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COOKING WITH GAS

Kitchen Stock brings in-line discipline to specialty leasing

By Susan Thorne

By offering kitchenware, Kitchen Stock has broken new ground in specialty leasing.

Specialty tenants might not be full-time mall participants, but that doesn’t mean they can’t aspire to the professionalism and high operating standards of longer-term, in-line retailers.

Kitchen Stock, a seasonal retailer of cooking tools and accessories, is one temporary tenant that keeps all its knives sharpened. The company has not only broken new ground with its merchandise (kitchenware has been largely overlooked in the specialty-tenant field), but it is also innovative in adopting techniques such as mystery shopping and a year-round, toll-free customer-service line.

Scrupulous attention to all aspects of operations has helped to generate impressive growth. Launched with two locations in 1998 by Bev Durvin, its president, Kitchen Stock this past Christmas fielded kiosks in 41 Canadian malls and four U.S. centers — Tacoma (Wash.) Mall; Northgate Mall, Seattle; Bend (Ore.) River Mall; and Columbia Center, Kennewick, Wash. — and for this year’s season, it plans to be in 80 locations. About half of these could be in the United States, in centers serving small communities and larger urban populations from the Midwest to the West Coast.

All operators must attend Kitchen Stock University, an annual two-day training and professional-development program led by Durvin at a retreat; last year the location was an Alberta, Canada, ranch. Instruction covers company management systems, policies and procedures, plus the basics of front-line retail, including everything from customer-service pointers — greeting and making eye contact with shoppers — to what dollar denominations to have in the cash register.

Operators are independent contractors who not only agree to take the course, but are bound by contract to operate a kiosk for a set period of time.

Durvin warns her operators to be ready for all kinds of challenges, drawing a parallel with skiing moguls.

“I always tell them, ‘Keep your knees loose, guys, because we’re going to have a curve where you thought it was straight!’” Durvin said.

Seasonal retailing calls for a high degree of preparedness because of the intense level of sales activity in a short period.

“You need adrenaline and drive in this business,” Durvin said. “You know, we set up everything every year, including features like telephone and bank-card hookups.” Online retailers only have to do this once, she observed.

Durvin uses secret shoppers to monitor customer-service quality at every kiosk, every year. She points out that seasonal retailers need to work harder to win shoppers’ trust.

“There may be reluctance to buy from a retailer who will be gone after January,” she noted. Kitchen Stock nurtures customer confidence with a high standard of merchandise quality and presentation, and by keeping channels open even when the kiosk has left the mall. With every purchase, a bright, neon-colored “Don’t Worry” card is given out displaying the message, “Even though Kitchen Stock is a seasonal shopping adventure for you, we are available to help all year.” A toll-free number is provided, and the cashier urges customers to call with questions or complaints.

“And they do — all year long,” Durvin said. “Mostly, they ask about using products better or in more diverse ways, or there may be a faulty item, which we either replace or reimburse them for.”

Durvin used to own Benkris, a small chain of kitchenware stores in Alberta, which gained her 20 years of experience in shopping center retailing. Among other citations, she received an Innovative Retailer of the Year award from the Retail Council of Canada in 1993. However, cookware shops are becoming less common among in-line shopping center retailers; the high number of different items required for a full-line store makes inventory costs high, Durvin said, and has caused many independent operators to abandon the field. Her own chain went out of business in 1997. She launched Turner Valley, Alberta-based Kitchen Stock with partner Ron Pelachuk.

The concept for this seasonal cookware operation arose naturally from Durvin’s background but also fits well with the popularity of baking and entertaining in the final weeks of the calendar year. Kitchen Stock offers 600 stockkeeping units of fine kitchenware items on eight spinning fixtures in a 10-foot-by-15-foot kiosk. The inventory includes everything from oven mitts and aprons to such highly specialized accoutrements as shrimp deveiners and sushi-making tools.

The company’s rapid expansion has created heavy demands on its head office but has paid off.

“It’s been quite a wild year, but we’ve survived and been profitable,” Durvin reflected. Last year, the top-grossing Kitchen Stock location averaged C$1,500 ($938) in sales per day and C$146,500 in an 11-week period. “Not bad for 150 square feet!” Durvin observed.

Everything from oven mitts to shrimp deveiners, from aprons to spoons.

In addition to leading Kitchen Stock University, Durvin has endeavored to simplify the operator’s job by streamlining kiosk design, creating an easy-to-move mobile cart, and pre-racking merchandise and attaching signage to minimize setup time; she estimates that initial setup can be done in as little as three and a half hours. The head office maintains a 20-hour-a-day help line to assist kiosk operators with problems and queries, large and small.

“We may get a call from an operator saying, ‘Quick, where are the basting brushes?’ and I’ll say, ‘Well, they’re on the third spinning display on the left,’” Durvin said.

A 16-page survey goes out to all operators yearly to solicit feedback and identify areas needing improvement.

“We really have two customers: The consumer, of course, but also our operators,” she said. “We’ve evolved already, and we really do try to be better.” Kitchen Stock boasts a high rate of operator satisfaction; only five of the cohort of 40 from 2000 did not return this season.

So far as the “other” customer — the shopper — is concerned, Kitchen Stock’s target demographic group is between 30 and 65 years old, and 70 percent of the customers are female. Kiosk locations generally must be in enclosed shopping centers in communities with a population base of 50,000 or more inhabitants whose average household income exceeds C$50,000.

In addition to its own continuous improvement efforts, Kitchen Stock has the advantage of being in the right place at the right time, given recent trends.

Kitchen Stock works with leading mall companies in Canada, such as Ivanhoe-Cambridge Cadillac Fairview and 20 Vic Management, among others.

Suzanne Cayley, director of specialty leasing for Ivanhoe-Cambridge, Toronto, has high praise for Durvin’s abilities as a shopping center tenant and retailer, citing her strong background in the industry as a key factor. Cayley noted that Durvin is skilled in tailoring products to different customer markets and is very hands-on in working with operators; as well, she said, Kitchen Stock gives quick and positive feedback on any concerns mall management has.

“She has an amazing understanding of what our needs are — of what shopping center developers and managers need,” Cayley said. “She is a pure pleasure to deal with.” Ivanhoe-Cambridge is so bullish on Kitchen Stock that the developer in September sponsored a presentation by its own staff at Kitchen Stock University.

With December 2001 under her belt, Durvin is ready for more action and said she is busy planning her coming expansion.

“We’re looking for the right path in the U.S., testing smaller urban centers with 100,000 inhabitants as well as larger ones to see where our growth should be,” she said.

She is also looking to see if Kitchen Stock could be open at other times of the year. One way it will be open year-round is through its recently launched online shopping site. The benefits of this will be shared with operators, who will be reimbursed for sales originating with their customers.

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