The exact point at which her specialty retail dream came true is a little sketchy, with all the exciting opportunities it has afforded her since April 1997. But Marci remembers that first early-morning trip to her new "headquarters on wheels." The cart in which she invested everything sat bare in the White Marsh Mall in Abingdon, MD. She remembers the fresh smell of polished oak, the echo from the desolate hallways, and the butterflies that fluttered in her stomach just before the doors of the mall were to open.

"I was so nervous the first day that I was reluctant to leave the cart at all," Marci recalls. "I remember asking a person to watch my purse every time I had to leave." But the purse held little that day: she had invested all she had—$2,000—into the business.

"That was not a lot of money, and some people would say they couldn't get started with that. But you can if you're willing to work, reinvest your income, and realize the great opportunity carts provide in getting your work out there."

Inspired with a zeal to succeed that had her working 80 hours a week, Marci continuously looked for ways to improve the marketability of her product, from folding T-shirts in a way that highlighted the imprinted designs, to capitalizing on her color scheme. "Black-and-white makes a big statement when you're in a colorful mall, and it allows me to merchandise differently for every holiday... If I wanted to use red packaging and red tissue, it coordinated well... If I wanted to use green, that worked as well."

Now she uses some high-tech strategies to market the cart, such as her website. "I don't sell through the site. It's set up to be informative and provide the consumer with more information on where to buy my products." For 12 years before 1997, Marci Struzinski (she no longer uses her surname) earned a modest income hand-painting floral designs on women's apparel. But the self-taught artist says she received some divine guidance encouraging her to do more with her talent—designing simple figures in black ink on white backgrounds, with brief messages of acceptance and inspiration about "basic family values and beliefs that many people are looking for," she explains.

Selling from a cart gives her daily contact with her market, allowing her to capture the thoughts and feelings she shares with them. "From the perspective of an artist and a designer, to be able to bring my work right out to the public and get first-hand reaction is priceless," she says. "I get as much inspiration from customers as I give to them, because they constantly reinforce what I'm doing and thank me for what I create. And when you're working hard, you need that."

Specialty retailing has also given her mobility. In 1998, she moved to the Harford Mall, which offered more space and opportunity. "I made the move, first, to be closer to home, and second, to get the sales figures that would be paid attention to," she explains. "There are consumers with more money to spend at the mall I chose to move to."

The move translated into a $100,000 annual income. "I'm still not in a killer mall. I'm sure there are probably 100 other malls in the country where I could do twice that amount with my cart."

Within two years of opening her cart, Marci signed with a licensing agent (Art Impressions of Canoga Park, CA), who introduced her to several manufacturers. Papel Giftware (Cranbury, NJ) produces a line of key chains, mugs and ceramic picture frames with Children of the Inner Light design. And Stephen Lawrence, also in New Jersey, is interested in licensing gift bags and wrapping paper. Marci says licensing will help continue her dream of developing a more diverse line of merchandise, such as dolls, gold and silver jewelry, and the licensed apparel concept that already generates significant sales. "I'm selling a $47 hand-painted Children of the Inner Light denim shirt that I can't keep in stock."

Her cart program also catapulted her T-shirt line into the national spotlight. "I've recently partnered with Coed Sportswear, Inc. (Newfields, NH) to distribute my T-shirts nationally. We'll be making our debut at the Atlanta Gift Show in January." And as if all of this weren't keeping her busy enough, she's also working toward publishing a book of daily inspirational thoughts.

As in any business, Marci has had some surprises during her entrepreneurial career, starting with her first drawing of a newborn. She targeted the drawing to children because she thought adults would not identify with the concept. Much to her surprise, adults began requesting her designs for products geared toward the mature market.

What started as 26 greeting cards has grown to include a portfolio of T-shirts, matted frames and wall hangings depicting licensed Children of the Inner Light designs. She is also recognized as a point of contact for other would-be specialty retailers. "So many people come through the mall, see my set-up and say 'Can you tell me how to do it?' In fact, I think my cart program has tremendous potential for being a nationwide entity with franchise potential."

She says her next step in specialty retail is to move from a cart to a kiosk. "I have so many products now, that I'm looking to develop a great holiday and Christmas program." As for the time commitment, she says, "You really only need to work eight weeks a year to make tons of money. It's common for carts to do $60,000 to $80,000 in eight weeks. So I can continue my cart program in addition to having my products in gift stores all over the country throughout the year."

