N. Fulton Business Journal 9/14

Alpharetta Business Association hosts expo page 8 n VOL 1. ISSUE 3

INDUSTRY FOCUS:

North Fulton Business Journal

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SEPTEMBER 2014

Greater North Fulton Chamber of Commerce names

SMALL BUSINESS PERSON OF THE YEAR

HOME DEPOT HAS STRONG 2ND QUARTER

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NORTH FULTON WOMEN IN BUSINESS PROFILE

BUSINESS EXPO

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NEWELL RUBBERMAID

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RIBBON CUTTINGS

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THE FUTURE OF 13

NEW AND NOTEWORTHY 14

BUSINESS ADVANTAGE

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Staff / James Swift

Agile Resources CEO and Founder Tricia Dempsey gives her acceptance speech after receiving the Greater North Fulton Chamber of Commerce’s 2014 small business person of the year award.

By James Swift jswift@northfultonbiz.com

PRSRT STD US POSTAGE PAID ATLANTA GA PERMIT NO 3592

5 THINGS YOU NEED TO KNOW about Johns Creek’s New Sign Ordinance

By Rachel Kellogg rkellogg@northfultonbiz.com

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SCENE: ALPHARETTA

DOWNTOWN ROSWELL

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WHAT’S INSIDE TECHNOLOGY

NFBJ

ALPHARETTA MAYOR TALKS TECH

The Greater North Fulton Chamber of Commerce named Agile Resources founder and CEO Tricia Dempsey the 2014 small business person of the year at an Eggs & Enterprise meeting Aug. 25 at Roswell United Methodist Church.

Dempsey started her informatioon technology recruiting firm in 2003. At the time, she had stage 3 breast cancer.

“Going through breast cancer, starting the business was such a positive thing to focus on,” she said. “To have made it to where we are now … I’m super proud of the accomplishments we’ve had to date.”

The accolade from the community and her peers, she said, was a true honor. “To be recognized in this capacity means more than they’ll know,” Dempsey said.

Dempsey said the chamber and small businesses can benefit from working together. “We can be equally strong advocates for each other,” she said.

Five finalists received the chamber’s Community Impact Award — Jennifer Arnold of Canine Assistants, Rose Burton of HomeStretch, Barbary Duffy of North

Fulton Community Charities, Rachel Ewald of the Foster Care Support Foundation and Tillie O’Neal-Kyles of Every Woman Works.

The four recipients of the chamber’s business person of excellence awards were Caldwell Tree Care’s Kevin Caldwell, Rich Coad of the Primrose School of Alpharetta and the Primrose School of Roswell North, Agile Resources’ Tricia Dempsey and KeyWorth Bank’s Jim Pope.

“Eighty percent of our membership is small business,” said chamber President and CEO Brandon Beach. “These small businesses that are hiring, 10, 15, 20 people … that’s really the sustainable future for us, to have these guys growing.”

Beach said the chamber had a long history of supporting local charities. “We’re very open-armed to the nonprofits,” he said.

“Our organization is a member of the chamber, and they have been incredibly supportive,” Burton said. “Many of the businesses have volunteered at HomeStretch, have made donations or had some corporate philanthropy with our agency.”

Additionally, North Fulton Community Charities Executive Director Barbara Duffy was named 2014 nonprofit leader of the year.

On June 16, Johns Creek’s city council adopted a new sign ordinance with changes that, ideally, will be more beneficial to the business community.

After its incorporation, the city adopted its own ordinance for signage which was, according to Johns Creek’s Community Development Deputy Director Justin Kirouac, “declared not business friendly by the businesses” within the city.

When it comes to signage, Kirouac said at a Johns Creek Advantage information meeting last month, the key is to find a happy medium that will let businesses publicize themselves, while also keeping motorists safe by not overcrowding their views and keeping residents happy with the aesthetics.

“We’ve come up with some minor tweaks that I think will be really beneficial to the business community, but hopefully still create the balance that were looking for,” he said.

Here are five important things business owners should know about the new ordinance:

1. Window signs With the old ordinance, businesses were allowed to cover a maximum of 25 percent of their total window space with no more than three different signs. But now, businesses can cover 25 percent of their window space with as many signs as desired. Before, each sign could be only be four square feet and only one sign could be illuminated. With the new ordinance, a maximum of four square feet — within that 25 percent — may be illuminated. Kirouac said this illuminated signage will typically be the business’ “open/closed” sign.

2. Banners Banner sign regulations have also relaxed, increasing the number of times a business can display them. Previously, businesses could display banners for 14 days just twice a year. Now the banners can be displayed for four 14-day periods each year. The 14 days can even be broken into two non-consecutive weeks as long as the dates are stated on the permit.

Published By

See SIGN, Page 5

INDUSTRY FOCUS: TECHNOLOGY

Alpharetta mayor says city’s tech success is

AN UNTOLD STORY

By James Swift

jswift@northfultonbiz.com

At last month’s Greater Alpharetta Tech Network meeting., Mayor David Belle Isle recalled speaking with a German company that selected Alpharetta as a relocation site.

He asked them why they chose the city to do business.

“I kind of knew what I was going to hear, to be honest,” Belle Isle said.

Their response, he said, was typical.

“We didn’t choose Alpharetta,” the site locator said.

“We chose Atlanta … and then, when we looked around Atlanta, we decided, OK, Alpharetta was the best place.”

With 600 tech companies within the city limits and one of the nation’s most extensive fiber cable networks, Belle Isle said Alpharetta’s “Technology City of the South” claim is hard to dispute.

Drilling into the data a bit deeper, however, he said the statistics were startling.

“When you look at the technology cities,” he said, “one of the objective requirements they look at is how many technology workers do you have per 1,000 workers?”

On most rankings, he said Austin, Texas is usually deemed the “tech center” of the South.

Staff / James Swift

At a Greater Alpharetta Technology Network meeting recently, Mayor David Belle Isle discussed the importance of tech businesses to the local economy.

Thirteen percent of its workforce, he said, was in technology sectors.

With 26 percent of its workforce in tech fields, Belle Isle said San Jose, Calif. is typically referred to as the nation’s technology mecca.

“I was wondering,” he said, “what percentage of our workers are technology workers?”

His estimate put the percentage of Alpharetta’s work force in tech jobs at about 44 percent — easily triple Austin’s numbers and close to double those of Silicon Valley. “We

have 1,500 technology workers per square mile,” he said.

Despite the impressive figures, Belle Isle said the city’s “story” isn’t being told — to the detriment of employers.

“We’ve had some great success stories with companies coming out of Alpharetta,” he said, “but in general, people don’t know our story.”

Both the Alpharetta tTechnology Commission and the Greater Alpharetta Tech Network, he said, were pivotal in expanding Alpharetta’s brand.

