January was always the worst, says Goldstein, owner of Costume Specialists Inc. in downtown Columbus. That month often contributed as little as 5 percent to her companys annual revenues, she says, while sales in October always her busiest month with the Halloween rush typically accounted for more than 50 percent.
If you had a bad October, you were done or struggling or looking for refinancing, she recalls.
That annual adrenaline rush, coupled with Goldsteins regular scramble to keep workers busy during the frequent lulls, quickly grew tiresome. But instead of begrudging her plight, Goldstein set out to change it.
You see so many people who spend so much time bemoaning whats happening to them that they dont look around at what they can do, she says. Theres a natural ebb and flow of any business. I have to be smarter. I have to find things that fill the time periods to even that out.
Filling the seasonal voids in her nearly 19-year-old company with complementary niche businesses was a formidable, sometimes perplexing, task, she admits, but one that appears to be paying off. January sales now account for more than 10 percent of Costume Specialists annual revenues and the companys reliance on Octobers income to turn year-end profits has been cut almost in half. Nevertheless, Goldstein isnt ready to kick back and relax.
Just because your business is stable, that doesnt mean you should be comfortable, she says, noting that her $1.4 million company still does a substantial portion of its business in the fourth quarter. I hope I never lose that scramble, that hustle for a new niche. As soon as I do, Im dead in the water.
Creating the monster
Goldstein has always pushed herself to do more.
When she was a buyer for Lazarus Department Stores in the mid-to-late-70s, she sewed life-sized character costumes on the side for company sales meetings and special events. On a whim, she even bid on and won a $20,000 job to build a cast of Nutcracker-themed costumes for the annual Lazarus holiday display. It was then that Goldstein decided this hobby of hers could become a full-time business and she set up shop in her basement.
Although she soon won other corporate jobs from The Limited, Royal Doulton and New York-based Eden Toys, Goldstein had to take in some subcontracting work from a local childrens wear designer to keep herself and the couple of sewers she hired busy. Even in those early days, the need to diversify her business was already clear.
In an effort to bring in additional cash flow, Goldstein opened a small retail shop on the East Side in 1981. Although most of the stock was geared toward traditional Halloween costumes, the store also carried some theatrical garb and themed outfits for corporate sales events.
The shop brought Goldstein more customers, but fell short of being the regular or reliable revenue stream shed expected.
We went through the normal start-up retail peaks and valleys, she says. We struggled to get to Halloween.
In fact, Goldstein soon realized the store was running so much red ink in the early parts of the year that her business was lucky to get back to zero by the end of October. That scared her a bit.
It was such a seasonal business, she says. To remedy that, she added tuxedos to her offerings in 1984.
That had a good summer wedding business and prom season, she says. That bumped up business.
So much so, in fact, that Goldstein opened a second store the following year this one on the North Side, near Graceland. Then she further diversified her retail line by adding dancewear, which brought in customers during the August back-to-class rush and in April and May during dance recital season.
Expanding the variety of items she offered at the retail level worked like a charm. Store sales were becoming more constant and her theatrical offerings were drawing big-name clients like The Ohio State University, Otterbein College and Columbus Light Opera. Unfortunately, Goldstein couldnt say the same for the other side of her business, which remained dedicated to making team and corporate mascots like Max & Erma for the similarly named Columbus-based restaurant chain and PéPé the Penguin for The Kroger Co. It was still feast or famine in that area.
We were doing two or three costumes at a time, Goldstein recalls. Then, in 1989, Goldstein landed a gem of an order from Boston-based Childs World. The company wanted 176 Peter Panda costumes and wanted them in eight weeks. Goldstein was scrambling again.
I called everybody I knew with any talent whatsoever and we worked 12 to 14 hour days. It was an insane period in my life, but we got it all done and they were happy with the costumes.
Although the success of that project certainly was a feather in her cap, it left her with a slew of workers she had trouble keeping busy until the next big order came in.
When we had lulls, Id flip people over to sewing costumes for the retail store, she says. I always tried to keep my employees, but there were times when I had to lay people off.
Three or four times, to be more specific, between 1989 and 1995, she says. That made Goldstein gun-shy in recruiting highly skilled workers, for fear she couldnt keep them. It also pushed her to overextend herself.
