Busy Beaver back in the swim

prrrsnuncH. Pn.-eesEo Busy I Beaver, a chain of l5 stores, was founded in 1962. Yet when recent customer surveys responded, "Didn't know you had more stores/were still in business," they knew they were in trouble. Trouble right here in River City. Trouble with a capital T that rhymes with C and that stands for Competition, to borrow from The Music Man. Big boxes loom on every skyline.

C.e.o. Joe Kallen, the sharp, young (30!) gent who bought Busy Beaver just over a year ago, knows that. As someone with a background in commercial real estate-particularly, buying failing companies and turning them around-he saw the oroblems.

and-this time, to quotc Pogo, "they were us."

And mostly arising from the "the way we've always done it" stagnation that had set in. Joe knew the company's bones were strong: the basic positioning and staffing of the 15 storesso he knew the rest was fixable (especially if you're the Sleepless in Pittsburgh type who spends 24/7 on the job, as Joe seems to make his habit).

During the Eighties, the company had been in and out of bankruptcy proceedings, working with the old warehouse formula for their footprint, in which they led the pack back in the day before the boxes sideswiped them with their own similar concept and simply did it better. So Busy Beaver closed stores where competition had become heavy and opened others in more favorable markets. Today those mid-size markets- which marketing director Stephen Derr calls the B and C markets-still suit the plan. Four stores have undergone remodeling under Joe's watch so far, and two more are slated in the next few months.

Joe has also opened Busy Beaver's first new store in eight years in the trendy Lawrenceville neighborhood of Pittsburgh and plans two more ("I'd be disappointed if it's not three") in the coming year.

"We're not mom-and-pop, but we're not as big as a box store, either. We're right in the middle, the best of both worlds in size and product selection. Most of our stores lie in a 250mile radius and are set in small neighborhoods, to best position us to stave off the competition," explains Steve. "But from a marketing perspective, Joe and I agree we should be better known than we are, because Pittsburghers are loyal to their local brands. Joe understands and supports the store's image and branding incentives. For years we've been playing defense. not offense. as we should be and will be, and that's why this is an exciting time for us. He comes here as a breath of fresh air, which makes my job easier."

The Lawrenceville store-the new crown jewel-serves as role model. True to Busy Beaver's practice of improving an existing location rather than building from the ground up, the company took over a former, long- empty supermarket of 23000 sq. ft. and refigured it to suit the neighborhood. Over 500 locals responded to a survey with a wish list, noting "some things we already knew and some we didn't," says Steve. "The best thing is, they felt they were being included."

NEW LOCATfON in Lawrenceville, Pa., features a prolotype (upper) Color Caf6 Paint Center and (lowel lool rental center.

In response, Busy Beaver added a line of bike accessories geared to this two-wheeler crowd, the metal overhangs for front doors (popular in their home designs), a tool rental department, and the black Dickies work pants they demanded. The parking lot, newly planted with greenery, is now designated as a community gathering place, already utilized for events by the fire department and Boy Scouts. Food trucks are a strong probability, too. "We consulted with local development and community groups in order to place a bigger emphasis on helping our community parr ners-be part of the Boys and Girls Clubs, Children's Hospital events," Steve says.

"We not only open new stores, we open with a bang!" exclaims Joe. "Over 1 ,000 people attended our Lawrenceville grand opening in October, a big neighborhood picnic. Sales were awesome."

And inside, don't expect the same old same old. "We saw lots of inefficiencies and wanted to improve on the customers' shopping experience: to be more efficient in less space, like long hooks, not top stock; peg holes where there used to be racking. So even though it's smaller, the store looks much bigger and brighter," he continues.

True to his habit, Joe has analyzed every single 4-ft. stretch of shelf space, adding SKU's and reorganizing others. ("For instance. the toilets were in one aisle and toilet seats in another," he laughs.) A wider selection of doors was added, along with longer-length lumber to appeal to contractors-though 9OVo of Busy Beaver's business comes from retail trade, where the average transaction is $30. "We're happy with that, but will work to improve it. We're budgeting for greater profits, thanks to buying things better. We pass on some of those savings to our customers, too," Joe adds. "We're a point and a half ahead of last year in same-store sales."

In some instances, aisles were actually removed to create open floor space for displays, especially seasonal items like patio furniture and holiday items. "We'11 place a lot more emphasis on seasonal from now forward," Joe vows.

The Kensington store has undergone improvements, too, from simple things like placing the bathroom vanity and mirror displays against colored walls so they'll stand out, to more complicated resets such as adding windows to a blank wall so the nearby garden comes into view.

"It's all aimed at improving the customers' experience: a fresh set of eyes from the customers' perspective," Joe underscores. And that, of course, requires a new outlook by-and set of expectations for-the staff. Joe knew it was vital to translate an existing policy into a formal, written statement. "We call it our 'We Are Legendary Customer Service Policy,"'Joe says. "We initiated it via conference call with all our general managers. Everyone was asked to go over it, sign it and commit it to memory. What it basically does is, mandate that we interact with customers at every level. Then we sent in secret shoppers to ask about the [posted] pledge and gauge employees' attitudes.

"We've had good results so far. The staff not only knows it and could repeat it, but, what's more important, they know what it means. It acts as a morale-booster, too; they can see positive results of my taking on the business." He awards a couple of merit prizes each month to drive the message home.

"He's done a good job in changing the culture: plans it, documents it-the goals, the timelines," Steve testifies. "And he's relentless in execution. He spends a ton of time in our store. Communication was minimal before, and now it's 24/7'. there's a different level of commitment."

Relationships with vendors have been upended, too. "That needed improvement as well," adds Joe. "Now there's a partnership, not the former vendor/customer model. Both of us were looking for ways to improve."

Well then. What's next? Resurrect yet another enterprise? No, no, Joe assures us: "I love it and I'm in it for the long haul." He's one Busy Beaver.

Carla Waldemar cwaldemar@ comcast.net

By Wayne Rivers