“One of the features we try to do through the technology commission is to create community among the technology companies, which we can’t do with 20 people,” he said.

“We’re really trying to leverage the leadership of the companies that are here.”

High-ranking officials, he said, appear to be taking note of Alpharetta’s “story.”

When the Fiserv groundbreaking was held earlier this month, Belle Isle recalled the words of Gov. Nathan Deal and Chris Carr, Georgia Department of Economic Development commissioner.

“When you have the top two guys in economic development for your state telling your talking points before you’ve even gotten up to speak,” he said, “it’s a good day in Alpharetta.”

Catavolt CEO: Tech startups key to Alpharetta’s technology boom town

By Rachel Kellogg rkellogg@northfultonbiz.com

The city of Alpharetta debuted its new economic development website at the third annual Alpharetta Technology Commission dinner recently.

The site, at www.growalpharetta. com, is designed to meet the needs of businesses seeking the best place to locate and explains why Alpharetta has become such a booming technology hub.

Among the featured speakers at the event were Curtis Clark, global government director at IBM and George Mashini, CEO of Alpharetta-based technology company Catavolt, which creates apps and software for other companies.

Mashini spoke to the attendees at the dinner, which was held at the Metropolitan Club, about why Alpharetta was chosen as the home of the start-up.

Using Silicon Valley as an example, he said there is a reason it is located just outside San Francisco and not in the city.

It would have been difficult, he said, to change the way people already did business in a city like San Francisco, where it already had an established culture.

“They needed almost a blank slate,” he

said.

“That’s the way I look at Alpharetta the same way. Atlanta has a very unique flavor. It’s one that would be hard to change and we shouldn’t change it.”

He continued, saying Atlanta is made up of “the creative and the corporate” while Alpharetta’s companies and its workforce are more “enterprise-focused.”

“That’s really why we stayed here,” he said.

“We wanted that talent. We wanted people who have done big things.”

Mashini said the tech community in Alpharetta should be working to increase awareness about the city and why it works well for new companies.

“If more people knew what I knew when we started Catavolt, you would see more start-ups in Alpharetta,” he said.

“And those start-ups … are the seeds for what’s going to happen 10 years down the line.”

Mashini said since Catavolt started in Alpharetta in 2011, it has gained clients in more than 30 countries.

At the end of the dinner, Mayor David Belle Isle announced the hiring of Mark Hubbard as the new director of the commission.

2 SEPTEMBER 2014/NORTH FULTON BUSINESS JOURNAL

Staff / Erin Gray

CEO of Catavolt George Mashini talked to the guests of the third annual Alpharetta Technology Commission dinner.

INDUSTRY FOCUS: TECHNOLOGY

Peak 10 opens new data center in ‘golden corridor’

By James Swift jswift@northfultonbiz.com

While the official grand opening is not until October, Peak 10 offered a sneak peek of its newest data center at an event Aug. 28.

The Charlotte-based information technology infrastructure company announced it was moving to the Golden Corridor last year. The 15,000 square foot facility is located off Windward Parkway at 12655 Edison Drive.

Company CEO and President David Jones said his company had maxed out its available space at its other two Georgia data centers in Norcross.

“We did a very extensive canvas across Gwinnett, north Fulton and even the Kennesaw area,” he said. “Because

of the technology corridor and the power capabilities … when you look at the customer base we serve, the mid-market, it just made a lot of sense.”

A major benefit of the relocation, he said, was the room for future developments.

“That makes it a lot easier for us, because next time, we won’t have to go searching for land.”

The company’s 26th data center, Jones said, was truly state-of-the-art. “I guess you could say it’s our fourth generation of data centers,” he said.

Alpharetta Economic Development Director Peter Tokar said while he cannot give an estimate for the number of jobs the new facility may create, the center’s shared-space structure certainly could draw employees to the area.

“What makes Peak 10’s center so unique is the fact that they have an office component to it as well,” he said. “Potentially, with the available offices that they have here, they could create literally a few hundred jobs.”

In addition to the data center and upstairs office space, the facility is also home to a business disaster recovery space and a meeting space open for possible community events.

“We offer so much more than we were able to offer before,” said company Vice President and General Manager Angela Haneklau. “We now have a facility to really complement our footprint in Atlanta.”

Alpharetta-based Lancope Inc. was announced as the facility’s first official tenant.

“It’s great to know they’re only five

minutes away from the rest of the team,” said President and CEO Mike Potts.

Greater North Fulton Chamber of Commerce President and CEO Brandon Beach said his organization is committed to providing a high quality of life to transplant businesses like Peak 10.

“The chamber and the state love ribbon cuttings, because that means you’re investing in our state and in our community,” he said.

“But more importantly, you’re hiring people and adding jobs.”

Through their data and storage services, Mayor David Belle Isle said Peak 10 was an “enabler” for other businesses.

“As happy as we are to have you here just for your own sake,” he said, “what we also equally love is that you’re helping the companies that are here be more successful.”

In virtual world, Alpharetta businessman finds real success

By James Swift jswift@northfultonbiz.com

Todd Harris knows the ins and outs of the software business.

Starting off as an engineer for NCR Corp., he would later work for BlueCube Software and Radiant Systems. Nearly a decade ago, he decided to leave the pointof-sales industry behind for an entirely different field — online video gaming.

Alongside Erez Goren, Harris cofounded the Alpharetta-based Hi-Rez Studios in 2005.

“He hit me up with the idea of starting our own game company,” Harris said, “and him being able to basically be an angel investor to give us funding until we found a revenue model that worked.”

Neither were strangers to game design.

Goren wrote his first computer game in high school, while Harris included one of his home-developed games in his application to the University of North Carolina.

At a Golf Club of Georgia event sponsored by the Greater Alpharetta Technology Network in August, Harris spoke about turning the startup into one of the region’s largest video game companies.

The company’s first title, “Global Agenda,” was released in 2010. It followed up with 2012’s “Tribes: Ascend,” another critically acclaimed “freeware” title which PC Gamer magazine called one of the greatest “shooter” games of all-time.

Earlier this year, Harris’ company released “Smite,” an ambitions MOBA — a multiplayer online battle arena game.

The title has proven so popular that the company has scheduled a three-day World Championship tournament to take place at the Cobb Energy Performing Arts Centre this January. The winner will take home more than $500,000 in prize money — a sum almost certain to increase with community contributions and exclusive content revenue.

From the beginning, Harris said the company was focused on digital content distribution. “We built the company to only make games that were online, that we could always update,” he said. “We have constant feedback into our database, realtime, as millions of people are playing us.”

However, the company did not adopt the “freemium” model until its first game had already been released. After making the switch, Harris said the impact was immediate.

