Tarrant Business

Fort Worth's Import Store has its downtown building under contract

The Import Store, the family-owned Fort Worth retailer in business since 1982, has its 915 W. Belknap St. downtown store under contract to be sold. Matt Kirkham, the owner and son of company founder Dan Kirkham, says he hopes to close the deal by the end of summer.

The deal would include the 20,000-square-foot site, and 10,000-square-foot building, which the company built 10 years ago and is its lone location.

"This contract is a really strong contract," Kirkham said.

He declined to identify the prospective buyer or its business. Kirkham has been pitching the site to office and restaurant users.

The family put the site up for sale last summer at an asking price of $1.7 million, and Kirkham said the sale contract is for $1.3 million. He said last summer he was willing to listen to lease offers for part of the building or all of it, with an eye toward moving his retail store to a smaller space and focusing on "greatest hits."

What’s next for The Import Store assuming the deal closes?

"I would guess we are done as a traditional retailer this summer," he said.

It’s, of course, more complicated than that for Kirkham, a discounter who likes to throw promotions such as "500 Purses for $5."

In the last several months, he’s converted fragrance lamps and accessories – at about $300,000 average annual sales, 30 percent of his store’s $1 million gross – to a multi-level marketing business called i Scent U, soliciting sales consultants and becoming one himself. He says he’s signed up 160 consultants, who receive about 25 percent of their sales, and he’s offered up the program as a fundraising opportunity for small nonprofits.

Kirkham has been pushing a buy-local program, allowing 20 local craftspeople to sell their wares at the front of his store and taking 10 percent of sales. "In the real world, they’d need to cough up 30 to 50 percent," he said. One thought he’s had: buying or leasing a local building that would host small craftsmen.

Kirkham, who also hosts food trucks on the store’s parking lot, views his business model going forward as "share the profit."

The fragrance lamp "was the hottest item I’ve ever had," he said. "I’ve done $4 million on it. The next $4 million, I’m going to be sharing the profit."

- Scott Nishimura

Best Buy closing 50 big boxes, opening Mobile stores, refocusing resources

Best Buy CEO Brian Dunn says he’s not satisfied with the pace of change at his company, “especially considering the opportunities we have in the marketplace.”

So the company announced Thursday that it will close 50 Best Buy big box stores that “don’t meet our investment criteria” this year, open 100 Best Buy Mobile boutiques, and run a test in the Twin Cities and San Antonio in remodeling big box stores to Connected Stores. The Connected Stores will focus resources on computing and mobile solutions, in hardware, service and accessories, Dunn said. The stores will feature a “Central Knowledge Desk” in the center to help customers with services and instructions, and offer training and classes, he said.

Best Buy isn’t commenting further on which stores it’s closing, and where it’s opening the mobile stores, said Kelly Groehler, a spokesperson.

“We are working to ensure the impact to our employees will be as minimal as possible, while serving all customers in a convenient and satisfying way,” Groehler said. “We will announce details about specific store locations and timing for closings once they are finalized.”

- Scott Nishimura

Councilman Joel Burns says he can't support Walmart zoning case on Fort Worth store

Negotiations between Walmart and key neighborhood organizations in South Fort Worth’s Hemphill Heights area have stalled over plans for a grocery store, with Walmart unwilling to set aside the portion of the site fronting Berry Street for future development.

City Councilman Joel Burns, who represents the district the site is in, told the Star-Telegram in an interview Friday that he couldn’t support Walmart’s zoning petition for several variances on the site at the southwest corner of Hemphill and Berry streets.

"I cannot support the current proposal," Burns said.

The council is scheduled to vote Tuesday on the case. The Fort Worth Zoning Commission in early February voted to recommend rejection of Walmart’s petition. A week later, the council delayed a vote and directed the two sides to reconvene in search of a compromise. Burns said Friday he would not seek another delay.

Under City Council protocol, members typically defer to the wishes of the council member where the zoning case is located, but there have been exceptions. It would take a majority of the council to approve the variances.

Walmart, which has the site under contract from Travis Avenue Baptist Church, would raze a church fellowship hall and build a Neighborhood Market. Walmart is seeking four waivers from mixed-use zoning, including the right to put a parking lot in front of the building rather than the back, and an exception to the minimum 20-foot setback rule.

Neighborhood representatives say Walmart’s site plan doesn’t fit the city’s Hemphill/Berry Urban Village plan, which calls for buildings that hug street fronts and sport lots of windows that highlight activity inside and draw pedestrians in. Walmart says it can’t run its building up to Berry Street, because a small strip shopping center immediately at the Hemphill-Berry corner is in the way and not for sale. The company says it will rehab the current church building if it doesn’t win its waiver request.

