Former Aaron Bros. president has tough row to hoe at Frank's - Bruce Dale tasked with the job of turning around Frank's Nursery & Crafts

DSN Retailing Today, April 7, 2003 by Debbie Howell

TROY, MICH.--The task of turning around Frank's Nursery & Crafts is in the hands of Bruce Dale, a craft retailing veteran who guided the revival of art supply and framing chain Aaron Brothers, a division of Michaels Stores.

Dale was recruited following the resignation last fall of former ceo Steve Fishman. A 10-year veteran at Michaels Stores, Dale served the bulk of his tenure as president of Aaron Brothers, which the company bought in 1995.

Though he will miss Michaels, Dale said he was looking forward to the challenge of reviving the ailing Frank's, which exited bankruptcy last May but continues to lose money and suffer negative comparable-store sales. A five-year trend of declining sales drove the chain bankrupt in early 2001.

In its first quarter as a reorganized company, Frank's reported revenue growth, but the next quarter ended in November saw a return to the negative trend, with overall sales from 170 stores down 4% and camps declining 8.4%. Results from the fourth quarter were not available at press time.

Under Fishman, the company rolled out a new format combining lawn and garden with home decor. As part of the initiative, Frank's exited the crafts business.

"The problem is they exited a business before they really developed and knew for sure that they had a replacement," Dale told DSN Retailing Today. "The key to a business is to be able to have an offering out there that is better than anybody else. When you can figure that out, you've got something."

Dale, whose job starts next week, said it was too early to spell out a solution for Frank's, though he did not expect to take long in developing a game plan. His first task will be to analyze every part of the business and its customers, then determine how to build on Frank's strengths, which include its lawn and garden and Christmas decorating businesses. He did not rule out the possibility of bringing crafts back, but added it was unlikely.

"I've got to believe we can very quickly figure the thing out and get it turning in the right direction," Dale said. "They've got a very strong core business in garden and that business continues to have growth."

Though the economy may prove tough for a Frank's turnaround, Dale remains optimistic. After all, he has faced such battles before. Aaron Brothers was in rough shape when Michaels bought the nearly bankrupt chain.

"It had not made money for years and was on the brink of Chapter 11. We bought it at a fire sale. What I look at today at Frank's is almost a mirror image of what I experienced eight years ago. That doesn't frighten me," he said.

In a few months after Aaron Brothers was purchased by Michaels, two prototypes were developed that focused on upscale custom-and ready-made frames and art supplies. A rollout began after a year of study. Within that first year, Aaron Brothers became profitable. The division has tripled in size since the Michaels purchase and has continued to grow sales and profits while expanding into new markets.

Though garden centers are a different animal from frame shops, Dale said he was confident Frank's could find and refine a niche to generate year-round sales. Part of the retailer's problem has been maintaining sales during off-peak gardening seasons and insulation from poor sales due to inclement weather.

As for the difficulties competing against the garden centers of Lowe's, The Home Depot and Wal-Mart, Dale said the key is to offer a different or superior assortments that drive customers to Frank's for gardening supplies.

"It won't be without pain and a lot of hard work," Dale said of Frank's revival. "I'm up to the task and I understand the risks."