“A lot of people were talking about this model out of Asia called ‘free-toplay,’” he said. “We saw that had very real benefits … the number of players every day downloading the game was up by a multiple of five.”

Harris said company revenue is derived entirely from in-application purchases of virtual items such as costumes, voice packs and new characters.

“Even though no more than 10 percent of the people, generally, will chose to pay us,” Harris said, “that can work from our business model standpoint.”

Recently, the company announced a partnership with Tencent Holding Ltd. to bring “Smite” to China. The company also signed a deal with Microsoft to bring the

Staff / James Swift

Hi-Rez Studios Co-founder Todd Harris spoke about his local video game company at a Greater Alpharetta Technology Network meeting Thursday. game to the Xbox One platform.

Last December, the company had 70 employees. Today, it employs 140 people.

“That is all based on growth, really, in North America and Europe,” he said.

“Even now, while we’re going through this doubling phase … we try to keep this organization flat, we really try to grow by cell division, by breaking off portions where people can rise to authority.”

With low costs of living and a solid technology infrastructure in place, he said that Alpharetta has the potential to become a gaming hotbed.

“The No. 1 thing that would help is just a breakaway success story,” he said. “That will attract other investments and talents to the area … whether it’s us or someone else, that’s really the most likely event to cause other game studios to pop up.”

Alpharetta becomes first city in metro to allow 911 text messaging From Staff Reports The city of Alpharetta announced Monday that residents who have Verizon or T-Mobile as their wireless carrier can now send a text message to 911 when faced with an emergency situation.

The city is working with AT&T and Sprint to extend the service to those carrier’s customers.

Alpharetta is the first municipality in metro Atlanta to introduce the service.

Only 100 emergency call centers out of more than 6,000 across the U.S. are capable of receiving and responding to text messages.

“The safety of our residents and visitors is our top priority,” said Alpharetta Mayor David Belle Isle.

“The Text to 911 Service could be a life-saver for those in an emergency who may be unable to make a voice call. As the Technology City of the South, we are proud to be among the first to leverage this capability to elevate the emergency services

provided to our citizens.”

Alpharetta officials are quick to note that voice calls to 911 are more reliable and faster than text messaging. “Unlike with a voice call, geographic location services are largely unavailable when someone contacts the 911 center via text,” said Alpharetta City Councilman D.C. Aiken, who serves as liaison to the department of public safety. “As a result, it could take slightly longer to dispatch emergency services in a Text to 911 situation, and in an

emergency seconds can literally become a lifetime.” Belle Isle agreed, saying that Text to 911 should be used only when it is not possible to place a call and talk to a 911 operator.

“The service is intended mainly for those who are unable to speak, either due to a physical impairment or the nature of the emergency they are facing,” he said.

Text to 911 messages have the same 160-character limit as other text messages, so it is important to include specific location information and the

nature of the emergency within the first few words of an emergency text.

Citizens should also avoid using text abbreviations or slang, as these can cause confusion and delay vital emergency services.

Text to 911 should be used only in an emergency that requires immediate attention from fire, police, or emergency medical services.

Non-emergency issues should still be communicated to the department of public safety through its nonemergency line at (678) 297-6300.

NORTH FULTON BUSINESS JOURNAL/SEPTEMBER 2014 3

IN THE MARKETPLACE

Local financial pro showing way to retirement

By Bobby Tedder btedder@northfultonbiz.com

Although Scotty Hendricks Jr. is far from approaching his own retirement years, he makes a living helping others prepare others for theirs.

The Sandy Springs-based financial whiz has made a career out of playing to his strengths — communication, foresight and a head for numbers.

That narrative, which spans 15 years, entails sales and marketing experience, forging working relationships with Fortune 500 companies and shaping his own entrepreneurial ambitions.

Hendricks recently sat down with the North Fulton Business Journal to discuss his line of work and the big picture in regards to retirement.

Q: How would you break down your job description?

A: I am a licensed financial professional who focuses on design, review and implantation of retirement plans that employers sponsor and provide for their employees. 401k and 403(b) plans are an example of what I assist my clients with.

Q: Who are your clientele?

A: My clients are employers who sponsor retirement plans that have between $2 million and $10 million in assets and anywhere from 10 to 400

employees.

Q: What is a question that you get asked often, relevant to your job?

A: The question I get asked most often when I tell people what I do is, ‘What can I do to prepare myself for retirement?’

Q: In your opinion, how ready, generally, are most people for retirement?

A: In my opinion I don’t think the average person is ready for retirement.

Q: Why do you think that is?

A: I think this is the case because most people don’t realize how much money they will need to live the lifestyle they want to live during retirement — especially since people are living longer and longer now.

Q: What are your keys to success?

A: I believe in connecting with people that are smarter than me.

This way, I am constantly challenging myself to learn more and find ways to do business more efficiently and effectively.

Q: What advice would you give to someone who’s considering entering your profession?

A: I would tell them that they have to be comfortable asking questions and not [be] afraid of the word “no.”

I get told “no” more times a day then I can count, but if I never asked the question, then I never would have the opportunity to hear the word “yes.”

Home Depot second quarter profit climbs

By Michelle Chapman and Anne D’Innocenzio Associated Press Writers

Home Depot’s fiscal second-quarter net income surged 14 percent thanks to a rebound in its spring selling season.

The nation’s largest home improvement retailer also raised its annual profit guidance Aug. 19.

Spring is the biggest season for home-improvement retailers, as homeowners and others work on their yards and gardens.

While the season started off a bit cold and rainy, weather improved and shoppers headed out to stores to pick up supplies.

In particular, purchases over $900, such as appliances and water heaters, which account for 20 percent of total U.S. sales, rose 8 percent “These results support the view of a continued recovery in the U.S. home-improvement market,” Frank Blake, the company’s CEO, told investors during its earnings call.

The company has also been helped of late by an improving U.S. housing market. Home prices have started to rise and there’s been steady job growth and fewer troubled loans dating back to the housing-bubble days. While the housing market has recently had a bit of trouble maintaining that momentum, many home owners are spending more to renovate their homes.

Aug. 19, the government offered encourag-

ing data on the housing market. The U.S. Commerce Department reported home construction rebounded in July, rising to the fastest pace in eight months and offering hope that housing has regained momentum after two months of declines. Home construction increased 15.7 percent in July to a seasonally adjusted annual rate of 1.09 million homes.

Applications for building permits, considered a good sign of future activity, also showed strength in July, advancing 8.1 percent to an annual rate of 1.05 million, after declines of 3.1 percent in June and 5.1 percent in May. The July rebound reflected strength in single-family home construction, which rose 8.3 percent, and in apartment construction, which was up 33 percent. Shares of Home Depot rose $3.88, or more than 4 percent, to $87.47 in Aug. 19 trading.