According to Scott MacHardy, owner and licensing director of Coed Sportswear, Marci's cart program is what catalyzed the company's interest. "On a tip from a good source, I happened to be in her area, and her entire cart really helped me understand what she was trying to accomplish. That's how I got excited about doing the apparel end of it." MacHardy attests that he's "a big fan of carts and kiosks anyway, and I liked the way she was using a lot of wicker fixtures, tables... It really worked for me. Everything really hung together nicely."

Born of her experience and success, Marci has advice for rookie specialty merchants:

• Be there. Be willing to work a lot of hours yourself—especially if you're testing a new product—because what you learn first-hand from customers is invaluable.
• Put together a cohesive collection of product, and show it in a neat, attractive way, so customers have variety.
• Let the mall help you with merchandising and promotional tips.
• Have literature available to give to customers. "It's an extra expense, but putting together a fold-over brochure explaining my history and my concept is the best investment I've made." Many times people will stop and look but won't buy, so give them something to remember you with.
• Make the customer happy, no matter what.

Marci takes customer happiness seriously. She even altered her identity, just to make things easier for them. "I found that my last name—Struzinski—was so difficult for people to write on the check, that I opened my business account under the name 'Marci,'" she says. "Being an artist, I just sign everything with my first name." She even set up her telephone account that way. The phone company representative said, "What? Like Cher?" And with that same independence, talent and moxie, she said, "Yeah! Marci."

Tom R. Arterburn is Executive Director of The Resume Institute.

Be Your Own Boss: Blog Four

A self-proclaimed pioneer of cart commerce in the New England area, Gary Bliss Garabedian, Aah! La Cart's president and CEO, began his entrepreneurial career at a time when pushcarts were still identified with corner peddlers and street vendors. But he recognized intuitively the profitability of making direct contact with large groups of customers in a mall environment.

Back in 1981 when he was traveling in Boston, he saw his first retail cart in a local marketplace. "When I got back to Warwick [RI], I approached my grandfather, who is a partner in the Warwick Mall, and talked to him about placing one in his mall. Well, he called my father and told him he thought I was a little out of it." Despite that skepticism, however, Garabedian and his girlfriend (now his wife), Laurie, got the $2,600 he needed to get started with his first pushcart, purchased from Peckham Woodworking in Hollister, MA. "They were one of the only companies that made carts back then," he recalls.

Garabedian's string of success started with printed shoelaces. "At the time, it was a very big fad to have whales, teddy bears and other images printed on shoelaces. So I just hung them around the cart like salamis, and it turned into a phenomenal success. My first Christmas season I did $40,000 in gross sales. For a kid just out of college, there was a lot of profit in that, because back then the mall rent was much less, and I had very little payroll." With this financial momentum, he started a second cart at another mall, where his program ended up being "the only cart in town"—a niche that benefited from the empty hallways that seemed to funnel shoppers directly to him.

But the 39-year-old admits that besides timing and good luck, personal traits like intuition and assertiveness spawned his accomplishments. In his younger days, Garabedian was known for pushing boundaries. "When I was a rookie, if I saw more people at one end of the mall, I would wheel the cart to that end," he laughed. "The mall manager would come and scold me: 'Why are you moving the cart all around the mall? Everyone is going to get to you eventually,' he would say."

Nonetheless, Garabedian continued with his aggressive approach, a technique he formulated at age 13. "When I was a youngster, I was always interested in making money, whether it was waxing cars in the neighborhood at 13, or selling fruit-and-nut products at flea markets when I was in college," he recalls. With this level of enthusiasm and self-determination, Aah! La Cart's business strategy has focused on product diversity, with lines that capitalized on a number of lucrative fads over the years, including Rubik's Cube in 1983 and Cabbage Patch Dolls in 1987.

Proving to himself that sales didn't always depend solely on the product's popularity but on hard work and a sound business strategy as well, Garabedian embarked on a philosophy of expansion and diversification. "We found we were very capable of doing 12 different concepts at once and doing them at various malls," he says. The key to the success of that approach was thoroughly researching the products as well as his competition: continual visits to other malls in the region to examine their specialty retail programs. He watches traffic flow, demographics, and competitive marketing strategies to determine what he can duplicate or what he can do better.

