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Friday, July 18, 2008
John Haugh
President
Mars Retail Group
Offering shoppers an alternative to the mid-afternoon java break, the Illinois-based Ethel's Chocolate Lounge serves up truffles, fondue and cocoa drinks in some of Chicago and Las Vegas' most-trafficked retail areas. John Haugh, president of Mars Retail Group, which operates the lounges, speaks with WWD correspondent Molly Fergus about making award-winning chocolate while maintaining a contemporary brand.
WWD.COM: How did the concept for Ethel's Chocolate Lounge develop?
John Haugh: If you look at the landscape for gourmet chocolate, what tends to happen is you have all kinds of players. The shops all look the same, the industry plans to sell a bunch at Valentine's Day and the holidays, and the rest of the year you don't sell much. So we said how do you change the game?... It's really clear, the consumer really told us what they want is good, premium chocolate when they want it and they don't want surprises. They don't want something that's too weird. So we said what if we just take premium chocolate and make it more everyday, like others have done for coffee and bottled water and bread.

The second thing we found was when we talked to women, we said, "When you get a nice piece of chocolate, where do you eat it?" There was no real defined spot. So we thought, wouldn't it be neat if you could just create a chocolate room, sort of an oasis. So we said instead of just being another gourmet chocolate shop, what if we changed the game; we said let's give people great chocolate in July and Valentine's Day, and let's give women a place to really enjoy this.
WWD.COM: Can you describe your typical customer?
John Haugh: The core of our demographic is 25 to 39-year-old women. That's the absolute core. That said, the larger circle out is 20 to 50-year-old women. That said, the other day I was working at one of the lounges and two 12-year-old girls came in and they wanted to put a box together for a friend's birthday, and they wanted to put together exactly what she liked best. If you and I walked in together, we'd probably also see a 55-year-old couple on a date having a fondue together. It runs the gamut, but it's really women who know what they like.
WWD.COM: Many of your stores are located in high-traffic shopping areas -   Chicago's Michigan Avenue and Armitage Avenue, Las Vegas' Fashion   Show Mall. How do you choose where to build your stores?
John Haugh: I think you're always trying to balance a couple of things. You're trying to balance impulse versus destination. You get a whole bunch of people, and you just intercept a whole bunch of people. The business loop in Chicago is a place we've looked at, but you struggle with the fact that by 5:30 or 6 most of the population density has gone home.

The second way to look at it is destination. As you build the brand, people will come look for you... We're not at that stage yet, but we try to find a balance of impulse and being a destination where people will come search you out because they want to have a chocolate party.
WWD.COM: How does the style and design of your store change depending on its location?
John Haugh: I think what we try to do is we try to have some consistent visual cues: comfortable furniture, chocolate everywhere, iconography that's done in chocolate. That's consistent, but for instance our lounge in Lincoln Park was an old house that we basically converted. We did the whole thing and made this brown really cool house that's all about chocolate.

Then we have another lounge on Michigan Avenue in the Northbridge shopping mall. That was tougher because you've got glass everywhere and noise and it's harder to create an intimate environment in a place like that. Lincoln Park was easy, but in Northbridge you take a couple of steps up and see our chocolate, and behind that we've created as much of an oasis as you can ever find on Michigan Avenue. We try to make the concept fit the space.
WWD.COM: Although chocolate lounges aren't as common as coffee shops,  there are other chocolate-cafe chains, such as Moonstruck Chocolate Company. What sets Ethel's apart from other similar concepts?
John Haugh: I think one thing is that literally in the last ten years, food has become where chefs are kind of the new rock stars, with food just becoming fashionable. Our goal is to be contemporary, but not forget that it's still going to be great chocolate. There are some brands that have gotten so avant-garde; I try a lot of chocolate, and sometimes I'll have a piece, and I say, "I have no idea what that's supposed to taste like." We want to find what is the balance between being contemporary but making sure chocolate is still fun and has a great taste.