For the three months ended Aug. 3, the company earned $2.05 billion, or $1.52 per share. A year earlier it earned $1.8 billion, or $1.24 per share.

Analysts surveyed by Zacks Investment Research predicted earnings of $1.44 per share. Revenue climbed nearly 6 percent to $23.81 billion from $22.52 billion. This beat Wall Street’s forecast of $23.57 billion.

Sales at stores open at least a year, a key gauge of a retailer’s health, rose 5.8 percent.

In the U.S., the metric increased 6.4 percent.

Sales at stores open at least a year excludes results from stores recently opened or closed.

4 SEPTEMBER 2014/NORTH FULTON BUSINESS JOURNAL

Staff / Samantha M. Shal

Scotty Hendricks Jr. is an account manager for Mutual of America.

NFBJ North Fulton Business Journal North Fulton Business Journal is published monthly and is distributed to businesses throughout North Fulton County.

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NEW AND NOTEWORTHY SIGN

Continued from Page 1 The allowed maximum size of the banner signs has also increased — from 24 square feet to 32 square feet. A new addition to the banner guidelines says banner signs must be erected with supports or other means so they don’t sag or become dilapidated.

3. Exempt signs Portable signs — those which can be picked up and moved — are still prohibited in the city, unless they are considered a sidewalk or sandwich sign. These signs, typically the kind of sign restaurants write their daily specials on, are allowed as long as they meet certain requirements. The signs must be located within 10 feet of the business’ entrance and must be on the sidewalk, while not obstructing pedestrians. The maximum height for these signs is four feet, and the entire sign cannot exceed eight square feet or contain electronic copy. Sandwich signs are not included in the total number of signs a business is allowed to have. Businesses can also have balloons — up to five at two cubic feet apiece — for a maximum of two weeks following its opening or during an approved, permitted event.

4. Prohibited Though the updated sign ordinance makes new allowances for signage, it also includes new prohibited signs.

A definition has been added to the code to explain, and ban, feather signs, which are described as “lightweight plastic, fabric or other material, whether or not containing a message of any kind, attached to a single pole or staff for support and exceeding five feet in height and designed to move in the wind.” The prohibition guidelines for string lights have also been clarified, saying string lights can never be used to outline building elements, such as doors, windows, roofs or archways.

5. Grandfathered Signs that were already in place on the ground before Johns Creek formed its own sign ordinance can remain in place due to the grandfather clause in the code. In the previous version of the city’s sign ordinance, these grandfathered-in signs could not be altered at all unless they were being made to comply with all the standards listed. But, according to Kirouac, “there is a little bit of ability now under the new ordinance to alter it,” as long as its being brought to “a higher degree of conformity” with the ordinance.

F E E - H A P PY F U N

Hotels mimick airlines in adding extra costs Forget bad weather, traffic jams and kids asking, “Are we there yet?” The real headache for many travelers is a quickly-growing list of hotel surcharges, even for items they never use.

Guaranteeing two queen beds or one king bed will cost you, as will checking in early or checking out late. Don’t need the in-room safe? You’re likely still paying. And the overpriced can of soda may be the least of your issues with the hotel minibar.

Vacationers are finding it harder to anticipate the true cost of their stay, especially because many of these charges vary from hotel to hotel, even within the same chain.

Coming out of the recession, the travel industry grew fee-happy. Car rental companies charged extra for services such as electronic toll collection devices and navigation systems. And airlines gained notoriety for adding fees for checking luggage, picking seats in advance, skipping lines at security and boarding early. Hotel surcharges predate the recession, but recently properties have been catching up to the rest of the industry.

“The airlines have done a really nice job of making hotel fees and surcharges seem reasonable,” said Bjorn Hanson, a professor at New York University’s hospitality school.

This year, hotels will take in a record $2.25 billion in revenue from such add-ons, 6 percent more than in 2013 and nearly double that of a decade ago, according to a new study released Monday by Hanson.

Nearly half of the increase can be attributed to new surcharges and hotels increasing the amounts of ex-

isting fees.

Hanson said guests need to be “extra-attentive” to the fine print. Fewer and fewer services come for free. Need to check out by noon but don’t have a flight until after dinner? Hotels once stored luggage as a courtesy. Now, a growing number charge $1 or $2 per bag. Shipping something to the hotel in advance of your trip? There could be a fee for that, too. The Hyatt Regency San Antonio, which subcontracts its business center to FedEx Office, charges $10 to $25 to receive a package, depending on weight.

Some budget hotels charge $1.50 a night for inroom safes. Convincing a front desk employee to waive a fee at check-out is getting harder. Fees are more established, better disclosed and hotel employees are now trained to say no politely.

U.S. hotels last year took in $122.2 billion in room revenue, according to travel research company STR. Fees only added an extra 2 percent in revenue, but Hanson notes the majority of that money is pure profit. However, some guests are rebelling.

Royce Breckon travels frequently for his job marketing outdoor sporting equipment but refuses to spend the night at any hotel charging for Internet.

Charges typically range from $10 to $25 a night.

“You can walk into just about any coffee shop and have it for free,” Breckon said.

The American Hotel and Lodging Association said fees are common in the travel business and that its members disclose them at the time of booking.

— From wire reports

NORTH FULTON BUSINESS JOURNAL/SEPTEMBER 2014 5

WOMEN IN BUSINESS PROFILES

TRIPLE THREAT Three business women open joint location in Crabapple

From left, Melissa Dale of Hello Lovely, Mary Mayer of Cheeses and Mary and Ashley Blencoe of Blencoe and Co. opened their joint business space to the public in late August in the Braeburn Village in Crabapple at 12220 Birmingham Hwy.

STORY BY NICOLE DOW n PHOTOGRAPHY BY ERIN GRAY

Looking to expand or launch their businesses, three friends teamed up on a joint location in Crabapple, which opened last month.

Ashley Blencoe of Blencoe and Co., a photography company, and Mary Mayer of Cheeses and Mary, a cheese shop, are expanding their businesses from nearby locations in Crabapple.

Melissa Dale of Hello Lovely, a lifestyle boutique, will be opening a shop for the first time.

The trio’s space is at 12220 Birmingham Hwy., Suite 80, in the Braeburn Village commercial development.

“It’s just become a great creative home for all of us,” Blencoe said. “We all do totally different businesses, but … we really feed off of each other with our creative vibes.”

A photographer for 16 years, Blencoe said she is excited about the newness of the location and the additional room for studio space.

“Literally it opens up so many opportunities for my business to have an indoor studio,” she said.

Blencoe said she is glad the new space is so close to her old location.

“My client base is very, very established in Crabapple so I didn’t want to move away from Crabapple,” she said. “But I’m right across the street so people can still find me.”

