The entrepreneurial spirit grows in Ivy Cottage

Lissa Allen entered retailing for the same reason a lot of entrepreneurs do — she wanted to express her creativity and independence. She left a career in consumer products (she was a regional sales manager for Brach's candy) and opened Ivy Cottage in 1995 in Cary, N.C., and nine years later opened a second location in Raleigh.

Allen opened Ivy Cottage when there were few stores like it in the area. She started out leasing a 1,000-sq.-ft. location and as the business grew she kept expanding the store. The third time she had to expand she made the decision to buy her own building.

One of Allen's best business ideas actually unfolded as her business grew. As she brought in new categories and more product, Allen set up the stores in boutiques. Though she carries everything from furniture, lamps and rugs to tabletop, candles and gifts, Allen also has boutiques for women's accessories, jewelry, baby and garden.

The boutiques not only gave order to the displays, they also drew different customers. Most of Allen's customers are 30 to 55 years old with middle to high incomes.

"Just when I think I know our target customer, it changes," Allen said. "The younger people come in for the clothes and jewelry and the older ones are looking for things for their homes or gifts."

The Cary store features an espresso bar where specialty drinks, bagels and pastries are served and customers can relax and check their email via free wireless Internet access.

Aside from the plethora of product Allen offers, customers also enjoy the services.

Another service that's a huge part of the business is the in-home design service Allen offers. While employees help customers in the stores with decorating dilemmas and design suggestions, a big chunk of Allen's time is spent in customers' homes. She charges a $250 consultation fee and the customer has to spend $1,000 in the store within 60 days. Allen starts with a home visit, then brings her clients into the store where she offers suggestions on product, fabrics and designs.

Ivy Cottage is packed with product and Allen says she looks for things that have a "rich, unique look that you can't find just anywhere." The top selling categories are art, lamps, furniture and pillows.

"We're relatively close to High Point," she said. "So we have to knock the customers' socks off with our product and displays."

Though there's a small sale section in the stores, Allen avoids sales and keeps stock fresh by following her rule of never reordering anything more than twice.

She advises fellow retailers to really watch their inventory flow, which admittedly is a huge challenge. She also cautions against overbuying or getting too excited about an item and getting stuck with too many of them.

Allen has events in conjunction with local charities, like Anna's Angels (a group that raises money for Downs syndrome research), a Girls' Night Out during the holiday season and she's also become more aggressive marketing her Web site, ivycottagecollections.com.

"We offer employees incentives to get them to encourage people to sign up on our Web site," Allen said. "We use that mailing list to let people know about events going on, fashion or decorating tips, etc. We get a lot of response that way."

Allen has tried both television and radio and found the expense didn't pay off. Using her Web site in conjunction with a mailing list not only allows more direct contact with her customers, it also lets her get much more targeted with her marketing.

Ivy Cottage has grown to a $1.2 million company and while balancing a family and a business is tough, Allen said she enjoys the flexibility of being her own boss.