Travel Markets Insider / March 2006
By Larry Luxner
PORT OF SPAIN — Sixty years after its establishment by an Austrian refugee fleeing Nazi persecution, Stechers is gradually climbing its way back to respectability.
The Trinidadian company was founded in 1945 by Hans Stecher and his father in an attic above a barber shop; it eventually grew into one of the Caribbean's top luxury goods retailers, with 13 shops on three islands. These included the 2,500-sq-foot flagship store on Frederick Street in downtown Port of Spain, a Stechers outlet at the Trinidad Hilton and another on the nearby island of St. Vincent.
Ten years ago, Stecher sold the well-known company for an undisclosed price to Lawrence Duprey, a powerful businessman whose holdings include life insurance, financial services, real-estate and petrochemicals as well as interests in liquor brands Angostura Bitters, Fernandes rum, Hine cognac and Marie Brizard.
But Duprey didn't have much luck with Stechers, and the chain rapidly went to pieces.
"When we bought Stechers, the economy was in a downturn, and Hans Stecher was selling luxury goods," Duprey told us. "At that point, the company needed a lot of investment, and I don't think he would have gotten any support from the banks. But now things have changed, Trinidad's per-capita income has increased considerably and we have more experienced people. We are starting to grow again."
Stecher, 82, has a different take on things.
"They made a lot of mistakes in my view, and it grieves me to see how the luster of Stechers is gone. A lot of lines were lost," the veteran retailer told Travel Markets Insider. He noted that the company which bears his name went through four non-Trinidadian CEOs before finally settling on local executive Sheena Thorpe to run the business.
They had poor management for the first few years before Sheena, but she's certainly making an effort," he said. "She is really trying to bring Stechers back to what it once was."
Indeed she is. As a teenager, Thorpe was enchanted with Stechers, and at 19, she bought her first Rosenthal crystal there — never imagining that, one day, she'd be running the company.
Thorpe, 47, spent 15 years in New York studying at the Fashion Institute of Technology and later working for Arthur Court Designers, a manufacturer of high-end tabletop trays. One day, Lawrence Duprey's wife Sylvia walked into her Manhattan shop and was immediately impressed with Thorpe's confident, cheerful attitude. Mrs. Duprey immediately offered Thorpe the chance to return to her native Trinidad and turn Stechers around.
Thorpe jumped at the opportunity, but was appalled upon seeing the shops for herself.
"They were selling straw hats in the stores. They didn't have a clue," she said of her predecessors. "When you're dealing with luxuries, you have to know your customers. They didn't understand the culture of Trinidad & Tobago. They weren't reaching out to the people."
That was in 2001. In that year, Stechers had annual revenues of TT$16 million (US$2.7 million). Four years later, under Thorpe's leadership, sales have jumped to TT$27 million (US$4.5 million), and for 2006, she's expecting revenues of TT$32 million to 35 million (US$5.3 million to $5.8 million).
Profits, meanwhile, are expected to rise from TT$2 million (US$330,000) in 2005 to around TT$3 million (US$500,000) this year.
"My vision for Stechers is to keep this on a high level. I think it's a privilege to be able to purchase merchandise at 33% off the U.S. retail price," said Thorpe, who supervises 62 employees. "I believe duty-free should be something special, not something you can get everywhere. In terms of gifts and jewelry and perfume, we should be able to purchase things we can't get on the local market."
Stechers now has 10 outlets, including a 2,500-sq-foot duty-free shop at Trinidad's Piarco International Airport and a 500-sq-foot liquor shop in the same departure lounge. Stechers also operates a 500-sq-foot duty-free shop at Tobago's Crown Point Airport. The other seven shops are scattered throughout the country and are strictly for the local market.
Thorpe said her shops' most popular liquor brands are Johnnie Walker Black, Absolut vodka , Black & White, Hennessey and 1919 rum. Top perfumes are Lancome and Ralph Lauren. Cuban cigars are also popular, especially Romeo y Julieta an Cohiba.
At Stechers' airport duty-free shop, liquor and tobacco make up 46% of all sales, followed by perfumes (35%); figurines, handbags, accessories and other gift items (14%) and watches and jewelry (5%). About 60% of departing passengers purchase duty-free items at Piarco, with the average sales ticket coming to TT$600 (US$100).
Thorpe said she has two competitors at Piarco: BWIA International, a Trinidad-based airline that operates its own duty-free shop, and Dufry (formerly Weitnauer), whose main store is located directly across the departure lounge from Stechers.
"We have nothing outside Trinidad & Tobago, but that's where we're heading," said Thorpe. "We'd like to be the premier retailer of luxury merchandise in the Caribbean, starting with Barbados and then St. Lucia. Eventually, we'd like to go into Miami."
She added: "We're really small, because we're not like Barbados, which gets tons of cruise ships. We're trying to develop tourism, but it's very difficult because we don't have wonderful beaches that are easily accessible. You have to drive into the hills to get to the beach."
Trinidad is best-known for giving the world calypso and the steel pan drum. In fact, music is a major tourist draw — especially at Carnival, when Trinidad throws the Caribbean's biggest, loudest and most decadent street party. Tourists also flock to Tobago, Trinidad's smaller sister island noted for its sun-drenched beaches, spectacular harbor views and solitude.
Yet tourism certainly has a long way to go in Trinidad, an island blessed with petroleum and natural gas reserves and therefore not dependent on tourism revenues like most other Caribbean nations.
"It took me a long time to get the government and the public to realize the tremendous potential of this sleeping giant," said Stecher. "When I started preaching about tourism, people didn't want to know. They weren't able to make a distinction between service and servitude."