Mayer said she also appreciates the added space the new location will provide her.

“I started my business inside the Broadwell Cottage [on Mid Broadwell Road], and I actually outgrew the space that I had in the back of the store,” she said.

In business for the past two years, Cheeses

and Mary offers more than cheese. Mayer said her business is also not like a typical cheese shop because the products she sells are locally produced, not imported.

“I like to refer to myself as an interactive local food experience,” she said.

“I support the local producers of not just cheese but honey, jam, balsamic, jellies, salt [and] cured meats. It’s just an amalgamation of mostly Georgia-grown products.”

Mayer also sells gift packages that are great for hostess, birthday or corporate presents, she said.

Dale, who has been a stay-at-home mother for the past 11 years, said she is ready to jump fulltime into entrepreneurship again. Before having her two sons, ages 11 and 5, she worked as an event planner for the city of Boynton Beach, Fla., then opened her own children’s party-planning business. A lover of boutiques, she said she hopes Hello Lovely will be a youthful, feminine shop with unique items that can’t be found everywhere else.

“Hello Lovely is going to be a boutique where I’ll carry jewelry, apparel, home accessories and gifts,” Dale said. “I put a lot of thought into everything that I choose to put into the store.”

The shop opened in last August.

OPINION Is it possible Obamacare will become a toothless beast?

S

ince the Affordable Care Act was signed into law on March 23, 2010, employers and individuals alike have been justifiably concerned about their potential exposure to noncompliance penalties [taxes] under both the employer and individual mandate. Within the past six weeks, two significant developments have arisen which have the potential to significantly David de-fang the enforcement Bottoms mechanisms under both the employer and individual mandate portions of the law.

For starters, on July 22, the Federal Court of Appeals for the D.C. Circuit ruled the text of the act does not allow for the provision of federal premium subsidies in non-state based health insurance exchanges.

This ruling is counter to the IRS’s determination that subsidies could be provided to otherwise eligible enrollees within the Federally Facilitated Marketplace — www.HealthCare.gov — being used as a default enrollment system for the 34 states, including Georgia, which declined to establish their own state-based exchanges.

On the same day, the Federal Court of

Appeals for the Virginia Circuit issued a conflicting judgment in which they validated the IRS decision to allow subsidies via the www.HealthCare. gov system. Nonetheless, these conflicting appeals court rulings will very likely lead to another Supreme Court showdown regarding the key components of the act. Despite the headlines of this and other articles, employers would be wise to know that, while higher court review is pending, subsidies will continue to flow through the www.healthcare. gov mechanism and accordingly, employer mandate penalties are still in the cards in the near term, even if not in the long-term.

While the final determination of eligibility for subsidies via www.

HealthCare.gov is significant on a number of levels, it is particularly relevant due to the fact that the oft-unrecognized trigger point for the employer mandate penalties is an employee’s receipt of a subsidy through a health insurance exchange.

In short, no subsidies … no employer penalties.

On the individual side of things and, as you likely know, part and parcel with the requirement for large employers to offer minimum value coverage at an “affordable”

price for employees is a complementary requirement “all” individuals purchase qualifying health insurance coverage lest they be exposed to an individual mandate penalty.

Less well-known is the fact the federal government has allowed for 14 approved hardship exemption categories through which an individual otherwise subject to an individual mandate penalty will be able to avoid the penalty.

Most of the hardship exemptions are fairly clear and to the point, such as having recently experienced the death of a close family member, having been a victim of domestic violence, etc.

However, the last hardship exemption category is decidedly more open-ended in that it merely requires that “you experienced another hardship in obtaining health insurance.”

Anyone expecting that there must be a clearly defined definition of “another hardship” within the balance of the government’s guidance on this point will be left disappointed.

Not only is there no definition of “another hardship,” the requirement to document said hardship is also decidedly flimsy given that the exemption form itself asks that the applying individual “please submit document if possible.”

Accordingly, documentation of eligibility for this hardship category is requested, not required.

In conclusion, there is no question that regulatory clarity on or tightening of either of these potential loopholes is possible; however, at the moment, there is at least reason to consider that Obamacare is, in many ways, quickly becoming a toothless beast.

The very law that is effectively re-ordering one-fifth of the national economy may very well lack the enforcement mechanisms needed to ensure compliance of many employers and/or virtually all individuals.

Many opponents of the law may cheer as a result of the emergence of these potential loopholes; however, they may want to hold their applause given that the long-term stability of the insurance markets are in many ways tied to the anticipated enforcement of these requirements.

Absent a stable risk pool, the insurance market itself could begin to collapse under its own weight.

David Bottoms is senior vice president of The Bottoms Group and a principal of TBX Benefit Partners.

NORTH FULTON BUSINESS JOURNAL/SEPTEMBER 2014 7

NFBJ SCENE ALPHARETTA BUSINESS ASSOCIATION

BUSINESS EXPO PHOTOGRAPHY BY ERIN GRAY

Above, from left, ABA members Drew Brannon and Keri Brooks with LGE Credit Union and Sandee Carroll with Aflac greeted visitors to the Alpharetta Business Association business expo recently. Left, from left, Tracy Stowell of American Family Insurance and John Ray with Bookeeping Express educated patrons at the ABA Business Expo about services their companies offer.

Above, Gloria Mattei, owner of Nothing Bundt Cakes, handed out samples of some of her most popular cakes at the ABA Business Expo recently. Below, Debbie Daviadoff with Berkshire Hathaway realty represented her company at the ABA Business Expo recently.

Manager of the Drake House thirft shop, Kimberly Jackson, represented The Drake House during the ABA Business Expo recently.

NFBJ SCENE Roswell

CONNECT PHOTOGRAPHY BY JAMES SWIFT

Keller Williams representatives Debra and Michael Martino enjoy themselves at the Roswell Connect event.

Dr. Judith Dennis of Roswell Urgent Care Center knows networking is good medicine.

Roswell’s Von Gatwood was among the many getting the word out about local small businesses.

Above, from left, Musical Therapy Services of Atlanta owner Beth Hampshire has a blast alongside pal Christine Zollinger. Below, Roswell Inc. Executive Director Steve Stroud, left, chats it up with Roswell Director of Transportation Steve Acenbrak.

Roswell Inc.’s Darrell Weaver was one of the organizations many representatives in attendance.

Keller Williams realtor Steven Scarbrough was one of the many real estate representatives present.

NAMES IN THE NEWS

Thurmond advocates ‘enlightened self-interest’ economics

By James Swift jswift@northfultonbiz.com

DeKalb County School District Superintendent Michael Thurmond recalled visiting a job networking event at the height of the Great Recession.

“It was a room full of men and women who had great educational backgrounds, who had great work ethics, who had done everything right,” he said.

