Finding a niche BTween the dollar stores

DSN Retailing Today, August 16, 2004 by Debbie Howell

DALLAS -- A bright orange and lime green color scheme with Hilary Duff music playing set the stage for a new store concept in the Dallas market that merges two hot retail segments--dollar stores and formats catering to tween shoppers.

The first three stores, called BTween $1 and Five, opened last month at malls in the Dallas area. Two more stores will open this fall, also in Dallas-area malls. Should the concept succeed, expansion to a new market could occur in 2005.

Everything in the store is $1, $2, $3, or $4 $5 and includes items such as party supplies, room decor, jewelry, candy, hair care items, hats, socks, footwear, school supplies, toys, novelty items and giftware, all targeting the 7to 14-year-old age group. The concept resembles some elements of Limited Too and Claire's, chains that also target the tween shopper, but with a ceiling on price points.

"Value shopping is not limited by age. We've trained our children to be value-conscious," said James Berk, founder of the new chain that is backed by $4 million from Dallas-based Red River Ventures.

Berk, whose retailing career included heading Biz-Mart, The Wholesale Club, Teach and Play Smart, Auto Parts Club and most recently Store of Knowledge, said the idea for BTween $1 and Five came about afar studying the fast-growing dollar store niche. In addition, the tween market of 29 million is a large demographic group with spending power estimated at $38 billion this year.

While the trend among most large dollar store chains has been to target off-mall, convenient neighborhood locations, Berk said he decided to stick with a mall strategy initially because that's where the teen and preteen crowd hangs out.

"Our approach is unlike the [typical] dollar store in that the store tries to be well-presented, fun, interesting and exciting," Berk said. "It's part of what's earned us a position in upscale malls."

Though open just two weeks at the time he was interviewed, Berk said he was pleased with early shopper response to the store concept. Advertising for the new concept has focused on movie theater preshow screen slides and contests run off of the store's Web site, tween1.com. The company has established an advisory tween council to offer suggestions on trends and merchandising strategies.

A tour of the Galleria Mall store in Dallas last month revealed a very bright, neatly merchandised store with clearly marked prices above each group of items. The 3,500-square-foot space is next to Old Navy, a key draw for the target group. A sampling of the merchandise included backpacks, plush animals and fun frames for $5, "shock clocks" for $4, toe ring sets for $3, Harry Potter craft kits, magnets and flip flops for $2, and a variety of movie theater-style candy rounding out the bottom of the pricing paradigm at $1.

Berk said some of the strongest sellers thus far have been lanyards with printed messages, hot pink fuzzy "maribu" frames, a siren-like "shock clock" and university-branded logo visors.

Lacking the buying power of the large dollar chains such as Dollar Tree and Dollar General, Berk admitted it has been a challenge as a startup retailer to find merchandise to sell that's trendy and still can be sold at the low price points sought. Btween $1 and Five has pursued both closeouts and imports to improve its profit margins and is constantly on the lookout for new vendors, he added.

A variety of tween-targeted stores have cropped up in recent years: Justice, from the company that runs Limited Too, opened earlier this year, and 39-store Club Libby Lu, a chain owned by Saks Inc.