In a private Feb. 21 meeting with Burns and Walmart representatives, reps from the Hemphill Corridor Task Force, Berry Street Initiative, and South Hemphill Heights Neighborhood Association asked Walmart to set aside the Berry Street parking frontage, replat it for future development, let the church retain ownership, push Walmart's signs deeper into the property, and carve out the Berry Street driveway as an easement, the neighborhood representatives said Friday.

The groups had already pressed those ideas in conversations with Walmart, arguing Berry Street-front parking and signage "go to the perception the property is not available," said Sandra Dennehy, chairman of the Berry Street Initiative.

Walmart representatives proposed to lease the land instead of replat it, avoiding environmental studies; set aside half the area the neighborhood groups wanted; retain ownership of the driveway; and install its Berry Street sign closer to the street than the groups wanted, the neighborhood representatives said.

Neighborhood representatives pressed Walmart to lease the full site back to Travis Avenue at a cheap, long-term price. Walmart representatives said they’d relay the neighborhood group’s proposals to corporate officials.

Late this week, the groups noted, Walmart sent out fliers to the neighborhoods, encouraging residents to show up at Tuesday’s 7 p.m. council meeting and voice support for the store.

Sandra Dennehy, chairman of the Berry Street Initiatve, and Fernando Florez, chair of the Hemphill Corridor Task Force, said the groups were looking for a mechanism that encourages future development of the Berry Street frontage in line with the urban village concept.

"We needed safeguards," Dennehy said. "They didn’t offer anything, any safeguard, any mechanism that would encourage future development."

Kellie Duhr, a spokesman for Walmart, said the company determined it couldn’t surrender the parking the neighborhoods wanted.

The one-third-acre Berry Street frontage included 35 parking spaces and represented 22 percent of Walmart’s total planned parking, Duhr said. Walmart conveyed that answer to Burns on Thursday, she said.

"After much debate, it was determined that parting with additional spaces would compromise our ability to offer sufficient parking for our customers," Duhr said.

Burns said he was "disappointed that Walmart was willing to walk away over 20 parking spaces."

Dennehy, an architect., said Walmart could have come up with a streetfront design for its building that didn’t require zoning variances, has done such special designs in other cases, but refused to do so in this one. She’s also worried Walmart will buy the small strip at the street corner, tear it down, and put up a gas station, which the neighborhood groups argue would deep-six the urban village. Walmart says it doesn’t have that site under control.

The neighborhood groups accused Walmart of "David vs. Goliath" tactics in sending out fliers.

"We distributed a flier the afternoon of the initial vote on Feb. 14 and subsequently sent a mailer to nearby residents, both of which were intended to communicate the two options and also allow input from the entire community, including our many supporters of the new store," Duhr said.

Numerous supporters of Walmart’s zoning case have spoken up at neighborhood meetings, and the zoning and council meetings, including the heads of other neighborhood organizations in the area.

The Hemphill task force, Berry Street Initiative, and South Hemphill association asserted they supported a Walmart store, but one that fit the urban village. If the council approves the variances, they would be the first in the Hemphill area since the city adopted the urban village plan several years ago.

Burns said he is maintaining "a glimmer of hope" that Walmart will change its position before Tuesday’s meeting.

- Scott Nishimura and Bill Hanna

Container Store readies move back to Arlington

Even companies like The Container Store can make mistakes, the company’s CEO says.

The company’s making up for one Saturday, when it opens a new 25,000-square-foot store in South Arlington’s Highlands shopping center, more than 10 years after leaving the city to open up in Southlake.

“We were divided internally,” Kip Tindell, the chief executive and one of The Container Store’s founders 33 years ago, said in an interview Thursday at the company’s Coppell headquarters, where The Container Store was hosting the new Arlington employees.

Some of The Container Store’s people felt customers of the old Arlington store, in the Lincoln Square Shopping Center at Interstate 30 and Collins Street, would follow the company to Southlake, Tindell said.

“They did not follow us to Southlake,” said Tindell, estimating the company has been scouting locations for a new Arlington site for about five years. “Southlake is not Arlington.”

Arlington fans are already treating the new store, set to open with a two-day benefit for the Junior League of Arlington, like customers in completely new markets, Tindell said.

The Arlington store, in a 25,000-square-foot store that Borders Books surrendered in bankruptcy,  is one of several new stores the company plans this year.