In the early '90s, the company expanded into more extensive holiday programs, which included temporary in-line novelty stores operated under the name Land of Aahs. "We did pretty well with them," Garabedian says, "but we found that being open year-round led to much greater overhead, and that our cart and kiosk locations, operating simultaneously, were much more profitable." So three years ago, they sold the stores "to concentrate 100 percent on any type of temporary retail—store, kiosk or cart. For the last three years, we've done a 5,000-square-foot temporary in-line Halloween Superstore [contiguous to the mall], a Halloween Headquarters for Kids kiosk, and a costume rental shop, all in the Warwick Mall."

He admits, however, that the temporary in-line strategy includes more risk. "The mall always allots space strictly for Christmas tenants, but Halloween is a different situation," he says. "If a major retailer is interested in space, the mall is going to lease that space. So if they don't have any available space, we can be shut out." On the upside, he says that if you can find space, you'll pay much less for it during the Halloween season than you will during Christmas. "For instance, this year our Halloween season was 35 percent over what we did last year," he explains. "And we had more competition than we've ever had in the past. We had three other retailers within a five-mile radius, and saw all the major retailers starting to capitalize more on the season, which proved the success of our formula: having a lot of customer service, a lot of employees on the floor, and a lot of personalized service." He says that's critical, because people don't have time to spend with mass merchandisers where they get little assistance, see products poorly displayed (or worse), and learn that the products they want are sold out.

And since employees are a crucial part of the success of his promotions, Garabedian motivates and retains good employees by means of incentive programs. "We award our sales associates with [Aah! La Carte] 'Boo Bucks' in different denominations that they can apply towards purchases at any of our seasonal kiosks."

Garabedian also competes by using unique promotional concepts—like the huge, illuminated pumpkin that helps tout his Halloween superstore. "It's pretty much a trademark for us," he says. To keep the creative marketing momentum going, this year he hired a promotional director, whose job is to promote the Halloween business through costume fashion shows, costumed employees and other in-store promotions. "We also do a Web site that gets a lot of hits."

Aah! La Cart takes the conglomerates to task at Christmastime, as well. This year the company introduced Aah! La Cart Sports, which marketed numerous licensed sports-related gifts, novelties and memorabilia in a kiosk environment. Year-round, the company markets Fun Feet slippers and Lipink, in addition to helping others get into the specialty retail business. "I work as a consultant, helping those interested in opening a cart but who don't know what to do."

What about the challenges of specialty retailing? Rather than dwell on negatives, Garabedian prefers to focus on the positive. "In my opinion, the products we sell are fairly recession-proof, because when the economy is bad, people look for fun things." However, he does pay attention to economic trends, prompting him to respond with appropriate marketing strategies. "When the economy is good, we've found that people tend to purchase high-ticket items: jewelry, cars, vacations, rather than lower-priced impulse items. Therefore, this year I joined with a partner and sold rotisserie ovens at $170 per unit, and they sold like crazy."

The company's expansion plans for the rest of this year include licensing the Halloween Headquarters concept to "hauntrepreneurs," expanding cart operations into other malls in the New England area, and pushing more limits, breaking more rules.

Tom R. Arterburn is Executive Director of The Resume Institute.

Be Your Own Boss: Blog Three

Take a look inside outlet centers. Defined as properties in which 50 percent or more of the tenants are manufacturer's outlets, these centers are another viable option for setting up shop. Dayne Sieling of Retail Ventures, Inc. in Minneapolis says 12 to 15 percent of his expansive specialty retail programs, which focus on marketing demonstration-oriented products, are located in factory outlet centers. "And if there were more of them, we would do more," he says. "They tend to provide a strong market segment for us because when someone goes to a factory outlet center, they are not browsing—it's an event. They're going there with their wallets full [and] their credit cards loose. [The centers] typically have music and videos going... they're decorated in a festive way, and it's a fun experience centered on that 'stack 'em high and let 'em fly' philosophy. And we like that type of shopper," Seiling explains, "because they tend to be more impulse-oriented and impetuous." As a result, "if we compare our factory outlet center sales to traditional malls, our average monthly sales at Christmas would certainly be higher."

