Local Stations Gain Center Stage At Store Of Knowledge A proven business rapport with local public television has positioned Carson, Calif.-based Store of Knowledge Inc. to make big gains in the nation's shopping centers. The chain's progress thus far -- embodied in 20 public station agreements and 30 stores in 15 states -- suggests that the mission of public broadcasting can add a unique, learning-based flavor to a specialty retail environment.
In 1994, Los Angeles' KCET was the first public TV broadcaster to add its station call letters to the Store of Knowledge name. With the partnership, KCET earned a minority ownership and, in turn, agreed to contribute its name, logo, reputation and promotional support to the store. Today, KCET has its brand on six Store of Knowledge locations in various shopping centers around its Southern California viewing area.
According to Laura Wynne, Store of Knowledge president and chief operating officer, the relationship between station and store gives the retail effort a tangible community credibility. "The relationship is really unique," she says. "What we've done is incorporate the mission of our local affiliate stations -- to promote lifelong learning for all ages and a higher value of entertainment -- and bring it to the retail level. We're based in Los Angeles, but with the station affiliation we can enter a market such as Atlanta and be instantly at home. People see their station call letters on the signage, and it really gives us the local flavor people look for."
Beneath the retail scene is a give-and-take mode of communication and support between station officials and Store of Knowledge's home office. Wynne says the stations put up no cash for their store affiliation; however, in exchange for the use of the station's call letters, the station agrees to help market the store through on-air underwriting spots and promotions, as well as an involvement in pledge and membership drives. Customers can become a member of the station via a telephone hotline in the store, while new members receive a gift certificate toward a purchase of Store of Knowledge merchandise.
The store's products reflect the mutual relationship between the two interested parties. The store features PBS-related videos, audio tapes, toys, games and books, as well as other merchandise such as computer software and hobby kits. The store also frequently welcomes such public television personalities as Bill Moyers, Julia Child and Bill Nye, the Science Guy.
"More than 30 percent of what we sell is PBS-related," Wynne explains, stating that, at the start, PBS products accounted for only 7 percent of Store of Knowledge's sales. "What [the increased percentage] tells us is that we've really done our job in tapping into the stations' marketing clout and in making the stores feel like the stations. Clearly, when you walk into a store, you realize the big presence of the affiliate."
The company is in discussions with more stations around the country and is considering upscale regional centers in which to set up shop. Wynne notes that the company also is looking at non-traditional retail such as entertainment centers, mixed-use developments and airports for future expansion. Confirmed sites for future store openings include The Fashion Centre at Pentagon City, Washington, D.C.; Valley Fair Mall in San Jose, Calif.; Lynhaven Mall in Virginia Beach, Va.; and a 7,800 sq. ft. flagship urban store in New York.
According to Wynne, Store of Knowledge will reach 50 stores by year end, on the way to 105 stores by the end of 1999. In each year following, the retailer plans to open 30 new stores per year.
Contact: Allen Sandish, director of store development, Store of Knowledge, 2695 E. Dominguez St., P.O. Box 6261, Carson, Calif. 90749; (310) 885-3242.
Fannie May Expands With RMU Concept For Chicago-based Fannie May Candies, life is seldom like a box of chocolates. With seasonally based operations and a custom kiosk design, the company knows almost to the letter what it is going to get.
According to Tom Vitacco, national sales director of retail licensing for Fannie May, the company's 340 permanent stores generate 60 percent of its annual sales during the 13-week period surrounding Christmas, Valentine's Day and Easter. Vitacco also notes that the majority of Fannie May's most successful stores reside in major regional centers.
With these statistics in hand, the company came to its current plan, which includes expansion into new markets with seasonally operated, state-of-the-art retail merchandising units (RMUs). "Everyone agreed that if we could simply focus on those seasonal spikes in business, we would optimize our profitability in our expansion effort," says Vitacco. "Why incur the expense of rent and labor during the moderate times when you can avoid doing that with temporary, seasonal retail?"