Stecher added: "I'm convinced that until recently, the fundamentals of success in tourism were not really identified. In my view — apart from niche markets — these fundamentals are the following: resort hotel development on the beaches and free-port shopping, including for locals, and constant advertising, promotion and publicity in proportion to the number of rooms available."
Currently heading Trinidad's tourism promotion efforts is James Hepple, president and director of the newly established Tourism Development Co. of Trinidad & Tobago Ltd. (TDC). In May 2005, the TDC replaced the now-disbanded Tourism and Industrial Development Co. (TIDCO) in a government restructuring that acknowledged the need for an entity focusing strictly on the tourism industry.
"Ten or 15 years ago, there was an independent tourism board that was merged into TIDCO, because at that time, the government felt that all non-energy activities would best be handled under one entity," Hepple said. "But the government later realized that this diluted efforts being made to develop the tourist industry.
Hepple, a Canadian, was deputy director of tourism in the Bahamas from 1995 to 2001, and executive director of the Curaçao Tourist Board from 2001 until his current appointment last August. At the TDC, he oversees a staff of 44.
In 2004, according to official statistics, the country welcomed 442,000 air arrivals; of that total, 380,000 came to Trinidad, and 62,000 to Tobago. Hepple estimates that in 2005, those numbers rose to 500,000 tourists (420,000 to Trinidad, 80,000 to Tobago). Total tourism expenditures came to $420 million in 2004 and around $450 million last year.
"The numbers keep going up every year," he said, despite concerns over Trinidad's alarming increase in violent crimes, including kidnapping. "We've seen three years of back-to-back, 8% growth, so crime is clearly not having much of an impact."
Hepple said 36% of all air arrivals to Trinidad & Tobago come from the United States, while another 23% come from neighboring Caribbean countries, 15% from the United Kingdom and 10% from Canada. About 75% of those visiting Tobago stay in hotels, while only 18% of visitors to Trinidad stay in hotels (since many of them are visitors from the Trinidadian diaspora who stay with family and friends).
Even so, he said, "we've got demand running way ahead of supply" with only 1,500 rooms in four- and five-star hotels and an average hotel occupacy rate in 2005 of around 85%.
To encourage more tourism, the TDC will spend $18 million this year on tourism promotion, one-third of which will go to the U.S. market.
Hepple acknowledged that more tourists might visit Trinidad if its capital city were more appealing. Despite the country's oil wealth, Port of Spain has a dingy, industrial air to it, with raw sewage often flowing in drainage ditches along city streets. Its waterfront is distinctly ugly, and it lacks the romantic charm of Old San Juan (Puerto Rico), Charlotte Amalie (St. Thomas), Bridgetown (Barbados) and other Caribbean ports of call.
To that end, the government has proposed an international waterfront project expected to cost $300 million to $400 million in its first phase alone.
The project is being overseen by a government agency known as the Urban Development Co. of Trinidad & Tobago (UDECOTT) on land being leased from the Ports Authority. Envisioned is a 428-room Hyatt hotel composed of twin 26-story towers, along with retail facilities, a conference center and a car park that can accommodate up to 1,200 vehicles.
A division of CL Financial Ltd., which is headed by Duprey, is involved in construction of the hotel and other aspects of the waterfront project, which is slated for completion by November 2007.
Part of that redevelopment plan involves relocating the cruise-ship port. The current temporary facility, measuring 13,000 square feet, was opened Jan. 17 at a cost of around $1 million. It contains a large crafts market, large reception area, Internet cafe and 16 souvenir shops.
Balkaran Maharaj, PATT's supervisor of cruise shipping, said he expects 85,000 cruise-ship passengers in the country this year, up from 67,000 in 2005. This year, he said, Port of Spain will get 30 to 40 port calls, while Tobago will receive between 40 and 50 visits.
According to PATT statistics, the overwhelming majority of cruise passengers are British (81%), followed by Americans (11%), Germans (3%) and Canadians (2%). In 2003, the average cruise passenger spent TT$253.00 (around $42) while in port.
"We look at working together with our neighboring destinations," said Maharaj. "We have a close relationship with Barbados, Curaçao, Margarita and Grenada. We don't really see them as competition, rather as the deep southern Caribbean. We all have a chance of getting a piece of the pie."
Yet Stecher says legislation governing the local duty-free industry could be revised to bring even more tourists to Trinidad & Tobago.
"I proposed that a selected list of the major tourist luxuries — watches, jewelry, silverware, crystal, perfumes, liinens and leather goods — should be reduced to a maximum 6% duty, and that anybody could buy these items."
Stecher insists that such a system would not hurt Trinidadian businesses, "On the contrary, local industry benefits, because once a place has a reputation as a free port, tourists buy not only luxury imports but also local goods," he told us. "Women like to shop, and they want to be exposed to a lot of shopping. These are the major attractions in most Caribbean ports."
He added: "We have an in-bond system, but in Trinidad, it requires that the merchandise be sent to the point of departure, and that deflates buyers' enthusiasm, because tourists have to part with their money before they can take possession of the goods. In Barbados, they've done away with that. They give the people their merchandise in a sealed bag."
In the final analysis, says Stecher, natural beauty is not crucial to success, though it certainly helps. The proof, he says, is that smaller Caribbean islands with much less to offer than Trinidad & Tobago are pulling in hundreds of thousands of tourists a year.
"You could have a paradise and nothing will happen," said the veteran retailer. "Man-made attractions make the difference, like hotels, freeport shopping and promotion in the marketplace. You could have a sandbank in the Bahamas, or a rock like Aruba or a swamp like Disney World, and they become the most successful tourist destinations in the world. If you have have the natural attractions as well — on top of the man-made ones — it's impossible to fail."