Mall Expansion

Norman's Hallmark knows all about big numbers. The Norman Group franchise is more than 60 years old and owns 19 stores. Two of those stores are located on opposite ends of the Oxford Valley Mall in Bucks County, Pennsylvania, where they have had a presence since 1973.

In January 2000, the mall owner, Kravco Co., was faced with a vacancy in space adjacent to one of the Norman's Hallmark stores. Kravco wanted to strengthen that end of the mall with a larger store, and so approached Norman's about expanding into the vacant space. Kravco also offered The Norman Group the option of closing its second store in the mall.

Each store was about 4,000 square feet and each had posted annual sales of approximately $1,250,000. The question was, would growing one store to 7,622 square feet attract enough new customers to substantially increase sales? It was a significant risk. Nonetheless, Norman's decided to face the challenge, and to keep both locations open.

Construction on the expanded Norman's Hallmark began in July 2000. The company developed a two-pronged strategy for its new store. The first was to create an inviting entryway that harmonizes with the look of the mall and draws customers in. The second was to enlarge the store's giftware and home decor departments to offer shoppers more products.

Norman's Hallmark closed briefly to tear down a wall and complete ceiling and flooring work to merge the new area with the existing store. The new transparent storefront, with a "non-storefront look," showcases the inviting interior. Heavy emphasis is placed on lighting to both draw customers in and make the experience feel like shopping in the "open air."

Howard Henschel, president and CEO of the Norman Group, takes pride in having seamlessly connected the existing store with the new space. "It's as if we stretched the outer walls, rather than added on," says Henschel.

Once the new space was finished, Norman's had the opportunity to expand some of its most popular lines. The store has more than doubled its sales of Yankee Candle, to approximately $200,000, as well as adding a Lang section, and it was able to significantly expand its lines of Ty, Boyds, Precious Moments, Dept. 56, Crabtree & Evelyn, San Francisco Music Box, and Demdaco.

The home decor, plush, frames, wedding, and baby categories also grew, featuring a veritable who's who in the gift industry. Vendors include Possible Dreams, Pacific Rim, New Creative Enterprises, Lillian Rose, Russ Berrie, Old Virginia Candle, Joan Baker, Midwest, Blue Mountain, Lava Candle, Recycled Paper Greetings, Manual Woodworkers, Ganz, Goodwin Weavers, Dezine, Workman, Amscan, Colonial Candle, Burnes, Fetco, Godinger, Lady Jayne, and more.

According to Henschel, the goal was to increase sales in the new store to $2 million within two years, and $3 million within 5 to 10 years. In the first year, sales increased to $1.8 million (right on target), which raised the new Oxford Valley Mall store to the rank of fourth highest in the Norman's Hallmark chain. In the second year after expansion, the store posted approximately $2 million in sales. If all goes as planned, it soon will be number one in the chain.

But have the new lines cannibalized sales from the old standbys? Apparently not. According to Henschel, though the product mix has been increased, all of the previously existing gift categories have actually seen sales improve. Evidently, the new dollars are coming from new customers. Norman's customer counts have also increased dramatically, and the store is now serving a larger customer base.

How did Norman's do it? For someone who's the head of a retail chain that does a little of everything, Henschel has some surprising advice for retailers: "Focus on what you do best. Specialize."

Sticking to what they know best is The Norman Group's hallmark.