Hobby Center Toys plays specialty game with twin concepts

Discount Store News, August 10, 1987 by Josephine Fiamingo

Hobby Center Toys Plays Specialty Game with Twin Concepts

Rather than compete head on with larger toy supermarkets such as Toys "R' Us and Child World, Hobby Center Toys, a chain of specialty toy stores based here, has carved out its own special niche with two separate concepts:

One, called Hobby Center Toys, incorporates both high-priced, collectable merchandise with discount oriented promotional fare and averages between 2,000 square feet and 3,000 square feet.

The other, The Toy Store, is more upscale with selective products aimed for the higher income customer in upscale market areas next to retailers such as Benetton and Polo.

Located in the midst of acres of family-owned farmland and almost hidden by high stalks of corn, the offices and warehouse are the heart of the 27-store operation.

Russell Benore, founder, was a farmer for most of the year. But in the winter, he would escape to his basement to build model railroad trains.

It was in his basement where the idea of a hobby shop was born. When Russell and his wife, Mary Beth, offered for sale model railroad parts left over from his hobby, they found a number of hobbyists in the Toledo area.

Thus, the first store opened in 1947 in downtown Toledo strictly as a hobby shop called Hobby Center. The chain has grown from that first unit doing less than $30,000 in sales that year to its current 27 stores and $12 million in sales. The stores are mainly concentrated in Ohio with three stores in Michigan and one store in Indiana.

Eventually, promotional toys were added to the mix and the name of the store was changed to Hobby Center Toys in 1976.

Hobbies still account for 30 percent of the chain's total business while crafts and miniatures account for 10 percent. The other 60 percent is generated by toys and is equally distributed between promotional toys and the higher quality imported merchandise.

The idea of adding toys to the mix came about in 1959, originally to promote party plan merchandising. The Benores started the Fun Fair wholesale company to buy the toys for the party plan since it was not easy to buy direct at that time, said Benjamin Savino, vice president of the chain. Buyers continue to deal direct with toy factories through its buying division, Fun Fair.

Toy Competition

Increasing competition on promotional toys from the large toy supermarkets stirred the company in 1979 to launch a more upscale version of its toy stores, called The Toy Store. The chain currently operates five locations under that name and these stores are smaller than the average size of Hobby Center Toys.

The company is trying to keep the identity of the Toy Store separate from Hobby Center Toys by having the product mix and locations setting the image, Savino said.

The chain just opened a new The Toy Store in Kettering, Ohio, on July 10 and a Hobby Center Toys in Mansfield. "By next fall when the dust settles, we expect to have an increase in sales from the new stores,' Savino said. It has remained at around $12 million in sales over the past two years.

"We have become more and more of a specialty retailer,' Savino said. "The country has become segmented with the Wal-Marts taking over the lower-end of the scale and the specialists taking over the higher-end of the scale with the middle being eliminated.'

The toy specialty retailer considers toy supermarkets to be its main competition due to the sheer volume those operations generate. When a Toys "R' Us opens up near one of its stores, the company said it takes away 10 percent to 15 percent of its business for the first four months, before its customers eventually return.

To differentiate itself from the toy supermarkets, Hobby Center Toys has increased its stock from such European manufacturers as Ravensburger, International Playthings and Reeds. The imported higher quality merchandise doesn't necessarily mean higher prices, Savino said, with many imported toys selling between $10 and $30.

For example, a Quercetti Lunapark Gear Circus game sells for $16 and a Ravensburger Four Seasons game for $12. "It is a way to maintain markup in this business because we can limit markdowns and sell higher mark up merchandise,' he added. "We are taking the best of both worlds by mixing promotional with a mix of imports and quality hobbies.'

The mix is visibly apparent in a Hobby Center Toys store. In an average store, the right aisle, aimed at girls, has one side containing such merchandise as expensive collector dolls priced as high as $3,500, and the other side carrying promotional dolls such as Barbie. The left side of the store, merchandised as the boys aisle, has one side containing radio remote control cars, boats and airplanes priced as high as $300; the other side has promotional items such as Masters of the Universe.

One of the difficulties in dealing with imported items, confides Savino, is that it involves limited marketing. An importer may have the product at one time and then when the chain would like to recorder finds that the importer no longer carries the product.