Little Mountain hits mark with niche kids store

Retailer focuses on gear, apparel for active families

By Tanya K. Merritte -- Kids Today, 11/1/2006 12:00:00 AM

With countless opportunities for skiing, hiking, biking and other outdoor activities, Colorado is often sited as having some of the leanest and fittest residents in the country. For many people, it's a way of life and it only makes sense that when these people become parents, they want to share their experiences with their children. Enter Little Mountain.

The retailer, based in Boulder, has been around for 10 years. The current owners, Dan and Lori Nichols, purchased the one-store operation in 2005. Dan said he had managed retail stores geared toward outdoors and recreation for about eight or nine years, and he was looking for a change. "I knew the industry well," he said.

Nichols said the apparel, gear and gift retail store had a slightly rocky history before he bought it last year. The original owners opened the store in 1996 and had great success for the first three or four years. When a mall opened outside of Boulder, the owners opened a second store there and turned the original shop into an outlet center. The mall store ended up failing, and the owners moved back to the original shop at the end of 2003. Nichols said that when the store changed ownership last year, Little Mountain was approaching its original success. He has made some changes that have boosted sales in the past year, which are under $500,000.

The 1,000-square-foot store sells a mix of apparel and gear such as strollers, backpacks and carriers. Gear accounts for about 15% of sales. Little Mountain's major vendors are BOB, Mountain Buggy, Phil & Teds and Chariot for strollers; Baby Björn and Ergo Baby for front carriers; and Ergo Baby, Sherpani and Deuter for kid carriers. The median price for strollers is about $375, Nichols said, with the $359 BOB Revolution being the top seller.

Since taking over the store, Nichols has boosted the apparel offerings, which previously were limited to outerwear, hiking gear and swim wear. He has added more year-round and casual clothing from well-know outdoor companies like Roxy and Quiksilver. The store offers apparel in sizes newborn through 14. Shirts retail between $16 and $35, jeans costs between $38 and $50, and sweatshirts are between $35 and $50. The store also carries snow shoes in sizes newborn to 6.

Nichols said he has noticed the kids apparel business seems to be growing and expanding. Roxy and Quicksilver, which previously started their clothing sizes at 2T, have recently added sizes 12, 18 and 24 months to their lineup. Nichols plans to add these sizes to his product mix in the spring. Nichols said traditionally baby items have been a tough sell for a few reasons: his store wasn't a destination for baby items, he wasn't sure of the demand and manufacturers were not meeting the style needs. But he's optimistic about the future of the category, particularly in the gift market. By expanding more baby sizes, he expects more people to stop in while shopping for showers and birthdays. "Now that I'm selling those products, people will come looking for it," he said. "It will sell well for gifts."

Nichols does his buying at Outdoor Retailers, a regional market, and he attended the ABC market for the first time in September. He said the show wasn't quite what he expected in terms of shoes and apparel sizes for older kids. His store is hard to buy for, he said. "I'm in different marketplaces — baby, outdoor, shoes, apparel," Nichols said. "There isn't a single trade show that does it all for me."

The store's unique merchandise mix also means that Little Mountain doesn't have a direct competitor. Nichols said there is another local store that sells kids outdoor gear, but it is consignment. The local REI, a national outdoor supply store, sells some kids footwear and apparel, but only carries one line of strollers. The closest Babies "R" Us is about 20 minutes away. Nichols said that Target and Old Navy are popular places for clothing, but added "We can compete with brand-name apparel for parents and kids who care about that."

Nichols said if a certain item isn't selling well, he will either move it to another location in the store or discount it. He said it makes more sense to him to begin making small markdowns early rather than waiting to slash prices later. "A good retailer should be able to quickly identify early in the season what will be a good seller," he said. The store also maintains a sales rack and will frequently have sidewalk sales.

The store's customers tend to be people who were active and involved in outdoor activities before becoming parents and they want to share that with their children. "People in Boulder want to continue to enjoy an active lifestyle with (their kids)," Nichols said.

He added that his store serves a specific niche market and his business model isn't ideal for every geographical area. "You couldn't put this in Cleveland," he said.

To draw customers, Nichols uses a variety of methods including print (newspaper and glossy), direct mail and the Internet. He spends about 7% of the store's budget on advertising.

He also works with local groups for cross-marketing. One partnership is with an active moms group. The store gives discounts to the group's members and in exchange, the group sends out e-mails to help generate more business. Nichols has a similar deal with the Boulder Recreation Center — members of the center get discounts on certain items in the store.

Nichols said it was a bit tough when he first bought the store because of the timing — he and his wife bought the business only about three weeks before the birth of their daughter, Naomi. "It presented a challenge and left no time for planning," he said. Since then, Nichols said his biggest challenge has been time management and prioritizing what has to get done. He said that it helps that he is careful about hiring — the store has three employees in addition to he and his wife.

Nichols is also working to enhance the store's full-service Web site, which accounts for 5% of sales. For example, he plans to add more strollers, but doesn't have the square footage in the brick-and-mortar store to do that. "I see a lot of potential growth there and it's a lot cheaper to operate an e-commerce site," he said.

He added that the site presents more work but is less of a financial risk.

But despite the challenges, Nichols said it's worth it to help customers.

"I really like seeing their satisfaction with the product."

Little Mountain's stroller vendors include Mountain Buggy, BOB, Phil & Teds and Chariot.

Owner Dan Nichols said many of his customers are people who had active lifestyles before becoming parents and they want to share that with their children.

Since taking over the store last year, Dan Nichols has diversified the apparel merchandise buy offering more casual looks in addition to outerwear, hiking and swimming clothing. Apparel is available in sizes newborn through 14; shoes are newborn through a kids size 6.

This messenger bag from Sherpani could double as a diaper bag for the active mom on the go. In addition to the store, Little Mountain has a full-service Web site for ordering merchandise.