Still standing

LIHUE — Kauai’s Hilo Hattie store isn’t going anywhere anytime soon.

Even though the company is downsizing and relocating its flagship store on Oahu, company officials say the original Kauai branch will stay right where it is.

“We are going to continue with the Lihue store in that location and we’re actually right now in the process of renegotiating our lease,” said Mark Storfer, chief operating officer for Hilo Hattie.

The company announced the closure of the Honolulu store in September, and Storfer said the plan is to have the store and showroom moved by the end of October.

But news that the maiden store on Kuhio Highway is staying put is good news, according to local shoppers, economic experts and store employees.

Angie Fevella, from Koloa, said she shops at the store about once a month.

“Their stuff is good quality,” said Fevella, who said she’d miss Hilo Hattie if it went away. “It’s good material and it lasts a long time.”

When she does shop at the store that specializes in Hawaiian gifts, jewelry and clothes, it’s usually to prepare for an upcoming event.

“I’m here getting an aloha shirt for my son,” she said recently. “He has a concert tonight and he needs something to wear.”

Bankrupt again

In January, Hilo Hattie shuttered stores on Maui and the Big Island. A few days later, at the beginning of February, the company declared bankruptcy for the second time in seven years.

The first time was in 2008, when Hilo Hattie cited $23 million in debts. The company landed in the hands of Donald Kong in 2009, whose company, Royal Hawaiian Creations, was one of Hilo Hattie’s creditors. Back on its feet, Hilo Hattie kept its head above water until this year.

This time the company said they owe just over $13 million to more than 200 creditors. Their next step is an Oct. 16 hearing with the U.S. Bankruptcy Court in Honolulu.

“We will be emerging from this bankruptcy by the end of the year and the creditors will see payments shortly thereafter,” Storfer said.

Storfer said the company is concentrating on its remaining stores, their line of island-themed uniforms, and the website.

“We have future plans to open up smaller stores on Oahu, probably initially in Waikiki, and we’re looking into opening up stores on neighboring islands as well,” Storfer said.

Sumner La Croix, professor and chairman of the University of Hawaii’s Economics Department, said today’s economic market is tough for retailers, and restructuring isn’t all that uncommon.

“The good news for Hawaii retailers is that the Hawaii economy continues to grow, and the number of tourists, a group who likes to shop, also continues to grow,” La Croix said. “The bad news is that competition from Internet retailers continues to grow and that traditional businesses need to constantly restructure or face problems of relevance or cost.”

Hilo Hattie’s history

Hilo Hattie sits on Kuhio Highway in Lihue, kitty-corner from the KFC, and just a mile away from the airport. The 13,000-square-foot building seems unassuming from the outside, but the inside gleams with polished floors, souvenirs and racks of neatly pressed aloha wear. Chocolate dominates a section of the store, offering different selections of decadent treats, and if you’re lucky, you’ll find a pearl at the jewelry counter.

The company has deep roots on Kauai. The island was home of the chain’s very first store. It was founded as Kaluna Hawaii Sportswear in 1962, on a strip of land between Lihue and Kapaa. The name was changed to Hilo Hattie Fashion Center in 1979, and the original store was moved to its current location, a former bowling alley, in 1982.

“It’s been on the island for a long, long time,” said Angie Yago, one of the store’s employees. “They could close all the other ones and this one would still be standing.”

A local player

Hilo Hattie in Lihue sees about 10,000 customers a month and employs 15 people, according to the store’s manager, Stirling Conrad.

“We’re actually hiring right now,” Conrad said. “So yeah, the Hilo Hattie on Kauai is going strong.”

Conrad said he sees the restructuring of the company as a new beginning and is looking forward to new stores opening in the future.

“They are a legacy retailer on the island,” said J Robertson, board chairman of the Kauai Chamber of Commerce. “In terms of employment and retail sales, they’re important.”

Robertson said he’s not worried about the company’s future because he watched it bounce back from the last time it filed for Chapter 11 reorganization.

“They’ve been a great corporate citizen and have always been interested in being engaged in the community,” Robertson said. “They have a dynamic impact on our economy, especially when you think about sales tax revenue.”

Yago said she’s been working for the company for seven years, and she absolutely loves it.

“The best part about working here is the ohana of the employees, all of us are a family,” Yago said. “I wouldn’t go anywhere else. I love working at Hilo Hattie.”

According to Yago, it’s the aloha spirit and excellent customer service that keeps customers coming through the doors.

“We spread aloha with leis and juice, chocolate and coffee for every customer,” Yago said. “It’s all part of the experience, but we also have really great customer service.”

Part of a ritual

The store is especially popular with tourists and shopping there is a ritual for many vacationers, like Californian Wanda Poindexter.

“I would be so sad if we lost the Hilo Hattie here on the island,” Poindexter said. “We come here for two weeks, every two years and it’s a tradition to go to Hilo Hattie.”

Poindexter said she likes the clothing at the store and usually buys at least a few shirts for souvenirs before she goes back home to the Yosemite area.

“They have the best selection of Hawaiian clothes around the area,” Poindexter said. “It makes perfect souvenirs.”

Dan and Jenni Bingham, from San Francisco, said they’ve been vacationing on Kauai for three years and they always stop by Hilo Hattie for the same reason — the store has a huge selection.

“You can find pretty much anything you need when it comes to Hawaiian clothes and souvenirs,” Dan said.

Jenni said the store has a great selection of kids’ clothes, too, which is great for family photo days.

“They also have all of the chocolate and the candy here, pretty much anything you need as far as souvenirs,” Jenni said. “I’m really glad they’re not closing down. It would be so sad. It’s great that it’ll still be here next time we come to the island.”