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SNAPSHOT HOTSHOT

Archiver’s thrives on America’s passion for photo albums

BY KAREN M. KROLL

Personal photographs are precious commodities indeed.

“They’re what people return to burning buildings to get,” said Brian Olmstead, senior vice president of Archiver’s — “the photo memory store,” as the chain bills itself.

The organizing of personal photos into elaborate scrapbooks, which is especially popular among mothers and teen-age girls, has become a multibillion-dollar business for U.S. crafts retailers. Currently, some 100,000 stores cater to these consumers.

Minnetonka, Minn.-based Archiver’s is doing its best to capitalize on this interest. Archiver’s, today a 28-unit chain, began as the brainchild of three executives of Proex Photo & Portrait, a 33-store regional division of Beltsville, Md.-based Ritz Camera Centers in the Twin Cities.

While working for Proex, Olmstead, Bruce Thomson and Jann Olsten (At Proex they were, respectively, vice president of marketing, president and vice president) saw that though people love their photos, they rarely know how to store them. The three watched as the scrapbooking segment of the craft industry took off. By 2002, the scrapbooking market had zoomed to $2 billion in sales from a mere $200 million in 1996, says Donald Meyer, a spokesman for the Craft & Hobby Association, Elmwood Park, N.J. Last year scrapbooking grew by an additional 25 percent to $2.5 billion.

The men left Proex in 1998 and opened their first Archiver’s store the following year. Thomson is chairman of Archiver’s and Olsten is president.

Today Archiver’s stores are scattered from Colorado to Ohio to Georgia, with the heaviest concentration in Minnesota and Illinois.

Both this year and next, management plans to add about 15 stores. In 2004 the chain opened several stores in Ohio, as well as others in St. Louis and Kansas City, Mo. For 2005, management says it is looking at sites in Salt Lake City and Phoenix.

Archiver’s also plans to fill in markets where they currently have a presence, says Olmstead. The Twin Cities, which has six Archiver’s, could accommodate one more, he says. Similarly, there are six Archiver’s in the Chicago area, and the chain expects to have 10 there eventually.

The venues include strip centers, regional malls and lifestyle centers.

Busy draw, solid sales
Archiver’s stores are a draw, says John Bacon, a spokesman for RED Development, based in Kansas City, Mo., and Scottsdale, Ariz. Three RED lifestyle centers — in Kansas City, Mo., Middleton, Wis., and Omaha, Neb. — feature an Archiver’s.

“During grand openings, they’re one of the busiest stores, with standing room only,” Bacon said. “They attract the type of demographic we want — female shoppers with good income.”

Archiver’s stores are drawing customers and capturing sales, says Hans Rasmussen, Archiver’s director of real estate, though he wouldn’t release the private company’s sales figures. Bacon would say only that the stores are “doing solid business, and we want to do more deals with them.” He declined to reveal their sales per square foot.

“We’re fortunate in that a number of arenas work,” Rasmussen said. Units in or near regional centers seem to be the best fit, however. “Because we’re a destination retailer, we draw from very large areas.”

Archiver’s stores average 7,000 square feet and carry some 15,000 products from 150 vendors, ranging from 19-cent stickers to $100 photo albums. The company also has a handful of proprietary products, such as calendars and a line of photo albums.

All stores have a workroom furnished with large desks that shoppers can use free of charge to assemble their photo albums. In a separate store “classroom,” employees show customers how to arrange scrapbooks or create custom wedding invitations.

The fixtures are wood and custom-made, says Olmstead, and the walls are painted in muted tones of sage and rust.

“They almost look like the Barnes & Nobles model, with a comfortable layout of materials and different lighting,” said the crafts association’s Meyer. The decor distinguishes Archiver’s from most craft stores, which use fluorescent lighting and cardboard box displays, he explains. “They make the experience pleasant, so people spend more money.”

“It’s all about a sense of being part of a group, a community and sharing ideas,” said Tom Van Hercke, president of nParallel, a Minneapolis-based branding consultant firm.

The customer base tends to be middle-to-slightly-upper-income, Olmstead says, though he would not cite figures, and represents a number of demographic groups. About 65 percent are family women, and an additional 10 to 15 percent are teen girls. The stores also attract photographers, professional and amateur.

It looks like consumer interest in scrapbooking is here to stay, says Patricia A. McHenry, a principal at the Denver office of commercial real estate services firm Trammell Crow Co. “Even though people are busy, they’ve put a priority on home, family and aesthetics,” she said. “They won’t go back.”

There are about 4,000 independent photo and scrapbooking stores serving an estimated 25 million U.S. scrapbookers, Meyer says. But there are a lot of indirect competitors, too. “Between Costco, Staples, Office Depot and others, everyone is adding eight, 10 or 15 square feet [of scrapbooking products] to their mixes,” said Olmstead. If these are included, the number of stores selling scrapbooking supplies rises to about 10,000.

One source of direct competition is ReCollections, a division of $3 billion (revenue) crafts retailer Michaels that launched last year. The company’s Web site currently lists four stores in Arizona, Maryland and Texas. ReCollections, which carries about 10,000 items, offers workrooms and classrooms just as Archiver’s does.

To date, Archiver’s has eschewed television and newspaper ads, says Olmstead, because it operates only one or two stores in some markets. Instead, it prefers to use direct-marketing techniques. In addition to buying customer lists, the company mails newsletters and information about store openings, sales, classes and the like. Olmstead would not disclose the number of names in the customer database.

So far, Archiver’s remains a strictly brick-and-mortar operation. The company does have a Web site (archiversonline.com), but it does not sell online. “Right now we’re putting our efforts into retail real estate,” said Olmstead.

Minneapolis-based Winmark Corp., developer of the Play It Again Sports and Once Upon a Child retail concepts, owns about one-fifth of Archiver’s, which has gone through several rounds of private financing to fund growth, says Olmstead.

Management says it could have about 60 stores up by the end of 2006. Ultimately, said Olmstead, “there may be room for 200 stores.”