“But they had found themselves unemployed and unable to find work.”

The moment, he said, got him thinking about how much a community — or a state, or even a nation — was willing to share its “blessings” with the less fortunate.

Thurmond was the guest speaker at a Greater North Fulton Chamber of Commerce event held in Roswell on Aug. 26.

A former U.S. Senate hopeful, he has had a prolific and diverse career. A lawyer and former state representative, he has also served as the state’s labor commissioner and the head of Georgia’s Division of Family and Children

Services.

Harkening back to Tocqueville’s “Democracy in America,” Thurmond brought up the concept of enlightened selfinterest. By helping others, he said, individuals ultimately end up helping themselves.

“The for-profit sectors and nonprofit sectors must work together to ensure that the opportunity to grow and prosper in this state and nation actually is widespread and available to all,” he said. “If you are a business owner, and you are generating profits … it’s in your best interest to make sure every child in Fulton County gets a quality education.”

The key to successful leadership, he said, was to abstain from focusing on deficits as a top priority. It’s a lesson he said he quickly learned upon accepting his current position.

“I looked at DeKalb, and we were $14 million in debt, academics were in the pits and the government was getting ready to remove six board members,” he recalled. “Other than that, things were in pretty good shape.”

He said the pivotal first step he

took was an inventory of assets.

“If you do that first, your deficits will shrink in significance.”

Stepping outside of one’s “comfort zone” was also a necessity, Thurmond said.

“Your comfort zones are your markets,” he said. “There are very few business owners who will resist generating more profits simply because it’s in a comfort zone that they may not have discovered yet.”

He concluded by describing his lifelong political vision and “unending prayer” for true community solidarity.

“We’ll live in one Fulton, one DeKalb, one Georgia,” he said.

“And one America that will offer liberty, justice and economic opportunity for all.”

The road to job creation and improved quality of life, he said, wasn’t an easy path to take, however.

“You’re going to have to venture across railroad tracks, political divides, emotional barriers and psychological obstructions,” he said. “We are all going to have to sit down at the table of brotherhood.”

Staff / Katherine Frye

DeKalb County School District Superintendent Michael Thurmond, pictured above, discussed the private sector’s community role at a recent Greater North Fulton Chamber of Commerce event.

Martin leaves Newell Rubbermaid after 27 years From Staff Reports Sandy Springs-based Newell Rubbermaid announced recently Doug Martin, executive vice president/chief financial officer, resigned from the company, effective Aug. 31, to accept a senior leadership position with another company.

Newell Rubbermaid has retained Spencer Stuart to help identify a new chief financial officer. While that search is underway, John Stipancich, the company’s executive vice president, general counsel and corporate secretary, has been named the company’s interim CFO. “On behalf of the board of directors and the entire company, I want to thank Doug for his invaluable contributions and leadership over 27 years of service with Newell Rubbermaid. During the last two years as chief financial officer, Doug has been instrumental in driving the Growth Game Plan into action.

“I know Doug and his family are excited by returning home to their

10 SEPTEMBER 2014/NORTH FULTON BUSINESS JOURNAL

extended family in the Midwest, and I wish him continued success in his future endeavors.

“Doug leaves us with an experienced financial team that will ensure a seamless transition while we search for a successor,” said Michael Polk, president/chief executive officer.

Stipancich, a 10-year veteran of Newell Rubbermaid, is a member of the company’s executive leadership team.

He has operating responsibility for the company’s business operations in Europe, the Middle East and Africa, and the company’s global legal functions.

Prior to joining Newell Rubbermaid, he held executive positions with Evenflo Co. Inc. and Borden Inc., both former Kohlberg Kravis Roberts & Co. portfolio companies.

He started his legal career as an associate with the international law firm of Squire Patton Boggs.

Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2013 sales of $5.7 billion.

NEW AND NOTEWORTHY

Center for Advanced Medicine opens in Johns Creek From Staff Reports The Center for Advanced Medicine announced recently its integrative medicine practice is accepting new patients.

Located in Johns Creek, The Center for Advanced Medicine offers state-ofthe-art health care while focusing on natural therapies.

“Our practice is unlike any other practice you will find. We are truly patient-centered, and we get results,” said Jonathan D. Stegall, M.D., the practice founder and lead physician.

“We spend the entire appointment discussing the issues that are important to the patient. Then, I conduct a targeted physical exam and obtain pertinent lab testing. I carefully review all of this information, and develop a specific protocol for each patient.”

Stegall, who is conventionally trained in internal medicine, said he grew frustrated with the “cookiecutter approach” used in most medical practices and hospitals.

“Most doctors are accustomed to treating every patient the same way.

They make patients wait, then rush through the visit, hurriedly prescribe some drugs, and call it a day,” he said, noting that this approach to chronic disease is failing patients.

“I spend a lot of time reviewing each patient’s information and tailoring a protocol just for them. Treatment may include dietary supplements, bioidentical hormone replacement therapy, intravenous nutrition, dietary changes, lifestyle modification and anti-aging treatments.” Stegall said.

Dr. Stegall completed his residency in internal medicine through the Yale University School of Medicine after obtaining his M.D. from the Medical University of South Carolina.

He also has master’s degree in physiology from Georgetown University and conducted research on the doctor-patient relationship at Harvard Medical School.

In addition, Stegall completed a fellowship in integrative, anti-aging, and functional medicine through the American Academy of Anti-Aging Medicine.

He is board certified.

Business Buzz

Youfit opens in Sandy Springs

Deerfield Beach, Fla.-based Youfit Health Clubs recently opened a location in Sandy Springs at 8725 Roswell Road.

It is the company’s eighth metro Atlanta club and its 74th overall, making it one of the fastestgrowing fitness businesses in America.

The company is now scouting additional locations in north Georgia.

Information: www.youfit.com

J. Christopher’s honors veterans

J. Christopher’s, which has several locations in north Fulton, will give a 50 percent discount on the 11th of every month to veterans and one guest showing a valid ID. “We are avid supporters of our military troops, active and veterans, and we do our very best to honor those who have served, and are serving our country,” said Jeff McCann, co-owner of J. Christopher’s.

Military, fire/police personnel and a guest can also receive 50 percent off of their meal when they show valid ID.

Cousins Properties

to purchase Northpark Town Center Downtown Atlanta-based Cousins Properties Inc. earlier this month announced it will purchase the Northpark Town Center office complex in Sandy Springs from AEW Capital Management/Bank of Ireland for $348 million.

According to a news release, Northpark is a 1.5 million-square-foot, Class A complex in the heart of the central Perimeter market. It has 87 percent occupancy with in-place rents below market. Cousins’ leasing team has already secured an executed letter of intent for 68,000 square feet. The deal is expected to close Oct. 1.