Many times, Id spend all night sewing, she says. It was horrible. Id go home, put the kids to bed and come back here and sew the rest of the night. I wanted to hire someone that could do what I did, but that someone was a skilled person looking for a career and I didnt feel like I had a career spot to offer.
Something more had to change and quickly.
Theres got to be another way
Goldstein took a hard look at her income statements, the structure of her company and her prospective customers. She saw the potential for a lot of new corporate work, but she knew her company wasnt set up to handle large jobs on an ongoing basis. Her choice was clear: remain small and accept the highly seasonal nature of her business, or ramp up for bigger projects and get more aggressive about finding customers that needed life-size character costumes on a regular basis.
She knew what she needed to do to be successful, says Dennis Shaffer, vice president of commercial banking for The Ohio Bank, who has been Goldsteins banker for nearly seven years. She knew she needed to diversify her client mix and her business. It was just how she was going to go about doing it.
Goldstein opted for the leap of faith and leased a loft-style warehouse building on North Fifth Street which would accommodate the full-scale production department shed need to handle the big orders she was determined to land. Then she began actively pursuing contracts from large publishing houses such as Houghton Mifflin and Harcourt Brace, figuring there was money to be made in childrens book character costumes. Little by little, the orders started flowing in.
The larger warehouse space not only gave Goldstein more room for her still-small staff to sew popular costumes such as Curious George, Felix the Cat and Babar the Elephant, it offered her a more expansive storage area. That became particularly important when Goldstein stumbled upon her next big business opportunity in 1993.
While visiting a marketing assistant at one of her publishing house clients in New York that year, Goldstein noticed a cubicle stacked with large trunks of costumes waiting to be clea ned and repaired. A flip comment by the marketing assistant about how she hated that part of the job gave Goldstein an idea. I said to her, Would you pay somebody to do that? The instant, grateful affirmation was all Goldstein needed to hear; another facet of Costume Specialists was born.
Its been a huge stabilizing factor in the business, Goldstein says of the costume management division, which brings at least 25 costumes through her facility weekly for cleaning and refurbishing and requires the tracking of more than 200 other costumes each week as they move about the country making appearances.
Although it took a couple years for Goldstein to work out a reliable scheduling system, by 1995 shed won her first big costume management contract with Barnes & Noble and shed seen her last real sales slump. Now she had a career opportunity to offer her workers.
I have to laugh, Goldstein says. Despite all my design skills and creativity, the business stabilized doing laundry.
The companys revenues have grown more than 30 percent annually since adding the costume management division, Goldstein says, and its profit margins have increased.
Goldstein still sells Halloween costumes, tuxedos and dancewear through her Costume Specialists retail store, but shes consolidated to one location and no longer relies on that revenue stream to make or break her business each year.
I think she has a pretty good balance now, Shaffer says. As a business owner, you continue to experiment and find out what works and what doesnt. But she may have hit her little niche where she can be most profitable.
Preventing another slump
Diversification may have evened out Costume Specialists revenue stream and made the company more profitable, but that doesnt mean Goldsteins quest for stability is over. She recently began a marketing push to drum up more business outside the publishing arena, which brings in the majority of her revenue now.
I dont want all my eggs in one basket, she says, noting that about 90 percent of her costume management business and 75 percent of her production work is tied to publishing clients. I hit that industry at the right time with all the megastores growth, but the profitability of those companies is very iffy. Its an unstable industry and Im looking to diversify prior to any other changes or downswings in that industrys business cycle. If it were 25 to 30 percent [of my business], Id feel most comfortable.
To broaden her clientele, Goldstein is reaching out to restaurant chains and amusement parks.
Weve been somewhat involved in both of those, but not to the same extent as the publishing industry, she says. Amusement parks are naturals because almost all of them have characters now. Besides, the summer months are still a bit slow for Costume Specialists and thats a hot time in these industries.
Its the greatest thing in the world to get a client that is so forward thinking, says Ron Hagan, an accountant and adviser to Goldstein. Wendy has tremendous talent...and she can see the opportunities in her business to continue this expansion.
That's important since it's the only way Goldstein can stay in control and prevent her business from becoming too dependent, once again, on a particular season or industry.
Now our line of credit is focused on getting jobs not getting through a month, Goldstein says. It's a huge relief. It still gets light and we get slammed sometimes, too. It's just that kind of a business. But at least I can sleep at night in September now. "