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Carlos Sultan is a hard man to pin down these days. His only time for an interview is sandwiched between bank meetings, document signings, VIP guests and a procession of phone calls. But the flurry of activity is understandable--Sultan is on the brink of taking Venezuela's most successful retail business, Grupo Sultan, global. "Venezuela is a challenging market," says the energetic CEO, springing from his chair to head for another meeting. "If we can make it here, we can make it anywhere."

With US$500 million in annual sales, Grupo Sultan ranks as one of Venezuela's top ten private companies. It reached that spot during the last decade through a combination of innovative strategies in marketing, advertising and product supply that has turned its retail chain Graffiti into a household name across Venezuela.

Carlos Sultan and his brother Simon, each of whom owns half the company, have managed to pack stores with customers even during downturns in the oil country's roiling boom-and-bust economy. Though the government classifies 80 percent of Venezuela's 24 million population as poor, with little or no disposable income, Graffiti has gone from a single store nine years ago to 360 stores today. "They're brilliant businessmen," says Robert Bottome, director of the VenEconomy consultancy in Caracas. "They've done several things that others in Venezuela weren't able to do." Such as import fashionable clothing and household items at low prices, and reinvent their business as the political and economic environment has changed over the years.

Growing Pains Venezuela is now too small for the Sultans, whose father Abraham started the company 40 years ago as a retail outlet on Margarita Island. At the time, the duty-free zone there was the only place where imported apparel was allowed to enter the country Now the Sultans are negotiating with partners to open Graffiti stores in Argentina, Chile, Mexico, the Dominican Republic and Puerto Rico. And today Graffiti stores sell much more than clothing, including furniture, home fashions and toys.

What Carlos Sultan, 48, is most excited about is AsiaDirecto, a combination Internet/bricks-and-mortar wholesale outlet. The idea is to eliminate intermediaries by linking retail buyers in Latin America, the United States and Europe directly with Sultan's 53 suppliers in Asia. Sultan's company gets a commission on every purchase. "We've already negotiated good prices for the quantities we're buying, so [the new buyers] will tag into our quantities," Sultan explains. "We believe we have an incredible potential for growth."

Sultan predicts that AsiaDirecto, which is 30 percent owned by US trading company ColbyNet Limited, will help propel Grupo Sultan's sales to US$700 million next year. With a US$10-$15 million investment, the project will kick off in January with a 40,000-square-foot showroom displaying some 10,000 home products in Miami. Sultan then plans to open showrooms in Los Angeles and New York, by midyear in Frankfurt and Spain, and then Hong Kong.

Buyers will also be able to tour the showrooms and order products online, though Sultan stresses that the Internet is just a marketing tool, not the pivot of his business model. "B2B is putting buyers and sellers together, but in most cases it's just a fantasy The business doesn't exist," he says, blue eyes flashing with enthusiasm. "We already have a successful business--buying direct from the source--a winning concept we're making available to others."

A Sultan is Made If there's one thing that Sultan knows about, it's buying and selling. The day after receiving his business administration degree in 1975 at what is now the University of Massachusetts at Lowell, he was in Montreal buying for the family store, then just the one outlet on Isla Margarita called Abraham Sultan & Company The following year, he was already wondering where to take the business. "We were importing brand-name clothing from the US, but Venezuelans didn't know the brands and wouldn't pay my prices. We decided to create our own brand name and advertise it," he recalls, sitting in his small, windowless office that is practically wallpapered with photos of his five children. So Sultan created Graffiti, taking the name from a favorite movie, American Graffiti.

He lined up manufacturers in Asia and the United States to stock his store. The Graffiti brand was a hit for a while, but in 1983, when the bolivar crashed and imports quadrupled in price overnight, the idea no longer worked. It was time to reinvent the business--or at least the sourcing. "We moved to the mainland and started manufacturing, right here in this building," Sultan says of his current headquarters, located in La Trinidad, on the outskirts of Caracas. Even the decorations that festoon the hallways--colorful native art collected by Simon Sultan--reflect the idea of 'made-in-Venezuela.' The manufacturing facilities soon turned Sultan into a wholesale supplier, as well. "We were supplying all the traditional retail stores in Venezuela," he says.

Six years later, when imported apparel was allowed anywhere in the country, and the bolivar had recovered, Sultan went back to importing from Asia and shut down his domestic production. He started buying huge quantities of overproduction and seasonal leftovers from Asian manufacturers who had filled their supply contracts to top-name US retailers. "There were a couple of other Venezuelans who had this same idea," says Bottome. "But as Venezuelans have such a bad credit reputation, they couldn't get credit. Sultan went with cash in his pocket. He now has a reputation for paying on the line."

It was also at that time, at the end of the 1980s, that Sultan had his next business revelation: He realized it was the retailers who were making the most money "They were buying an item for 200 bolivares and reselling at 400 to 600 bolivares. I said to myself, 'Why don't I continue importing, but instead of selling to a third party, sell it to a company of my own, and instead of making a 50 percent profit, making a 300 percent profit?"'

Growth Spurt The first Graffiti store in mainland Venezuela opened in 1991, and rapidly established the chain's trademark of fashionable, quality merchandise at bargain-basement prices, albeit with the labels cut out. "The success was unreal. We had lines two blocks long," Sultan says. "People were very hungry for imported goods."

By the end of that year, there were five Graffiti stores; by 1996, there were 30. Sultan realized he didn't have the capital to keep the chain growing, despite the demand. So he started franchising, which enabled the chain to mushroom across the country to 360 shops in four years. He also added children's clothing, shoes, home furnishings, linens, toys and Christmas decorations, all in the Graffiti stores, and started buying through his own manufacturing contracts rather than overproduction.

Much of Graffiti's success has been due to its unique advertising campaigns, blanketing Venezuela's airwaves. The commercials feature irreverent humor; story lines are sometimes totally unrelated to the retail stores, but always underscore that Graffiti has the trendiest products at the best prices. One of Venezuela's top TV advertisers, in recent years Graffiti has consistently produced the nation's most popular ads, and those with the highest level of consumer recall, says Conrad Dahlson, a Caracas advertising columnist and former creative director. "It breaks with all the cliches of Venezuelan advertising--the girls, the quick cuts," he says.

The ads have also managed to break social barriers. "It's resulted in a kind of classless type of company," says Dahlson. "You don't feel like you're going to Pepeganga's (a cheap discount chain). It's a cool place, stylish, which coincides with the kind of thing they sell."

Now, Grupo Sultan is undergoing another reinvention at the hands of its creator. CEO Sultan has begun switching direction for Graffiti after witnessing the huge success of a handful of Graffiti department stores called Graffiti Mundo, which house all the chain's product lines under one roof. He's spending US$150 million to buy back some of the franchises --those who were hurt most by Venezuela's 1999 recession--and is slowly consolidating the chain into 40 to 50 company-owned Mundos at a cost of between US$10 million and US$15 million each.

Left with empty stores from the franchises he is consolidating, Sultan earlier this year launched a new chain called No Puede Ser!. About 70 percent of the products it sells are Venezuelan-made--compared to Graffiti stores, which have a product line that is 70 percent imported.