Yet according to Linda Humphers, editor of Value Retail News, the growth in outlet center development has recently waned. "It has slowed down quite a bit from the late '80s and early '90s. Now we have only about four or five outlet centers opening in a year, and only a million square feet being added, due to the retail demand and the fact that there are only so many places they can go, due to the sensitivity of competitors," she says. "If they locate too close to metropolitan areas, their wholesale accounts get mad."

But here's the good news: Humphers says that although sales volumes in the outlet sector have been down in the last year, sales per square foot do exceed regional malls. According to data her organization collected:

• Average outlet sales per square foot increased from $211 in 1995 to $232 in 1998.
• Estimated total outlet sales jumped from $10.7 billion in 1995 to $13.3 billion in 1998.
• In the last ten years, the number of newly-opened outlet chains grew from 308 in 1988 to a high of 543 in 1995, but have since dropped off annually to 492 in 1998.

Prime Retail, LP (Baltimore) started building its outlet segment in 1996 at their open-air, village-style and strip centers. Ted Kaminski, director of specialty leasing, says, "We placed some small-cart programs at some of the centers in the warmer climates like California, Texas and Florida that we maintain year-round." As for trends, he says, "We've increased the number of clearance events held at outlet centers by coordinating with manufacturers like Tommy Hilfiger and Samsonite, and hold those [events] either in the parking lots or in unrented space." Kaminski says they do that in Arizona, too, "but there, we also have carts and kiosks that give the local craftsmen and entrepreneurs a chance to do business."

Mirroring the malls

The stereotype that outlet centers are best suited for outdated products or close-out merchandise is a myth, Kaminski says. "We're mirroring what's happening in the retail malls—the carts in the outlet centers are handling a lot of the same trendy merchandise like Beanie Babies™, yo-yos and Pokémon™ products. But the difference," he says, "is that the cart programs in the outlet centers are required to hold sales or discount the merchandise." For instance, Prime Retail has a deal with Calendar Club, a national seasonal tenant, that stipulates offering a discount. So from the day Calendar Club opens in November, their calendars are marked 10 percent off.

Heidi A. Maybruck, director of specialty leasing with Glimcher Realty Trust (which handles 23 mall properties that include three outlet centers), sees no difference between a "value center" and regional mall when it comes to specialty leasing. "I see the same types of leases and the same types of trends. I think the only difference is that they have to show value just like the centers where they are located. When customers enter a value center, they're thinking discounts and best buys, so retailers have to enforce that in order to survive." Kaminski agrees. "If customers travel 45 minutes to an outlet center, they expect to get some type of discount. That's what sets us apart from the regional malls."

Kaminski says Prime Retail's specialty-retail leasing rates vary with each center because the sales volume and traffic vary from location to location. "The foot traffic is different from that of an enclosed mall," he says. "We start doing our holiday volume in early November through mid-December, and then the outlet centers quiet down when the regional malls pick up. "If you're a temporary tenant coming in for the holiday season and you're looking to do a Christmas deal, the rate may be more affordable than the mall." But he stresses that the temporary tenant in that case should "open as soon as possible in October, because you want to take advantage of the heavier foot traffic in early November through December." As Christmas gets closer, shoppers are less likely to drive an hour. Most of their shopping will be done at their local community shopping centers or regional malls.

A different slant on value

Mills Corporation, which has value centers in enclosed malls, believes strongly in specialty retailing as well, but offers a different mix of tenants. "We have manufacturer and retail outlet centers, discounters, category killers, as well as theme restaurants and entertainment complexes," explains Ned Katzman, VP, Main Street Retail (a subsidiary of Mills). "We have Nike, Ralph Lauren, Nautica and Ann Taylor outlets, as well as Dave & Buster's, Rain Forest Café, Bed Bath & Beyond, Bass Pro... all mixed throughout the mall in a dynamic fashion. We like to think that we have it all." And that includes a strong cart program.

"We recognized early that we could have a cart and kiosk program in our malls, and that segment is just phenomenal," says Katzman. "They continue to grow and generate a good revenue stream for the company, and often incubate into in-line merchants. We generally incubate a dozen or so merchants each year."