The transaction was one of several the company is participating in as part of its strategic portfolio repositioning plan.

During a 10-day period starting in late July, Cousins signed definitive agreements to acquire Northpark and the Fifth Third Center in Charlotte, N.C., a 698,000-squarefoot office tower under contract for $215 million. These acquisitions will be funded with proceeds from the company’s recently completed common equity offering and the anticipated sale or joint venture of certain assets.

NORTH FULTON BUSINESS JOURNAL/SEPTEMBER 2014 11

RIBBON CUTTINGS

Special Photo

Staff / Erin Gray

REOPENING: A ribbon cutting and grand re-opening was held last week for the apartment community at Nesbit Palisades, formerly Jasmine at Holcomb Bridge.

Pictured from left are Fergal Brady, treasurer and chairman elect for 2015 Alpharetta Chamber of Commerce; Roswell Mayor Jere Wood; Scarlett Sparkman, resource residential district manager, Lisa Allgood, resource residential regional vice president of the Southeast along with representatives from Resource Residential and Roswell Inc.

ON THE FARM: Chukkar Farms Polo Field and members of the North Fulton Chamber of Commerce as well as state senator Brandon Beech held a ribbon-cutting at the farm’s outdoor venue facility to celebrate their new upcoming series TGIF Concerts.

Special Photo

Special Photos

DA VINCI’S: Officials from the city of Roswell and Roswell Inc. were among those attending a recent ribbon-cutting for DaVinci’s, a new Italian restaurant at 2500 Old Alabama Road in Roswell.

GROUNDBREAKING: Fiserv Inc., a leading global provider of financial services technology solutions, began the move to a new location for its Atlanta-area operations with a groundbreaking celebration last week. The company has signed a lease for adjacent buildings located at 2900 and 2950 Westside Parkway in Alpharetta. Associates are expected to begin working at the new location beginning in 2015. From left, breaking ground are Chris Carr, commissioner of the Georgia Department of Economic Development, Jeff Yabuki, president and CEO, Fiserv, Gov. Nathan Deal and David Belle Isle, mayor of Alpharetta.

30TH ANNIVERSARY: Brandon Beach and members of the Greater North Fulton Chamber of Commerce celebrate the 30th anniversary of Howe and Associates with Karl Howe, founder, Richard Howe, managing partner, Johns Creek Mayor Mike Bodker, and Fulton County Commissioner Liz Hausmann.

Do you have photos from your ribboncutting or groundbreaking ceremony?

Send them to us at: businessnews @northfultonbiz.com

A LOOK AHEAD

WHAT’S NEXT FOR DOWNTOWN ROSWELL? Development authority eyes hotels, grocers and walkable housing

By James Swift jswift@northfultonbiz.com

Members of the city’s Downtown Development Authority said they envision big things happening throughout the next half-decade. However, they are also quick to point out several potential developmental constraints in present-day Roswell.

Authority chair Monica Hagewood led a discussion about the city’s short-term future at an authority meeting in August.

“We know the collective vision,” she said, “but where do we see the downtown market in 2020?”

The list of wants discussed by the authority included hotels, grocers and walkable housing.

“I think we need more office space,” said authority secretary and Sunbelt Business Brokers senior broker David Lyon. “It would have more people working in Roswell as opposed to the restaurant scene, where people are driving in and driving back out … we want feet on the streets.”

Mimms Enterprise CEO Lonnie Mimms mentioned the city’s new Unified Development Code, which took effect in June.

“Within the new code, most things still have to get approved,” he said. “Most things are still conditional, so it’s a matter of finding alignment between what the city council is looking for and

what is needed to help them achieve that.”

The authority, Mimms said, was figuring out the code — and its impact on development — as they went along.

“There hasn’t been a whole lot of projects that have been brought up under the new code,” he said. “We’re all in a little bit of an unexplored territory right now.”

The city’s infrastructure and connectivity were additional concerns. A big question mark at the present, he said, was how Canton Street could be connected to the Square.

“How do you make the whole stretch walkable in some fashion?” he said. Lyon seconded the desire to make Roswell more pedestrian-friendly.

“It’s easier in the Roswell center, for example the Canton Street area,” he said. “As we get into the suburbs, it becomes more difficult.”

Another barrier, Lyon said, were the sizes and prices of downtown parcels. However, he said the authority can play a role in resolving the issue.

“We can possibly assist in the assemblage of land,” he said, “to make it viable for a developer to come in.”

Whatever shape the downtown area takes six years from now, authority members seem to agree private-public partnerships will play prominent roles in paving the path to 2020.

Staff / James Swift

At a Downtown Development Authority meeting last month, chair Monica Hagewood led a discussion about the future of Roswell’s downtown area.

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NEW AND NOTEWORTHY

Former engineer makes imprint as entrepreneur

By Nicole Dow ndow@northfultonbiz.com

It was a chance meeting on an airplane that changed the course of Anna Shmukler’s life.

The north Fulton resident had spent the past three decades of her life working as a transportation engineer before sharing a flight with an Instant Imprints franchisee and deciding to buy into the franchise. On June 1, Shmukler became the owner of the Roswell store in the Holcomb Place shopping center, which creates promotional items like T-shirts, mugs, banners and signs.

“It just felt so right,” she said about her career transition at age 58. “I’m the happiest person in the world.”

Though Shmukler said she did enjoy her career as a transportation engineer, the economic downfall had

made things hard for her.

In 2010, she had to close the engineering company — Transportation Systems Design — which she had started in 1992.

“2008 was a really tough year,” she said.

“The economy was going down, private developers were stopping all the work and the Georgia Department of Transportation decided to stop a lot of projects. We lost over-a-million-dollar projects just because they were cancelled.”

In her new business pursuit, Shmukler is able to make good use of the management skills she acquired while running her engineering company.

She said there are other connections between her former career and her current one.

“People may think what does embroidery or printing have to do with engineering, but it takes this

kind of engineering mind to understand design and how colors work together and how you put things in certain proportions,” Shmukler said.

She said she enjoys serving the north Fulton community.

Though she is a Johns Creek resident, she lives close to the Roswell border.

“I have people coming in from schools, from different teams [and] from local businesses,” Shmukler said. “They’re all looking for some support.”

Since taking new ownership of the Roswell shop, which was previously corporately owned and operated, Shmukler has moved the store’s location to a larger, renovated suite a few doors down in the same shopping center at the corner of Old Alabama and Holcomb Bridge roads.

She said business has been growing, but there is still room for more growth.

Welcome to the

Staff / Erin Gray

Anna Shmukler recently made a complete career transition at age 58 — after working 30 years as a transportation engineer — to become an owner of an Instant Imprints franchise in Roswell.