Tindell also elaborated on the company’s plans for a new store in a former Borders space in the Central Market-anchored Chapel Hill Shopping Center at Interstate 30 and Hulen Street, which the company confirmed last fall it leased for a 2013 opening.

The company plans to move from its 15,000-square-foot space in front of Hulen Mall at I-20 and South Hulen to the new space, giving the company a draw on both east-west interstates, Tindell said.

“The Fort Worth store is great,” Tindell said. “But it’s the oldest, smallest one in the chain.”

Tindell said The Container Store is doing well after seeing sales dip a total 13 percent during recession in 2008 and 2009.

But in 2010 and last year, sales in comparable stores, those open at least a year, rose about 7 percent in  each year, he said. Total sales, including ones from new stores, are now growing at 12-14 percent a year, he said.

In 2012, the company expects to surpass $700 million in sales, he said.

“If we didn’t have the Great Recession, we probably would be past $1 billion rignt now,” Tindell said.

The company, which has more than 50 stores, expects to open another 25-30 stores over the next four or five years, and currently is funding its new store growth from free cash flow, Tindell said.

“We haven’t touched our revolver in two years,” he said.

Growth over the next five years may bring the company close to capacity at its Coppell distribution center, attached to its headquarters. Tindell said the company is considering its options, and doesn’t like the idea of moving the distribution center or building a second one.

“It’s really good to have all your vice presidents with your distribution and your buyers,” he said.

The privately held company, which entered into a partnership with the Leonard Green & Partners private equity firm in 2007, is also prepared to re-examine its options if Leonard Green decides to cash out at some point, Tindell said.

Possibilities include another equity deal,  initial public offering, or sale to another company, Tindell said. More than 200 Container Store employees now own stock in the company, Tindell said.

Tindell spent much of the morning imbueing the company’s newest employees with its “foundation principles” and the concept of “conscious capitalism,” in which all stakeholders in a company can win by looking out for each other’s interests.

That includes ensuring employees are well paid (average annual salary for a fulltime retail salesperson is $50,000, Tindell said), and the company has strong relationships with its vendors (The Container Store likes to find out the low periods for its manufacturers, and then plop big orders on them, Tindell said).

Tindell also unashamedly preaches active selling in the stores.

“If you’ve got a woman in the store with a tie rack in one hand, and a shoe rack in the other, she’s clearly got a closet that needs help,” he says. “You’re not doing her a favor if she leaves the store with just those two” items.

- Scott Nishimura 

New place to sell, trade, music gear: Music Go Round opens in Fort Worth

Musicians have another place to buy, sell, and trade their gear.

Two Fort Worth partners have opened the first Tarrant County franchise of Music Go Round, a Minnesota chain that specializes in used equipment, at 6006 Southwest Boulevard off of Bryant Irvin Road in southwest Fort Worth.

David Boswell, 43, an ex corporate auditor who plays banjo, guitar, and fiddle in a blue grass band, and Roger Smith, 45, owner of a Fort Worth advertising specialty company whose two sons are avid musicians, say they saw a market opening from thier own experiences.

"This is the way I’d like to buy gear," Smith said. "I’ve paid retail for a guitar for my son. Now I don’t have to do that again."

Their 3,000-square-foot store opened Feb. 16. Boswell and Smith see substantial markets in adult men and in schools and students.

Using the model provided by the franchisor, they say they’re buying for 40-60 percent of what they can expect to sell them for.

The competition: online sites such as eBay, Craiglist, and the popular sweetwater.com gear retailer, independent stores, rental programs, and some major stores such as Guitar Center, which, while focusing sales of new products, also buys and sells used equipment.

"An individual selling a guitar on Craigslist will make more money on Craiglist than if selling to us," Boswell said. "But the advantage (of selling to Music Go Round) is it’s a done deal."

And purchasing online means you can’t test out the goods first, Smith said.

The U.S. used gear market is large. Brian Majeski, editor of The Music Trades, a New York trade publication, estimates it about 10 or 15 percent of new sales or about $1 billion annually.

"So much of it takes place person to person, so it’s really tough to track," he said. "If you go product by product, it’s quite substantial."

A strong share of school-rented equipment "has been in somebody else’s hands," he said. And "the used piano market is way bigger than the new piano market."

Music Go Round says its stores purchased 38,400 units last year, and sold 34,700, for $20 million in sales.

Boswell and Smith said they’d studied the idea for two years before piling in. Boswell is a father of twin 13-year-olds and his wife is an Everman school teacher. Smith has three children ages 4 to 16, and his wife is a stay-at-home mom.

