Jaws dropped at the NAMTA Show last year when Bill McKean announced at a roundtable that his AM store had grown by double digits – again. Retailers speculated that he was either mistaken or nuts, and moved on to other issues.
Meanwhile, Bill’s words stayed with us and we called him recently for clarification. Yes, he assured us, Creative Coldsnow, with two locations in Kansas City, continues to experience solid growth. He reminded us that it didn’t happen overnight – the store is approaching its 30th anniversary. Instead, over the years, the McKeans made crucial decisions and implemented programs that assured their business of growth. Here’s what worked.
They focused on growing from the beginning.
Bill, then a corporate sales rep, and his wife, Marianne, bought the existing Creative Crafts and Hobbies shop in 1979. It was a 450-square-foot storefront in a strip that included five others. “My wife had been a homemaker since we were married, and we were at a point where we wanted to do something together,” explained Bill. “I was somewhat familiar with the art, craft and hobby industry from representing a macramé line. I looked at the art supply market and saw a sleepy industry that had not been impacted by mass merchandisers. In the long run, I thought, it would be a sector difficult for the mass merchants to cover. When we found Creative on the market, we purchased it. We started out smaller than small.”
They expanded gradually, eventually buying their building and taking up the other storefronts. Retail square footage grew to 7,000, with an additional 4,000 square feet in the basement for frame production.
Their business was never their hobby.
Over the years, the McKeans watched while the other independent AM stores in Kansas City closed. “There were probably 20 to 25 small stores like Creative that sold art, craft and hobby supplies,” Bill recalls. “The giants were Keith Coldsnow Artists Supply, Morris Langley and Rex Clawson’s. Today they’re all gone. We purchased the inventories of about half of the small ones, and a portion of the closing inventories of Morris Langley and Clawson’s.”
Doors were closed during the last recession, when owners retired and couldn’t sell, and when the stores, Bill guessed, lacked focus.
“A lot of them were mom-and-pop operations like ours, but for some of them, it was a hobby more than it was a serious business,” he said. “Marianne and I love the arts, but we have no talent. We’ve directed all of our efforts to buying and selling merchandise. Other stores may have been less successful because they were driven more by a desire to create art.”
In 2006 they bought the name rights and assets of Coldsnow, and expanded to a second location with nearly 5,000 square feet of retail space. Today, they employ 19 people.
Everyone who works there benefits from growth.
You can stock as many materials for creating art as you want, but it’s all for naught if your staff doesn’t sell it. That’s why for the past 10 years, the McKeans have provided their employees with a generous incentive program based on sales. One store can be up and the other store down, but if the numbers taken as a whole show growth, everyone gets a reward.
“In January, business was up 22.1 percent,” Bill explained. “All of our managers’ base salaries were increased by 22.1 percent the following month, and every timecard employee received a check retroactive for $2.21 for each hour they worked in January.”
It’s not only effective for sales. Bill pointed out that it helps them get and keep good employees who work together as a team. “They may not love or even like each other, but they all work together to sell more product and make our customers happy,” Bill said. “We believe they earn 30 to 40 percent more than employees of similar stores. The result is quality – 90 percent of our full-time staff are college graduates and all of our part-timers are art students. Our five full-time framers all have art degrees. Our full-time hourly employees have been with the company for an average of 15 years.
“I also believe in letting employees do their own thing, whether it’s merchandising, buying, selling, production or hiring,” he added. “They’ll make mistakes, just as I do, but they’ll learn how to become problem solvers.”
They hired outside expertise when they needed it.
With the acquisition of Coldsnow and everything that came with it – the name change, the new location, the diversity of the products – Bill hired a public relations consultant to help him get the word out. “The company charged us $500 per month under a 12-month contract and it was the best $6,000 I ever spent!” he told us. “They got us on a local talk-radio program where we discussed for a solid hour our two locations, employee expertise and our products. Creative Coldsnow was featured on ABC TV’s local Action News six to 10 times that year. Dozens of articles about us appeared in local newspapers and business publications.
“We still use the things they taught us,” said Bill. “We continue to e-mail promotions to targeted customers. We produce a sales flier every six weeks, and a four- to eight-page color flier three or four times a year.”
They joined the iAMart buying group.
Between the time they became members three or four years ago, to the time they purchased Coldsnow, their business nearly doubled.
“The added buying power helped make us the most competitive art materials store in our market,” said Bill. “We’re able to buy products at 20 to 25 percent less than we were paying before. Our employees love it. They can compare the store before we became members to the store after we became members and see the advantage it’s given us.”
iAMart is a volume purchasing group with nearly 40 members who pay annual dues of $1,000. Each member store does its own buying and receives annual rebates and/or discounts from participating manufacturers and distributors. Approximately 30 manufacturers have agreements with the group, and members select a primary distributor. Creative Coldsnow carries products from 250 suppliers, said Bill, but 50 to 60 percent of its stock comes through iAMart participating companies.
“I have yet to find a store that offers the range of oil paints, acrylics, watercolors and washes that we do,” he said. “We carry five brands of oil pastels! It really sets us apart. Artists will travel a long distance to get to us. They say, ‘I’ve been told about your store and everything I heard was true. Your selection is huge!’”
They’re not afraid of change.
Instead, they embrace it, and encourage other retailers to do the same. “Don’t ever think you’re going to do things the same way you did when you started because the market changes constantly,” said Bill. “Embrace technology and promote, promote, promote.”
They’re fortunate in that a new generation is on board to help them with changes today and plans for tomorrow. As operations manager, son Greg is responsible for the computer systems, leases, vehicles and day-to-day operations. Daughter Michelle is the merchandising manager and in charge of product selection, promotional selection and ordering.
“New product offerings attract new and different consumers,” said Bill. “We feel obligated to offer a good selection because we’re the leading AM store in our market. Unlike the chains that stock only established items and the cream of the line, we’re constantly introducing new products to the art community.”
Supporting those new products will be in-store classes and workshops, something Bill had been reluctant to offer. “Classes?” he said. “For years I said I didn’t want a bunch of noisy women in the back room. I’m about to eat my words because we’re looking into the possibility of holding classes, workshops and other special events at or near our store. I think it’s important for growth.”
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