The Right Balance

The Right Balance

retail/entrepreneurs by Mark Gordon | Managing Editor

Doubling the size of a retail operation during an economic downturn takes a few essentials. Capital, for one. Experience helps, too. The biggest factor? Guts.

When the corporate bigwigs at New Balance decided five years ago it was way past time to update the look of its retail stores, they didn't mess around. They hired several firms to work together on a new concept, spending into the six figures to find a store that could combine wow with simplicity.

And after dozens of tweaks, the Boston-based parent company settled on its concept late last year, which included better lighting, crisper colors and more technology.

The company then had to find a location and an established storeowner to try out the concept for real. That proved to be a far easier task: It chose David and Molly Jackson, the husband-and-wife team that had already been running one New Balance store, in Sarasota, since 2002.

The Jacksons are a perfect slip-on fit for the new store. The couple's first store, near Palmer Ranch in mid-Sarasota County, has consistently been one of the top performers in New Balance's 150-plus network of stores nationwide. The store is hovering around the $2 million mark in annual sales, a figure that has grown at double-digit percentage rates for four out the past five years. That's good enough to be the number one New Balance store in Florida and the Southeast, and number eight in the country.

What's more, the Jacksons have become the company's shoe gurus: Molly Jackson has been on the New Balance corporate advisory board since 2006, when she became the first woman invited to join the panel. She has assisted the company and individual storeowners with marketing efforts, focusing on a grassroots sponsorship program she refined in Sarasota. David Jackson, meanwhile, is a member of the company's product board, advising the company on new sneakers and improvements to older models.

"They are true innovators within the New Balance company," says Ed Ogiba, a Sarasota-based marketing and business consultant who has worked with the Jacksons.

Still, opening a sneaker store during a broad economic downturn that has knocked around both big and small Gulf Coast retailers is a risky move, especially for a pair of admitted conservative entrepreneurs. Molly Jackson even worked in banking before going into the sneaker business.

The Jacksons declined to elaborate on how much they are spending to open the new store, some of which is covered by the corporate parent. But they don't deny there is a lot riding on the new store.

"We are in a tough market and a tough environment right now," says David Jackson. "But we feel like this is an opportunity for us to shine."

The Jacksons base that opinion not just on the other store's success, but in their steadfast belief that top-level customer service will always be in demand, whatever economic forces are at play.

The new store opened in late May in eastern Manatee County, a mile from the University Parkway exit of Interstate 75. "You can buy New Balance from a lot of different places," says Molly Jackson. "But you can't buy any from a place that has the experts we do."

Shoe University

That expertise stems partially from Shoe U., a six-week long training program David Jackson created that combines elements of the company's training guide with some specific customer-service primers. For example, all new employees go through training about different foot and ankle problems, such as bunions or plantar warts, and how to ask the right questions when working with a prospective customer.

Training like that is important, David Jackson says, because the stores sell several unique sizes when it comes to sneakers, in length and width. The goal is for the employee to look at a customer's foot and immediately know what kind of shoe might fit.

But the Jacksons realized soon after opening their first store that while the customer experience is important, it won't go far without a matching marketing and branding plan. For a small business competing against the likes of national giants such as Dick's Sporting Goods and the Sports Authority, that could have been an even tougher challenge.

Molly Jackson took charge of the marketing side of the business. She had experience in that area as a rising executive in marketing with First Union bank (now Wachovia) and currently as a full-time business consultant for Vera Bradley, a national woman's handbag and luggage retailer. Jackson also co-owns the Snappy Turtle Trading Co., a maternity and children's consignment store in Sarasota, with her mother and three sisters.

Jackson's mission was to get the New Balance name out in the community early and often when it came to athletic races, youth teams and charity events. The outreach program has supported more than 100 charities, at a cost of more than $100,000.

It was worth the investment. "It was never our intention for this to be a way to generate business," Molly Jackson says. "But it really has been a good way to spread what we do in the marketplace."

What's more, Molly Jackson's efforts in grassroots marketing have been recognized by the National Shoe Retailers Association, which elected her to their board last year.

A third component to the store's success - and what the Jacksons hope will be the core of the second store's success - is employee retention. Between both stores, there are about 15 employees. Retention is an ongoing priority because of the costly and time-consuming training they undergo.

In an aggressive effort to stay on top that issue, the Jacksons have taken the unorthodox step of offering health care and a retirement package to the staff - nearly unheard of in mom-and-pop retail. In 2006, the Jacksons introduced a health-care coverage plan for their employees through a program with the Sarasota Memorial Hospital. And last year, they kicked off an IRA retirement plan for which they offer a 3% matching contribution.

'A great market'

The Jacksons' put-it-all-out-there approach when it comes to training, marketing and employee retention belies their careful approach to business. Indeed, before opening the store in Sarasota six years ago, the Jacksons looked at the company prospectus and other materials and thought the profit margins were too good to be true. They almost didn't bite.

At the time, there were only about 25 exclusive New Balance stores in the country, so the Jacksons hit the road. They flew and drove around the country, visiting stores and interviewing the owners to find out about ups and downs and unforeseen troubles. David Jackson had been a New Balance sales rep for almost 10 years and he spoke with many of his wholesale contacts to get a better understanding of the opportunity.

The Jacksons ultimately made the decision to open the store, to go from a two-paycheck family to double-entrepreneurs while Molly Jackson was pregnant with the couple's third child.

"I knew Sarasota was a great market," says David Jackson, "because no one carried the products with the depth we could provide."

The store isn't a franchise operation. Instead, the Jacksons, like other New Balance storeowners, sign a licensing agreement with the company to only sell New Balance sneakers, shoes and apparel. The storeowners buy the products directly from New Balance and don't have to return a percentage of profits to the parent company.

Despite the research and patient-yet-confident attitude, the Jacksons still felt a little over the head at first. "We didn't know what we didn't know," says Molly Jackson.

REVIEW SUMMARY

Business. New Balance, Sarasota, Bradenton

Industry. Retail, athletic apparel

Key. The husband-wife storeowners run one of the top New Balance stores in the country. They recently opened a second store.