EmailEmail
PrintPrint
Low-cost school shops where pupils buy holiday gifts fuel an industry
Sunday, November 04, 2007

Kelly Jadach is a buyer for a store that opens only three days a year, but the clientele is choosy. What do they want? "Anything that has Mom or Dad on it."

Ms. Jadach, a member of the parent-teacher organization at a 500-pupil elementary in Medina, Ohio, turned up at wholesaler Akron Novelty & Merchandise Co. a couple of weeks ago. There she could wander rows of small, inexpensive items ideal for pint-size shoppers stretching small budgets into gifts for family, friends, pets and maybe even a little something for themselves.

Temporary stores at schools -- commonly given names such as Secret Santa Shops, Frosty Shops and Holiday Shoppes -- have been around for decades. It's not a reach to say tens of thousands of parents have received key chains inscribed for Dad or mugs for Mom. The quality of the merchandise may not equal that carried in Saks Fifth Avenue, but then, the prices don't either.

Where does the merchandise all come from? A lot arrives from places such as Akron Novelty in Akron, Ohio; Quality Wholesale Inc.'s KidSmart Holiday Shoppes in Carlisle, Cumberland County; and Kids Go Shopping Inc. in Scranton, all competing for the significant, if somewhat risky, business opportunity offered by seasonal stores usually run by an all-volunteer staff.

The fragmented industry that serves holiday shops is hard to quantify. Even those in the business aren't sure where all of their competition comes from.

Suppliers may be mid-size operations supplying hundreds of school stores or they could be small husband-and-wife teams that fill 50 orders. "There are so many players in it," said Phil Spinelli, chief operating officer of Kids Go Shopping, which has worked with schools in almost 40 states.

PTO volunteers, such as Ms. Jadach, don't limit their sources, either. "I go all over," said the Medina resident as she pushed a shopping cart through the aisles.

Youngsters coming to her store this year also may get to choose from pieces she picked up at off-price chain Gabriel Brothers or Ohio-based discounter Marc's. The day after Christmas, she usually can be found sifting through Kohl's clearance goods.

For businesses that specialize in supplying holiday shops, the rush starts in October because parent organizations all schedule their openings for November and December. After Oct. 15, KidSmart has a policy that customers can't pick and choose their items but must buy from a pre-set choice of packages easier to pack and ship.

At Akron Novelty, even family members who work part time the rest of the year are recruited in October to get orders ready.

Bill Hardgrove estimated 25 percent of his family-owned company's volume comes in the two months of the year dominated by Santa shops. In fact, the shops -- combined with the power of the Internet -- may have saved the wholesale business founded more than 50 years ago to serve small gift shops and drugstores around Akron.

For a long time, half of the company's volume came in orders from drugstores. A catalog from the late 1950s includes Mickey Mouse watches, diamond wedding bands, toys, TV sets, golf clubs, power tools, even a three-speed portable record player.

Then small retailers began disappearing as big box stores and discounters landed nearby. Pharmacies were bought or closed. Orders dried up. Mr. Hardgrove began wondering how much longer the business could survive.

Yet the wholesaler had been supplying Akron-area schools with small merchandise for carnivals and holiday shops for years. A decade ago, the company set up a Web site to bring in business from outside the region.

It didn't go well. "You can be on the Internet and still not do any business," said Mr. Hardgrove.

Five or six years ago, they got advice on how to raise Akron Novelty's profile in search engine results. Now he estimates 20 percent of the business comes through its offline store with 80 percent through online orders from around the country.

In the back room on a recent October day, his son, John Hardgrove, was busy assembling items from an $862 order from a school near Philadelphia.

Two large cardboard boxes on the floor held stacks of tiny Christmas earrings, pens labeled for grandmas, grandpas, moms and dads, as well as dog toys, Dad flashlights, heart-shaped cards and those basketball hoops that can be hooked over the nearest closet door.

There were also screwdriver sets for grandpas and plaques for moms, lots of photo frames and still more things to pull off the shelves.

It's a merchandise mix familiar to those in the business. There's rarely one hot item because the young customers are buying for such a wide range of gift recipients and the price range is limited to the 25 cent to $12 range (often parent groups set their ceiling lower).

But some things never change. "'I love Mom' and 'I love Dad' stuff is always great," said Butch Hinze, co-owner of Quality Wholesale. He predicted the company's holiday shoppes division could supply 600 schools this year in more than 40 states.

The ordering process brings its own special challenges. Sometimes the last person to handle the school holiday shop trained her replacement. Sometimes that didn't happen.

In determining how much to order, grade levels matter as do the number of sale days planned. If a holiday shop will be held on only a Saturday, half of the pupils probably won't make it, said Mr. Spinelli.

Sales tend to be better when an event is held over several days, but as retailers know, finding good holiday help can be tough. "The PTA committee has to be very active during the three- to four-day sale," he said.

Some suppliers promise to take back most of what's not sold. Akron Novelty sets a limit of 20 percent of the total order. "Early on, we got hurt really bad on returns," said Mr. Hardgrove.

Customers have concerns as well. Mr. Hardgrove pointed to a small order being assembled for a school in Warwick, R.I. It barely looked like enough to fill one box.

"They'll test us," he said. That happens a lot. "They might come back a week after they get this and place a $1,000 order."

The fragmented nature of the business and the low cost of the products sold make it pretty easy for entrepreneurs to get into the business. Especially over the Web, customers may find it hard to tell if a supplier will come through and if the pictures on the Internet bear any resemblance to reality.

On the business side, Mr. Hinze noted shipping expenses can be high, in addition to the cost of packing orders and storing merchandise. "A lot of it depends on volume," he said. Snowy weather in the midst of the season can mean a lot of returned merchandise. Often suppliers try to build a year-round clientele by serving other kinds of customers, too.

The product recalls that have pulled millions of toys off shelves of traditional retailers haven't proven a major concern yet, the suppliers said. "The lead concerns came out a couple of years ago for us because of jewelry," said Mr. Hinze. Some people changed vendors when the United States set the bar higher on its standards, he said.

Mr. Hardgrove is counting on his importers to get it right at the front end. "They can't afford to lose a container or two containers or three containers of merchandise to that problem," he said, referring to the truck-size boxes used to ship goods.

Meanwhile, Ms. Jadach was carefully working her way along the aisles trying to find items that would please the children and meet her personal quality standards. She skipped certain areas entirely but knew she'd need to stock up on horse statues and Cleveland Browns playing cards.

"The kids love it," she said. "That's why I do it."

The best part may be helping them shop, she said. One of her priorities is keeping them focused on thinking about the people who will be receiving the presents and what they would enjoy.

She remembered one young boy working his way down his shopping list, carefully choosing gifts. Finally, he just needed something for his grandmother. He saw the perfect thing. "I think she'd really like this football."

Ms. Jadach tried for an interception, thinking this one might go out of bounds. She asked if he was sure. He never wavered. "She loves football."

Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.
First published on November 4, 2007 at 12:00 am