Katzman is optimistic about the future of specialty retailing in his sector. "The demand for kiosks and pushcarts is growing dramatically," he says. "The common-area opportunities are able to deliver revenues that help make up shortfalls from other revenue centers. We found that, with our traffic patterns, cart programs can be sustained easily because of our high levels of tourism."

As to rates, he says, "We would charge on the high end, comparable to what an upscale mall would charge... We are very competitive on rent for what we offer, which is a higher level of tourism and more traffic."

Another assumption about outlet malls is that they are short on staff and short on time, due to their high-volume atmosphere. Not so, according to Denise Hammer, programs and services manager with Main Street Retail, which operates nine outlet centers throughout the country. The support her company offers is comparable to that of a traditional mall. "We actually hire a professional visual merchandiser who comes in and conducts the initial meeting with the tenant," Hammer says. At that meeting they devise a shopping list of things that will attract attention, enhance marketability, and help the specialty retailer shine in the fast-paced, high-energy environment these centers create. The visual merchandiser also assists with setting up.

Programmed for growth

Main Street Retail reports traffic flows at their busiest centers to be two to three times greater than that of regional malls in the area. "With all the centers we have currently operating in the United States, we attract more than 150 million shoppers per year," Hammer says. The lucrative business has also led to an increase in cart and kiosk operations over the past few years. "We currently have within each center forty to fifty carts and kiosks. We typically open with thirty carts," she says. "But next year we are looking to open with forty, and each year we add five to ten carts at least."

Tanger Factory Outlet Centers (Greensboro, NC), with 32 properties in 22 states, has identified the potential for specialty retailing in their centers as well—so much so, that they recently hired Wendy Johnson, CSM, CMD, as specialty leasing representative. Her role is to develop a specialty retailing program.

"Most of our centers are outdoor, so the opportunities at our northern locations would definitely be seasonal," says Johnson. "But many more are located in tourist destinations close to major cities. For instance, we have a center in Casa Grande, Arizona, where they have the international O'Odam Tash, a Native American festival, which brings in hundreds of thousands of people on an annual basis." Johnson says these are excellent opportunities for all types of specialty merchants. "I wouldn't say no to anything until we looked at it."

Johnson says highlights of Tanger's program will include:

• Cart rental, "unless someone owns their own."
• Captain's chairs, "so everything looks consistent and organized."
• Merchandising assistance.

Like most developers, Johnson doesn't discuss statistical averages on traffic flow and sales volumes. But she does say that "most of our centers usually attract more than 700,000 cars per year, with several [centers] that are over a million."

Overall, opportunity for specialty retail in outlet centers is growing. According to those in the know, cart and kiosk entrepreneurs in outlet centers can be every bit as successful as those in traditional malls. And the strategy for success is virtually the same: research, negotiate and sell a killer product. The only difference? Stack 'em high and let 'em fly.

Tom R. Arterburn is Executive Director of The Resume Institute.

Be Your Own Boss: Blog Two

Some people might think all teenaged "cart jockeys" are flighty, unfocused clock-watchers with a 'zine in one hand, a snack in the other and the radio blaring—kids whose goals and plans barely push beyond scoring pizza for dinner and tracking down the next gotta-have-it CD. But those people are wrong. Jon Scheerz is proof.

Seven years ago, Scheerz was just 17 and working a retail job. But unlike the so-called slacker teen, Jon had aspirations, and more. He had the willingness to invest the time and hard work it takes to forge a long-term career in specialty retail—a career that started, ironically enough, with typical teenage trials and tribulations.

Jon began his career selling golf equipment and specialty items part-time at an in-line golf store in Burnsville, MN. One Saturday during the Christmas season, the owner of Retail Ventures dropped by after lunch and found a large group of potential customers peering angrily into the store through the metal gate. Obviously the store was closed.

"The owner thought I had just decided to close up shop and grab lunch or go shopping," Scheerz says. "But I told him we were having a record day—more than $3,000 by noon—and I had to get more change for the register." So the owner stayed and worked alongside Scheerz for the rest of the day.

Within a month (and still just 17), Scheerz was promoted to store manager. As such, he also started traveling with the owner to the company's 40 direct retail stores and pushcarts, as well as supplying more than 20 owner-operators at the same time. Scheerz stayed with Retail Ventures and helped the company grow into a diversified corporation that specializes in, as he puts it, "making specialty retail marriages."

