason a person can be great. What about a person with a passion for people, or a single mom with two kids at home who’s motivated to earn money?”
A former executive at a European design house said the sales floor of a luxury brand, while elegant and sophisticated, is often not as genteel behind the scenes. Sales associates don’t always behave collegially when $10,000 evening gowns and $4,000 handbags are at stake.
“Sales associates try to get away with things,” the former European executive said. “They don’t have autonomy. They’ll try to take the merchandise that’s on hold for another sales associate’s client because they need it. There are a lot of people who have $1 million books that get recruited from store to store. As you go up, it’s harder to give up a secure environment. Anyway, they’re not that heavily recruited because they’re prima donnas.”
She said the highest-earning associates receive a bonus and participate in merit programs in which they can win prizes. If the store achieves its goals, they earn an extra 1 percent commission. “The companies want to keep them happy, but then it gets out of control,” she said. “They get to go to the collections and they get trips to Italy. Uniforms are now the big thing. Associates are given company-mandated uniforms, but if they’re part of the merit program, they can select something from the collection.”
Lorenzini doesn’t believe in sales incentives. “The best incentive we can give them is to really make them feel like they are part of the brand,” he said. “That will really retain them. If you offer an incentive once in a while, the associate will always wait for them. We don’t want the associates to look for contests. We want them to be part of the team and work together.”
Louis Boston’s associates’ compensation isn’t based on commission, which eliminates some of the competitive behavior, Fei said.
“It’s teamwork and they get along well,” she said. “It’s not that cutthroat kind of business. We pay them well. It’s about their performance. They each have a section of the store that they’re in charge of. Debi [Greenberg, owner] is good at making them feel that they have ownership of the store and ownership of their shops. Knowing that the team needs you makes for a congenial and happy environment.”
Every designer has produced a less than stellar collection at one time or another, which should be just a blip for the sales force, Lorenzini said. “The good associate can find the best pieces for the customer,” he said. “They know it’s going to be temporary. Besides, the best associates would never focus on one season. Without a medium- to long-range view, you can’t develop the clientele. You need time. It’s part of the game for each brand.”
It’s not just job security that makes it difficult for associates to jump to another designer firm. Star salespeople have a clientele that’s built upon the brand they’re selling. An associate working for a designer with an older customer base would have trouble taking his or her book to a more forward company.
“Finding great salespeople is a challenge,” Barneys’ Celestino said. “They could come from a competitor or from another industry with similar skill sets. We have hired people from the hotel industry, the financial industry and the art world.”
Several retailers, including Saks Fifth Avenue and Holt Renfrew, have turned for insight to the Four Seasons Hotels and Resorts, which has a reputation for superior service.
“You can’t teach people to be innately friendly and genuine and service-oriented,” said Elizabeth Pizzinato, a vice president at the Four Seasons. “When you have an unhappy customer standing in front of you, that’s when the rubber hits the road. People are hired for attitude first.”