Bowing to competition,fannie’s folds

Just before Sept. 11, 2001, Kathleen “Fannie” Doxer opened the eighth location of her namesake factory warehouse store. Six months later, in March 2002, the brand new Springfield, Va., store closed – along with three other Washington, D.C., area outlets.

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“I never even saw the finished store,” said Doxer, 53, better known as “Frugal Fannie.” “That was a direct result of Sept. 11. Washington became a horrible market.”

That, Doxer said, was the beginning of the end for Frugal Fannie’s. Two weeks ago, she and her husband Orrin, Frugal’s cofounder, announced plans to close their four remaining Massachusetts locations, in Westwood, Framingham, Brighton, and Reading. Doxer said the stores will stay open until everything is gone, which she expects to be within the month.

“It’s a tragedy, what can I say?” said Doxer during an interview last week in the company’s Westwood headquarters. “I never knew how loved Frugal Fannie’s was. The outpouring of affection and despair – it makes me feel good, but it makes me feel sadder, too.”

In the beginning, Doxer said, the plan was to play off womens’ love of bargains. The Westwood location began as a distribution center for several smaller apparel stores the Doxers had owned since the mid-1970s. When one of their wholesale customers went out of business, Doxer said, her company was left with $3 million worth of goods that needed to be sold. So, they opened a small section of the distribution center to the public on weekends only (because of its location in an industrial park, weekday parking was limited).

The Doxers came up with the familiar store name after they witnessed the “frugal Yankee mentality” during a trip to Maine. Orrin Doxer’s mother, Annie, was a bargain shopper, and, using alliteration, Frugal Fannie’s was born.

Since the first store (a 40,000-square-foot warehouse) opened in 1983 just off Route 1 in Westwood, Frugal Fannie’s has been as much a local institution as a place to shop. Area women have spent their weekends sorting through the store’s overwhelming collection of off- price clothing and shoes.

Patience was a virtue at Frugal Fannie’s – as was a willingness to change in a communal dressing room, stand in long lines, and leave husbands behind in a TV-equipped waiting area near the front of the store.

“We love shopping here together,” said Kathleen Kiely, a Medfield resident and Westwood native who visited the liquidation sale last week with her daughter, Megan, 17. The two were waiting in the checkout line with a cart full of spring clothes and prom shoes. “It looked like it was doing so well.”

According to Doxer, several factors, including a shift in women’s work apparel and competition from other discount stores, such as Marshall’s and TJ Maxx, and the rise of clothing sales at mass retailers such as Target, Wal-Mart, and even Costco, led the company to tough times.

“There’s a big price difference between suits, and T-shirts and pants,” said Doxer. “It forced us to change our merchandising strategies . . . the dollars weren’t adding up.”

Add Sept. 11 and a recession, said Doxer, and the future looked dim. By the end of 2001, she said, the company knew it had to close its Washington stores; and it began downsizing its staff of 100 full- time and 400 part-time workers.

This year, Frugal’s creditors got nervous and the lenders “tightened up our credit,” said Doxer, eventually putting all credit on hold. As a result, Frugal’s was forced to pay cash for everything last fall and “we couldn’t stock our stores in a timely manner,” said Doxer. When inventory levels suffered, sales dropped.

Finally, the tough winter, increased competition from one-day sales at department stores, and the war in Iraq “brought us to the point where we couldn’t continue operating profitably,” she said. Although customer counts were up over the past year, the amount women spent per visit was down because clothing is cheaper. With eight stores, Frugal Fannie’s had annual sales approaching $80 million, Doxer said. Last year, the four Massachusetts stores did about $35 million in sales.

When lenders imposed an April 10 deadline – either come up with new financing or close and liquidate, the Doxers chose the latter. They’re also considering filing for Chapter 11 bankruptcy.

“Once the news broke, it was mayhem,” said Doxer, who was bombarded with cards, letters, phone calls, and e-mails from customers.

Sandra Zola of Sharon said she went to the Westwood store right after she got wind of the closing. Last week, she was back for more – with her friend Deborah Bloom, a former Newton resident living in Toronto.

“There’s no comparison in the quality to Wal-Mart or Target or any of the other stores [Doxer] says are infringing on her,” said Zola, as she sorted through the sale items. “The shoes are the best,” she added.

According to Jon Hurst, president of the Boston-based Retailers Association of Massachusetts, local retailers have been struggling for much of the past decade to maintain profit margins while keeping prices low.

“We have what is really the most competitive region in the country in terms of retailing and very value-conscious consumers,” said Hurst, whose association represents 2,200 retailers across the state. “High real estate and employment costs make it especially expensive for companies to do business in the region.”

As a result, he said, regional retailers can either take lower profits or raise prices, when facing competition from national chains with more buying power.

“It’s a very difficult environment for a lot of these stores,” said Hurst, citing Caldor, Bradlees, and Lechmere as other examples of failed regional chains.

Nonetheless, Hurst said, he was surprised to learn of Frugal Fannie’s closing. “I think they had a really strong, loyal following,” he said. “There’s no question about that. I think they had a nice niche. I can only assume the profitability is not there today like it was a few years ago.”

For Westwood, Frugal Fannie’s was “a good, solid business for 20 years,” said Town Administrator Michael Jaillet. The store’s weekend- only hours (which expanded last summer to include Thursdays) kept the area traffic flow calm, he said, and the town benefited from being mentioned in every Frugal Fannie’s advertisement.

“We’re sorry to see Frugal Fannie’s go,” he said. “It’s going to create a vacancy and it’s going to take some time to fill.”

Jaillet said town officials plan to work with the property owners – Mark M. Kisiel and Edward R. Werner, trustees of the Framingham- based Mac Donald Trust – to attract another business to the site. According to the assessor’s office, the property is assessed at $3.57 million and is paying about $74,400 to the town this fiscal year in property taxes.

As for Doxer, she and her husband plan to clear their heads during a vacation to St. Maarten, and eventually get back into retail. “I need to reinvent myself,” she said.