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Smith & Hawken Digs In

With a long-standing catalog business and 29 retail locations, Smith & Hawken is firmly planted in the minds of consumers. And it is the upscale specialty retailer's strong brand recognition that will fertilize the company's growth.

"Smith & Hawken celebrates earth, garden and home," says Kathy Tierney, president and chief executive officer of the Mill Valley, Calif.-based chain. "The company was founded for gardeners, and we strive to remain true to this core customer, even though we've expanded to include a lot of merchandise that can be sold and used around the home."

The company, which splits its business in half between catalog and retail store sales, offers a wide range of gardening products, outdoor furnishings and gardener's apparel. "It's a very eclectic mix, but the overall feeling of the store is one that is very sensual. ... It kind of peels off layers of stress," Tierney says.

Smith & Hawken also understands the importance of helping customers, whether they are beginning gardeners or experts. Gardening classes and demonstrations by craftsmen are part of a year-round event schedule that is done on both a national and regional basis. In addition, the company works with New York-based Workman Publishing to identify garden-related book topics, hire authors and help with editorial content.

Founded in 1979, the concept began when John Jeavons, a dedicated organic gardener, asked his friends, Dave Smith and Paul Hawken, if they could import from England the hand-forged gardening tools essential for double-digging yet unavailable in the United States. The two ran the company until the mid-1980s when Smith left; Hawken continued operating the business until he left in 1991.

In 1993, Smith & Hawken was sold to CML Group, a Boston-based public company that also owns NordicTrak. Since then, the concept has been further developed, merchandise offerings have increased, and the chain has grown from three to 29 stores with plans to more than triple that number in the next three to four years.

Smith & Hawken plans to open approximately 20 more company-owned locations in its next fiscal year - August 1998 to July 1999, Tierney says. She expects that 25 stores will be opened in fiscal year 1999/2000 with a total of 100 to 120 operating by the year 2001 to 2002.

The company, which has stores in nearly every region of the country, will focus on regional development as well as in-fill opportunities in larger markets, Tierney says. Smith & Hawken has unique site-selection requirements since its stores average 4,000 sq. ft. to 4,500 sq. ft. and require outdoor space.

When considering a freestanding building, Tierney says, the company looks for the uniqueness of the location. For example, the original store and nursery in Mill Valley, Calif., were created where a gas station once stood; the Chicago location began life as a pump house; and a former cotton mill was reborn as the Baltimore store. Smith & Hawken strives to preserve the character of these types of buildings by doing as little as possible to turn them into a retail store, she says.

In addition to freestanding stores, the company is interested in street locations with like-minded, specialty retailers as well as shopping center locations in what Tierney calls "suburban villages." She describes these types of centers as smaller, destination-type developments anchored by a bookstore and featuring several other hard-goods retailers and restaurants.

When considering either of these types of sites, the company needs access to natural light and outdoor patio-type options. "We love to be a stand-alone," Tierney says, but end caps always work well, as do adjacencies with bookstores, which cater to similar customers.

Smith & Hawken does not subscribe to a cookie-cutter approach to store design. "We believe that gardening is a very regional business, and we want to be a part of the community we are in," Tierney says. "The merchandise unites the stores, and there's a shared commitment to all the things the company believes in, but the actual buildings and architecture are quite unique. The stores we design respect both who we are as a company and also the kind of developments we consider."

Rejuvenated following a restructuring program that began approximately five years ago, The Children's Place continues its aggressive growth strategy with the goal of becoming an 800-store national chain in six to seven years. Currently, there are 180 stores located primarily on the East Coast and in the Midwest.

The company, which designs, manufactures and sells its own private-label merchandise, is a specialty retailer of children's apparel and accessories, newborn to age 12.

Founded in 1969 and restructured in the early 1990s, The Children's Place of today began with the closing of some existing stores, the creation of a new prototype and the remodeling of other units between 1992 and 1996. "In terms of history, our regard to The Children's Place and its current concept is roughly five years old," says Stanley Silver, president and chief operating officer of the West Caldwell, N.J.-based chain, which went public in September 1997.

The stores, which average 3,800 sq. ft. in size, feature a design that incorporates light maple wood floors, fixtures and trim set against a white color scheme, accented by a hunter green that is used in the company's logo. The store is brightly lit and features a floor-to-ceiling glass storefront to attract customers.

With its new store prototype, the company began expanding its presence in the second half of 1996. It added 18 stores in 1996 and 47 in 1997, and plans to open 54 more this year and more than 60 next year, Silver says. The expansion, which does not involve franchising, will encompass new markets as well as existing markets.

"We go westward into some new markets each year," Silver says, adding that The Children's Place will be looking at Denver next year. Expanding southward also is in the plans with northern Florida being considered. Targeted for late 2000 are what Silver calls "Southern climates," areas of the country that stretch from Florida to Southern California.

In addition to these new markets, The Children's Place will establish groups of stores in areas near existing units. "Store clustering helps grow the brand and supplies name recognition to the customer," Silver says.

The company's expansion strategy focuses primarily on mall-based locations, although factory outlet centers, urban downtown locations and specialty strip centers also are considered. "Over 80 percent of our stores are in regional malls," Silver says, adding that The Children's Place prefers to position itself in a children's wing next to complementary tenants and direct competition.

Silver distinguishes The Children's Place from such competitors as GapKids and Gymboree by saying that GapKids highlights more basic-type apparel and Gymboree focuses primarily on children up to age 6. In addition, while all three have equivalent-quality apparel, The Children's Place has lower price points.

The company looks for at least 250,000 people in a trade area, generally major cities and their suburbs as well as some secondary and tertiary markets.

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