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APRICOT LANE FRANCHISERS ESCHEW CONFORMITY

By Kimberly Tchang

By and large, franchisers follow a simple philosophy: Find a formula that works, and then make all your franchisees stick to it. No such slavish conformity at Apricot Lane. This apparel retailer has 45 franchised boutiques — each with a decidedly singular character. “We're not like Burger King,” said Ken Petersen, CEO of Vacaville, Calif.–based Country Visions, Apricot Lane's parent. “The product mix isn't the same in every store.” Each unit has the feel of an exclusive, independent specialty shop, and that is exactly what customers love, Petersen says.

About 90 percent of Apricot Lane's merchandise is fashion and accessories. Gift and home decor items account for the rest. The stores share in common their name and an assortment of branded apparel lines, including Free People, Lucky Brand, and Paper Denim & Cloth. The chain appeals to teens and mature women alike, and the average sale comes to about $40.

Those recognizable brand names are equally important to shopping center landlords. Last fall lifestyle center developer Poag & McEwen welcomed its first Apricot Lane store, at its Promenade Shops at Evergreen Walk, in South Windsor, Conn., just outside Hartford. “We thought Apricot Lane showed great promise,” said Maureen O'Connor, Poag & McEwen's vice president of marketing. “They carry a number of lines that department stores usually carry, and because we don't have any department store anchors, we thought it would be good to add some of what other centers are able to offer.”

Apricot Lane is Country Visions' second franchise venture. The first, Country Clutter, which was established in 1991 and now operates 12 stores, focuses on home decor and gifts. Apricot Lane launched two years ago as an apparel spin-off, but quickly became the dominant concept. That is simply where the franchisee interest has been, says Petersen.

“Our demand is going through the roof,” Petersen said. Country Visions processes about 200 franchisee leads per month. The company handles the initial store purchase and layout. After that, the franchisee decides what works. Certain branded items are sold across the chain, but franchisees are otherwise free to bring in other items at their own discretion. “We don't buy for the stores, but we negotiate trend-right merchandise, and we communicate that to our stores,” Petersen said. “And when we negotiate a buy, we leverage the entire chain toward that buy, even if a particular store doesn't buy in.”

A flexible franchise operation is unusual enough. A franchised apparel retailer is all but unheard of. One reason Apricot Lane works is that its corporate buyers and franchisees are constantly monitoring local and regional trends and sharing information about what is selling at individual locations, says Petersen. “We can react very quickly to a new fad or fashion trend, with the buying decisions being made at the store level,” he said.

Analysts say Apricot Lane represents a return of sorts to independent retailing at a time when local stores have lost out to the mega-chains. “Apricot Lane is an interesting next chapter in that third space between nationwide chains and independents,” said Ken Nish, chairman of JGA, a Southfield, Mich.–based retail consulting firm. “Now that we've pretty much killed the ability for the independent [retailer] to operate — through real estate and distribution issues, purchasing and overhead — a franchise becomes the best of both worlds: You've got the purchasing power that gives you access to name brands and the franchiser systems support, but you've also got an entrepreneur behind the counter who knows their neighbors and knows the community.”

The independent boutique feel is partly what made Apricot Lane a good fit at Alamo Quarry Market, a specialty retail and entertainment complex in San Antonio, says Jennifer Hargis, an associate at San Antonio–based Reata Real Estate Services, which handles leasing for the center. “The Quarry landlord had been looking for new tenants that have that national look but that are more local,” she said. “The landlord was confident in the Apricot Lane franchisee — she's local, she's very trendy, and she knew exactly what she wanted to carry in her store. We're hoping to get Apricot Lane into some other centers that we lease. We love that accessories niche, and they attract a pretty broad customer base.”

Though most Apricot Lane stores are moderately priced, some are upscale, in reflection of their communities. The shop at Two Congress Park Centre, a mixed-use urban development in downtown Saratoga Springs, N.Y., is among the latter. “This is a higher-end market with an affluent tourist trade, and it's a fairly sophisticated little city,” said Deane Pfeil, vice president of Saratoga Springs–based J.W. Pfeil & Co., leasing agent for the development. “Apricot Lane really helped the franchisees put their own stamp on the store and tailor their merchandise to this market.”

Apricot Lane stores measure about 1,500 square feet. So far the concept has done well in a variety of retail settings: lifestyle centers, regional malls, open-air centers and tourist destinations. “If we were rolling out corporate stores, we probably wouldn't put one into a strip center in, say, Brentwood, Tennessee,” said Petersen. “But with marketing and promotions, and with a franchisee who's connected and knows everyone in the community, I can make a strip center work.”

Creative marketing is one Apricot Lane specialty, and the company is known for its in-store fashion parties. “I don't know why more retailers aren't doing that,” said Petersen. “We'll bring 40 to 50 women in, serve hors d'oeuvres and drinks, have raffles, offer discounts to the attendees, and then we book additional parties off of those, and it just factors from there.”

Apricot Lane says it plans to open about 30 units this year and to maintain that pace going forward, up substantially from the 14 stores it launched last year. But “I'm not looking to put an Apricot Lane on every street corner,” Petersen said. “We want to do one thing very well, and quality is very important to us.”