Fresno store-within-a-store trend benefits retailers

The Fresno BeeFebruary 11, 2012 

Don't be surprised if you find your favorite store in an unexpected place: inside another store.

The store-within-a-store concept is growing in Fresno and nationwide as a way for bigger businesses to nab new customers and smaller shops to grow without paying big bucks for their own stores.

Expect to see more of it: J.C. Penney's new strategy will bring many more shops into its department stores, starting with a Martha Stewart store. And Target is bringing independent candy stores and pet stores to its more than 1,700 locations.

"Store within a store" is a catchall term that covers a variety of arrangements. Some stores sublease floor space from a bigger retailer. Others aren't really a second store at all, somebody else's products displayed as if they're in a separate shop.

The concept has been around in some form for years: McDonald's inside Walmart, Subway sandwich shops inside gas stations, and even some department store cosmetics counters run by the companies that manufacture the makeup.

But as retailers of all sizes deal with tight budgets and search for new customers, many more are turning to the store-within-a-store concept.

The Fresno Brewing Co. at 1243 Fulton Mall, which opened 21/2 months ago, has welcomed a new retailer into its coffee shop.

Twee Too: Retail Therapy opened in a tiny space -- 220 square feet -- inside the coffee shop last week. It sells handmade necklaces, socks with mustaches on them and "I'm kind of a big deal in Fresno" T-shirts.

It's the second location for Twee, which opened in the Tower District in 2009.

The Fulton Mall location has a front door facing the mall, but owner Melanie Davis blocked it off so customers must walk into the coffee shop to get to Twee Too.

With a decidedly noncorporate mentality, Fresno Brewing Co. owner Ephiram Bosse also allows a man who repairs musical instruments and another who repairs and builds bikes to work out of the space Twee doesn't use. A baker uses the kitchen to bake goodies for the coffee shop and her outside company.

Customers there for the coffee can browse Twee. And Twee customers who check out the new shop can get a cup of coffee.

Fresno Brewing Co. benefits from loyal Twee fans, including more than 2,000 Facebook fans.

"Her clientele are definitely the kind of people we want in here," Bosse said.

For customers like Fresno lawyer Cadee Peters, it's about convenience. Twee's opening brought her into the coffee shop for the first time. Now she likes to walk from her nearby office, get a cup of coffee or tea, and browse Twee.

"It's like one-stop shopping," she said. "You have the opportunity to kill two birds with one stone."

The Crazy Cowgirl Closet inside A1 Feed Store at 5092 N. Academy Ave., east of Clovis, has a similar arrangement. Codi Ricken co-owns the feed store with her father. Since she is working at the store anyway, she opened the Crazy Cowgirl Closet selling purses, jewelry, jeans and gifts and expanded it in November.

Ricken thought about renting a separate space elsewhere for her shop, but didn't want to take the risk or spend the money. Now she benefits from customers who come in to A1 Feed for other reasons, and some who bring wives who check out the shop.

"We get a lot of men who are shopping for a gift for their wife, who don't want to drive into town and who are in the store anyway picking up hay and feed," Ricken said.

Other boutiques have found their footing inside other shops before expanding into their own space.

Somewhere in Time antiques started inside an antique mall and now has its own space on Pollasky Avenue in Clovis. The boutique Ivy & Lace started inside another store, Heart's Delight, and now has its own space in Old Town Clovis.

On the other end of the corporate spectrum is J.C. Penney, which unveiled a long list of changes Feb. 1. In addition to the streamlined prices and wider aisles, the retailer is planning to roll out 100 shops within the stores over the next 31/2 years. The shops will use walls that hold clothing to set them apart from the rest of the store.

The Nanette Lepore brand, which normally sells pricey women's clothing at big-city boutiques, will unveil the J.C. Penney line of affordable clothing for 13- to 19-year-old girls next year called L'amour Nanette Lepore.

The Martha Stewart shop will open in the home store next year.

The concept was inspired by the success of Sephora stores and the MNG by Mango women's clothing line, inside J.C. Penney.

Both Sephora and Mango have freestanding stores around the country. Inside Penney's, the merchandise is set apart from the rest of the store, sometimes with walls, to look like an independent store.

The brand names bring new customers into Penney's, but it's still Penney's selling the product. The retailer buys and resells the merchandise the same way it would any other brand. The workers at the Sephora and Mango stores are Penney's employees.

Nationwide, Sephora inside J.C. Penney stores sold three times as much as the rest of the Penney's store on a sales per square foot basis.

The Sephora store brought in loyal Sephora customers who wouldn't otherwise shop at J.C. Penney, said General Manager Steve Petlewski. And through surveys and customer comments, the store learned that some of them were impressed with what they saw and returned to shop the rest of the store.

With the average Penney's customer visiting the store four times a year, management hopes the shops will lure customers more often.

"These brands all have name recognition," said Jeff Green, a Phoenix-based retail consultant. "Sephora is known as a quality brand, a younger brand, a hipper brand. That's what J.C. Penney was looking for there."

When stores move into larger retailers, it's often a way to push their products without the expense of building a full store from scratch, Green said.

In some cases, the stores Penney's plans to roll out aren't new brands or outside retailers at all. They're brands the retailer already carries, like Arizona denim, repackaged to look like a separate store.

Other stores have brought new companies under their roof out of necessity.

Best Buy made changes after facing slipping sales and shrinking inventory. With products literally getting smaller -- think smaller laptops, and flatter TVs -- the retailer found itself with too much space, Green said.

It shrunk stores, including the MarketPlace at River Park Best Buy, which built a new wall to make the store smaller, and brought in other stores. Best Buy bought the 14-store Pacific Sales Kitchen and Bath Centers in 2006. It also bought audio/video shop Magnolia Hi-Fi in 2000.

Both stores now operate as Best Buy subsidiaries, though signs above the refrigerators and stoves proclaim a Pacific Sales shop. Price tags on TVs say they're Magnolia store products, though they're really sold by Best Buy.

Target is planning to capitalize on the store-within-a-store concept, too. It's testing "extended displays" of Apple products in 25 stores.

Fresno-area shoppers will soon see "The Shops at Target," debuting May 6.

Target has partnered with five independent retailers, including San Francisco's The Candy Store and Boston's Polka Dog Bakery, that will offer limited collections under signs that set them apart from the rest of the store.

The reporter can be reached at bclough@fresnobee.com or (559) 441-6431.

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