This Lone Star shines in Texas

This Lone Star shines in Texas

by Gerri Hunt -- Kids Today, 8/1/2009 12:00:00 AM

Everything in Lone Star Baby & Kids’ nursery vignettes is for sale.

In the summer of 2007, Michael Schaul hadn’t worked the sales floor in five to six years. He’d been staying busy running three USA Baby stores in Texas with his wife Karen. And then things went into high gear as he worked to re-brand his locations as Lone Star Baby & Kids.

But the company president happened to be on the sales floor one day when a customer walked up, needing help with a stroller. Schaul steered her toward his metals department.

“There was a long line of 50 to 75 strollers, and I thought to myself, 'where do I begin?’” he recalled. “Then a light bulb went off in my head, to start with a brand. It’s much easier to start a conversation around a brand than a stroller.”

That customer interaction sparked what Schaul considers one of his best business ideas: to organize the gear by brand.

“A lot of customers who come in know brands,” he said. He took the idea to manufacturers, who loved it.

When the Arlington store relocated to North Richland Hills that year, he utilized the new merchandising concept for the metals department.

“Instead of showing all the strollers together, then car seats, etc., we have set up metal galleries by vendor, so that the vendor can brand all its merchandise together,” Schaul said. “Consumers are so driven by brand today that this concept has improved their shopping experience.”

It was such a success that in December 2008, he took 1,000 square feet from the warehouse area of the Frisco store to expand the department.

“Even with our bigger competitors, our metals section is bigger than theirs,” Schaul said. “It has made it easier for our sales associates to sell metal, which has increased both our top and bottom lines.”

For years, his three stores had already been using galleries for their furniture.

“All our furniture is displayed in vignette room settings. Typically we try to put a manufacturer’s different groups together in a gallery setting,” Schaul said. “It is convenient for our customers and sales associates when a manufacturer’s furniture is displayed and grouped together. In addition, the sales process is enhanced.”

And that’s one reason customers shop Lone Star Baby & Kids.

“Our store layout and design has a powerful pull upon the hearts of parents,” Schaul said. “We have created nursery room vignettes in our stores to provide parents with an opportunity to see what they can do with their new baby nursery or kids room. Everything in our room vignettes is for sale.”

He said unequaled product quality and selection also draws customers. “We have a large product selection to choose from containing different styles, colors, finishes and fabrics. Our competitive pricing philosophy guarantees that our customers will receive the lowest price available.”

Schaul cites knowledgeable and helpful store employees as another customer attraction. New employees are well-trained, and the entire staff attends a weekly meeting, during which product, sales and system training is conducted and refreshed. “It’s a Saturday morning ritual, and it covers things like how to process a baby registry.”

Recruiting, hiring and retaining good employees is a big duty of a small business owner, and Schaul is quick to point out that “exceptional employees make our business successful.” He keeps “Now Hiring” signs on display at all times.

“You just never know when that 'exceptional’ employee will walk through the front door,” said Schaul. “We also advertise online, on monster.com and jobbing.com. And we have an employee referral program in place … if an employee refers a new employee to us who lasts through our 90-day probationary period, the referring employee receives a cash payment.”

With a manager, two assistants, six to eight sales associates and a few warehouse people in each store, one of Schaul’s biggest challenges is managing the staff and keeping them challenged on a daily basis.

“Some staff members have been with me since 2000. They’ve grown with me, and want to be a bigger part of the business,” he said. “It’s hard letting them off the leash, but we must keep them challenged.”

But he applauds his staff for handling all customer service issues.

“I don’t talk to customers, because I’m working with manufacturers. But one of my sayings has always been, 'what would Mike do?’” he said. “That’s how I want them to think. You can’t give away the store to all customers who have an issue. If it comes to a point that there’s a problem, they take care of it the way I would.”

Schaul admits that he probably makes a mistake himself each week. “But I try never to make the same mistake twice. Great determination, and listening to our customers and our employees, helps keep me out of trouble.”

Schaul said that specialty store retail has been the most challenging endeavor of his career.

He spent 20 years in corporate America working for a Fortune 50 oil company, as a management consultant, and then as an import men’s apparel entrepreneur, and living all over the world. After residing in Wisconsin, Schaul and his wife finally settled down in Texas, after doing a lot of homework on the USA Baby franchise system.

They opened their first store in Richardson in 2001. They opened a second store in Arlington the following year, recruiting their best friends from Wisconsin, Jeff and Christie Briggs, to run it. A third store opened in late 2004 in Frisco.

The Richardson store relocated to Dallas shortly thereafter, followed by Arlington moving to North Richland Hills.

“My next career challenge is to grow through franchising our business system nationwide,” said Schaul. “Although the business and economic climate is extremely challenging today, we as a company need to forge ahead looking for new business opportunities.”

One of those opportunities is the Internet, which Lone Star uses to reach customers.

“Although direct mail and local print advertising still have an impact, we believe that the Internet and our Web site, LoneStarBaby.com, are central to our future advertising and marketing strategy,” he said. “Today’s generation of new parents has grown up with the Internet and it will continue to be a more valuable informational resource.”

Schaul said that besides adding brick-and-mortar stores to the franchise, there is a lot of opportunity through the continued growth of online shopping.

“We look to online sales to be a major part of our future growth, he said. “And we are just starting to understand the power of social marketing tools available online – Facebook, Twitter and video blogging. These will continue to become more important with the younger generation of new moms and dads.”

And that’s just part of how Lone Star is keeping tabs on the economy.

“We have tried to lower our expenses and increase our margins by managing freight better and bringing in more direct container merchandise,” Schaul said.

He also continues to promote value, selection and customer service in their marketing messages.

Displaying gear by vendor has been very successful.

“Farther into the future, I hope to continue to build a financially successful branded business that employs and partners with energetic and happy people who satisfy customers on a daily basis,” Schaul said. “I still think there’s a place for specialty retailers. There’s definitely an opportunity here.”