At the heart of the company's expansion plan, says Vitacco, is the new Fannie May kiosk, designed in partnership with Morton Grove, Ill.-based Schutz International. "We have created a proprietary kiosk that we feel is unlike anything that's been produced for the seasonal retail industry," he says.
With modular construction, the kiosk is designed to fit within the many parameters that developers set for their common area RMUs. "Restrictions from developers are somewhat variable, in terms of RMU height and width restrictions," Vitacco says.
"What we've created is a very modular device that expands horizontally and vertically, so we can adjust it to fit a 10 ft. x 12 ft. pad all the way up to a 10 ft. x 18 ft. pad," he explains. "Therefore, when developers tell us their measurement requirements, we are able to fit within their range."
Fannie May plans to enter 25 new markets by the end of the year, but Vitacco cites no specific expansion numbers for 1998 or beyond. However, he notes, "We think this concept has national opportunity written all over it. My sense is that, if this is very successful in its first season, there's no reason why we couldn't do a minimum of 50 or more in its second year."
The company's existing stores operate predominantly in the Midwest, with additional stores in New England, Virginia, Pennsylvania and Florida. The company's parent, Chicago-based Archibald Candy Corp., operates both the Fannie May and Fannie Farmer chocolate names (the latter as a result of a 1992 acquisition). Archibald sells an estimated 400 million pieces of candy annually through various channels of distribution.
Contact: Tom Vitacco, national sales director, retail licensing, Fannie May Candies/Archibald Candy Corp., 1137 West Jackson Blvd., Chicago, Ill. 60607; (312) 243-2700.
Acquisitions Ingrained In Wild Oats' Strategy Acquisitions of competing markets have proven to be a feather in the cap of Wild Oats, the Boulder, Colo.-based chain of specialty food markets. Last July, for example, Wild Oats purchased Alfalfa's Markets, a locally based competitor. As a result of the deal, Wild Oats gained 14 locations in existing Wild Oats markets, as well as three stores in Vancouver, British Columbia. By the close of 1996, the chain eclipsed the 40-store mark.
"Acquisition has been a substantial part of our growth strategy," says Greg Endom, Wild Oats' director of real estate. "There are many smaller operators that ... are reaching a level in their business cycle where selling their whole business [to us] has worked out." Since it was founded in 1987, the company has acquired six specialty grocery chains and operates four trade names: Wild Oats, Oasis, Caper's and Alfalfa's.
Although retail acquisitions can often imply an impending change of store identity, Endom says there can be good reason not to dismantle a community food market's respected trade name. "In some markets, we have both the Alfalfa's and Wild Oats in close proximity, and they've each developed their own unique character," he says. "[After the purchase of Alfalfa's], it didn't make good sense to rebrand the stores to Wild Oats and suffer some duplication in the customers' mind. In the same vein, some Oasis stores in Eugene, Ore., have a very strong following, and it makes little sense to interrupt that as well."
Wild Oats stores range in size from 5,000 sq. ft. to 35,000 sq. ft., and, according to Endom, the company has no prototype. "Every store is different, and it is designed with the community in mind," he says. "Some will have coffee bars or juice bars -- it just depends on what we perceive as the demand for that particular area."
The chain plans to open a minimum of eight to 10 stores per year over the next three to five years, says Endom. Although the company will continue to seek strategic acquisitions, much of the chain's expansion will result from new construction.
"We will see more focus in the next five years on new construction and new store development," Endom says. "We will do some freestanding sites, but we have many stores that anchor shopping centers, and we will continue to duplicate that success."
Wild Oats has two stores under development: A 9,600 sq. ft. site in Laguna Beach, Calif., is due for completion by the third quarter, and a 22,000 sq. ft. site in Westminster, Colo., will open in October.
Contact: Greg Endom, director of real estate, Wild Oats Markets Inc., 41 Shrewsbury Way, Pleasant Hill, Calif. 94523; (510) 935-8088.