Staff / Erin Gray

Roswell resident Patty Sledge is a business woman who specializes in beaded embroidery.

The North Fulton Business Journal covers the pulse of North Fulton County’s vibrant business community. The monthly publication will highlight news, events and individuals that are unique to North Fulton’s business community. Put your company and products in front of North Fulton’s CEO’s, executives, partners and leaders.

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14 SEPTEMBER 2014/NORTH FULTON BUSINESS JOURNAL

Local business a hit with young professionals

By James Swift jswift@northfultonbiz.com

For Patty Sledge, beaded embroidery is not just a hobby — it’s a way of life.

“It’s my creative outlet, it’s my therapy and it just makes me really, really happy,” she said.

A BPI Group project manager by day, she credits her paternal grandmother for inspiring her interest in crafting.

“She was always learning something new and every time I would go and spend time with her, she would teach me a new craft,” she said.

“When I found the beadwork, that was it.”

Her preferred studio is her “happy place,” a cabin nestled deep in the mountains of Ellijay.

Often accompanied by her poodles, she said the sounds of nature greatly inspire her.

In 2000, Sledge started her own business, Bead All You Can Bead. Her artwork is also

featured at the Topaz Gallery in Buckhead.

Professional women eyeing unique pieces for social events are her biggest customers.

“The earrings sell really well and the custom pieces actually do pretty well, too,” she said. “Each year, I’ve gotten more and more revenue.”

Every year, Sledge attends several arts festivals to promote her brand. Her next stops will be at the Sandy Springs Festival in September and Houston’s Bayou City Art Festival in October.

Earlier this year, Sledge was invited to an online competition that pitted her against the world’s top bead artists.

As one of 256 worldwide contestants in the 2014 Battle of the Beadsmith, Sledge spent two months working on her entry — a purse inspired by the popular “Fifty Shades of Grey” series.

BUSINESS ADVANTAGE

THE STADIUM BIDDING BEGINS Braves builders welcome local companies

BY RICKY LEROUX Hundreds of representatives from vendors, subcontractors and suppliers filled an auditorium in Austell recently to learn how to contribute to the construction of the new Atlanta Braves stadium.

American Builders 2017, the joint venture of four firms selected to oversee construction of the stadium, organized the first of its business outreach seminars at the Riverside Epicenter to help inform local companies about the opportunities available in the $672 million project.

Len Moser, project director for American Builders 2017, said the seminar is one of two the company plans on holding.

“Tonight is our first outreach event. It’s really — the main purpose is an information download. So, anyone from subcontractors, vendors [and] suppliers local to the area, and also minority- and womenowned business enterprises, [can] come learn how to get involved, what our schedule is, when bid packages will be coming out

[and how to connect] to our website, Americanbuilders2017. com,” he said.

The program, which lasted about 45 minutes, introduced attendees to American Builders 2017, described the project and the upcoming timeline for bidders and encouraged local companies to pursue the opportunity, even if their size may prevent them from taking on large portions.

After the presentation was over, the crowd of representatives filled the hallway outside the auditorium. Some were dressed in suits, others in polo shirts with their company’s names on them.

One woman who worked for a company that sells reflective safety clothing for construction workers was decked out in a bright yellow vest.

The attendees mingled, which Moser said was another goal of the seminar — networking. He said large companies will likely receive bids because of the project’s scope, but they must also have a local connection.

So, smaller companies are encouraged to apply to help larger firms fulfill the requirement, he said.

“We’re doing what we call ‘best value selection.’ So price is included. We’re asking for local involvement. If you’re not a local firm, can you bring someone to your team that’s local to the area?”

Moser said his company has already awarded bids for the excavation package, which included the building of permanent retaining walls on the site made of rock and earth.

The next round of bidding will include mechanical, plumbing, electrical and technology services and is expected to open around Labor Day, he said.

In mid-September, bids will open for a package that will include work on the stadium’s concrete foundations. Around the end of the year, a bid package including structural steel work, glass and glazing services and Staff / C.B. Schmelter the all-important playing field Subcontractors and suppliers were recently in attendance at the Rivwill open. erside EpiCenter for a meeting with American Builders.

Stores report solid start to back-to-school season Anne D’innocenzio Associated Press Writer

The back-to-school shopping season is off to a promising start, but retailers may be sacrificing profit for sales.

The National Retail Federation expects the average family with school-aged children to spend $669.28 for back-to-school items, up 5 percent from last year.

That would be the second-highest amount since the industry trade group started tracking spending in 2004.

But major retailers such as Wal-Mart and Macy’s are discounting merchandise and increasing spending to upgrade their stores and websites to grab the attention of U.S. shoppers during the second biggest shopping period of the year.

All that discounting and investing has worked to start the season off strong, they said, but it also hurts their bottom lines.

“Stores are going to have to invest in price and e-commerce aggressively in order to be competitive,” said Ken Perkins, president of RetailMetrics LLC, a retail research firm.

“The pie is not growing, and they’ve got to do everything they can to keep them from losing market share.”

Wal-Mart, the world’s largest retailer, said it’s been investing in several ways to attract shoppers this season.

The company cut prices on 10 percent more back-to-school items compared with last year.

The company has also made some long-term investments.

Wal-Mart said earlier this year it plans to open 270 to 300 small stores during the current fiscal year — double its initial forecast— to compete with dollar chains.

“In an environment where customers have so many choices about where to shop and how to buy — and many of them are feeling pressure on their budgets — we have to be at our best,” said Wal-Mart’s CEO Doug McMillon.

But all that investing has hurt its results. On Thursday, Wal-Mart reported that its profit in the latest quarter was virtually flat during the latest quarter.

Kohl’s Corp. also reported flat profits in its latest fiscal quarter on Thursday, as it cut prices, revamped its beauty departments and spent on services such as one that enables it to ship online orders directly to shoppers from its stores.

The department-store operator also has started to roll out a loyalty program where shoppers get one point for every dollar they spend, with them receiving a $5 reward for every 100 points.

The retailer said it is hopeful its moves will boost business during the back-to-school shopping season. Kohl’s said that in July it had its first gain in revenue at established stores in several months.

“I believe our customers will be excited by the newness that they find in our stores and when shopping online this fall,” Kohl’s CEO Kevin Mansell told investors recently.

Still, Mansell said the period is not a predictor of how shoppers will spend during the winter holiday shopping season in November and December, which traditionally is the biggest shopping period of the year. “Last year, we had a really good back-to-school business and then business died mid-September,” he said.

For its part, Macy’s Inc., which owns Macy’s and upscale Bloomingdales chains, reported recently that its profit and sales for its latest quarter missed Wall Street estimates because it did so much discounting of merchandise.

NORTH FULTON BUSINESS JOURNAL/SEPTEMBER 2014 15