Some background: When Retail Ventures started in 1994, the cart industry had taken off and was expanding. At the time, specialty retailers believed their particular cart program/product, whatever it was, would last forever. Contradicting that belief was a prominent mall developer who said that cart owners who think this is an ongoing career "couldn't be more wrong." The contrarian was right: The specialty retail industry and the mood and tastes of the buying public move too fast for anyone to sell exactly the same product year after year. And so the industry and the retailers have to evolve.

Retail Ventures found that evolving—and therefore surviving—meant that they had to find new products, sign on more owner-operators, and help malls establish more cart programs. At the same time, malls were growing at enormous rates without enough product diversity to support their growth. They needed and wanted help finding new concepts for their owner-operators. As a result, a great demand rose for someone to develop and market new lines for manufacturers who were new to specialty retail and didn't know how to distribute their products to the increasing number of cart owners.

Retail Ventures saw their opportunity. They could rely not only on their expertise in manufacturing products in the past, but on the experience gleaned from the mistakes of their corporate and owner-operator locations throughout 15 states. They did the research. And Scheerz was there.

Today, the company offers turnkey opportunities in which entrepreneurs can inexpensively and conveniently open their own business. More than that, they are involved in a program in which the product concept is proven through different malls and other test markets—a way to avoid the risky "stock and rock" approach.

"You really only have a few weeks to learn your product line," Scheerz says. "A lot of operators, mall developers and manufacturers still don't understand how difficult it is to physically go out to the merchandise and trade markets—to find, source out and create their own line of products for a cart operation. And then be successful with that product line within a 60-day window during the Christmas season."

Retail Ventures knew how to package a product line so that an owner-operator could run the business successfully, without having to worry about testing the product and the market first. They took away the guesswork, and catapulted themselves into the business.

Being the first representative company in the specialty retail industry as well as the largest has meant years of work for Scheerz and the Retail Ventures staff. "The reason we have been able to locate new products and open successful owner-operator programs is that we understand the industry," he says. "We're retailers ourselves. This allows us to focus on and understand the operator's needs more than anybody else in the industry."

Within the past six years, Scheerz and Retail Ventures have represented 30 different product lines, and brought more than $1.5 million in wholesale to more than one manufacturer during the first year of representation. Scheerz says they focus on between just nine or twelve a year so that they don't lose sight of the best product lines. "[This] allows us to offer the owner-operators and malls a chance to rotate in and out of product lines through the year," he says.

Retail Ventures has opened more than 800 owner-operator programs, with the majority of owner-operators active within the specialty retail industry. The company employs six people in the office, and will hire as many as 30 seasonal workers to manage their direct retail programs.

Today, at age 25, Scheerz has an impressive resume with considerable retail experience, including visual merchandising and retail manager of Merry-Go-Round Enterprises, as well as district and regional manager of other large retail chains throughout the country.

In addition to operating some of his own retail carts, he recently purchased the company that generates more than $2 million a year for their manufacturers, and projects more than $3.5 million this year. On the direct retail side, he projects more than $250,000 in sales during Christmas, and more than $500,000 in 2001.

Keys to being successful, he says, include choosing the right products and maximizing efficiency. "We have always been a big supporter of operating multiple units within one mall, versus operating one cart in ten different malls at the same time," he says. He finds that it's much easier for owner-operators to expand within the same mall with different product lines, due to their knowledge of the mall, mall procedures, sales figures, demographics, and past product successes. And placing a second cart next to a proven one can significantly cut some expenses in payroll, rent, shipping, storage, telephone and more. "It's much more productive to buy for two than just one," he says. "And as most operators know, on a Monday morning the mall's not the busiest place in town, so it's very easy... to operate two carts side by side."

Retail Ventures is in the business of growing specialty retail businesses. The company's key strategy, Scheerz says, is to stay in the forefront and make sure they assist in bringing the industry to the next level by finding new products... working with malls to locate qualified owner-operators... and helping those owner-operators succeed. And Scheerz, retail's Whiz Kid, is leading the way.

Tom R. Arterburn is Executive Director of The Resume Institute.