The two paid a $25,000 franchise fee for their store, and also had to demonstrate a minimum $325,000 in capitalization. They financed part of their startup costs from a banker-musician at Community Bank.

They envision opening a second store in five years or so, likely in Northeast Tarrant County, once their startup debt is gone.

"We’ll have the Fort Worth market pretty well covered with two stores," Smith said.

- Scott Nishimura

New technology awaits Walmart customers at Crowley Supercenter

Walmart’s new Crowley Supercenter store, set to open March 14 at 1221 FM 1187, sports the company’s newest technology.

Interior ceiling lighting is connected to sensors that detect when more than enough sunlight is coming into the building through skylights., and the system turns off some of the ceiling lights to save energy, Craig Ducas, one of the store’s managers, in showing off the building Monday.

The refrigeration cases include efficient LED lights, and the lawn and garden center comes with two gigantic ceiling fans that help push air around.

Walmart is also preparing a rollout of an upgrade to its smartphone app that will allow customers to punch in a desired item, and let the app direct them to the aisle location in the store.

“We understand (consumers’) time is valuable,” Ducas said. “They don’t have the time to rush around to every store.”

The 165,000-square-foot store, west of Interstate 35, will open with about 350 employees, and currently has about 335 on board, Ducas said.

Walmart expects the store to draw from its immediate area, south to Burleson, and as far west as parts of Benbrook and southwest Fort Worth, Ducas said.

- Scott Nishimura

Dillard's shares up again Friday

Dillard's shares rose another $1.03 to $58.86 on the New York Stock Exchange Friday, a day after the company released holiday-quarter profits that easily beat Wall Street estimates.

Credit Suisse has a new $59 price target on the shares.

Updated: 4:32 p.m.:

Here’s what CS analyst Michael Exstein said Thursday in an updated research note:

“Throughout the 4Q11 reporting season, we have seen retailers that are heavily exposed to the (fashion/accessories/beauty) categories deliver impressive results, and DDS is no exception...Retailers with access to the FAB categories have consistently outperformed their peers that don’t, and we see no signs that this trend is changing. Shoes and accessories alone make up 30 percent of DDS business, and we have no doubt that this helped to drive the company’s 3 percent increase in same store sales and further expansion of its operating margin...Now that the retail gross margin appears to have stabilized..., further expansion of the operating margin will likely need to result from continued top line improvement.”

On sales, CS noted, “same store sales increased 3 percent, representing the sixth straight quarter of positive comps. A six-quarter winning streak is something the company hasn’t accomplished since the 1990s, and further cements the company’s turnaround.”

CS increased its fiscal 2012 earnings-per-share estimate to $5.50 from $4.88, to include an extra week, lower rental costs, and lower average share count. In 2012, CS said it expects 1.6 percent same-store sales growth. CS raised its share price target from $50.

- Scott Nishimura

J.C. Penney loses $87 million in fourth quarter

Penney cited special restructuring and management transition charges.

- Scott Nishimura

Sears spinning off Hometown, Outlet stores, some hardware shops

Sears said Thursday it's spinning off a piece of its business in an offering expected to raise up to $500 million. Sears Outlet has stores in Arlington and Grapevine, and Sears Hometown has one in Burleson.

- Scott Nishimura

Dillard's beats Wall Street forecasts, shares rocket up

Dillard’s shares shot up Thursday, after the company handily beat earnings forecasts.

Dillard’s said it posted a record profit for the fourth quarter, as sales rose and the company kept a lid on expenses.

Net profit was $141.5 million, or $2.77 per share of common stock, compared to a $109.6 million net profit, or $1.75 per share, for the same period the prior year. Sales in comparable stores – those open at least a year – rose 3 percent.

The most recent quarter’s results included a one-time $28.7 million after-tax credit related to settlement of a lawsuiit. Without that credit, the company would have recorded a $112.8 million net profit, or $2.21 per share, it said. Wall Street consensus estimates were $2.02 per share, according to Bloomberg News.

Gross margin – the difference between sales and cost of sales, as a percentage of revenue – remained even at about 34 percent. Sales, general and administrative expenses fell in total and as a percentage of sales.

For the new year, CEO William Dillard said “we will remain focused on creating a clearly distinctive shopping experience.”

The company said it “will no longer report monthly sales results,” and report only quarterly figures. “Management believes that providing sales information quarterly with operating results provides a more complete representation of the company’s performance,” it said.

Dillard's shares rose $5.63 to $57.83 on the New York Stock Exchange.

- Scott Nishimura