If your company is struggling with the pendulum swings of the seasons, you may want to rethink your strategy altogether. Calendar Club, in Austin, Tex., opens its doors just three months of the year during the Christmas season. "Many retailers struggle to break even or lose money during the rest of the year," observes president Marc Winkelman, who has grown the chain of gift stores to a hefty $65 million since 1992 by shortening the selling season to maximize return on investment.
The Calendar Club capitalizes on vacant store space and rented kiosks in malls. While this real estate can cost as much as $200 per square foot for three months during the holidays--$30,000 to $40,000 for a premium mall space--that's still less expensive than renting the space and keeping it open the other nine months of the year. Another key to making the strategy work is a big investment in a point-of-purchase information system that can maintain order during the crush at the cash register during a chaotic selling season. Calendar Club maintains a staff of regional managers to recruit and staff the stores with battle-tested retail clerks who are capable of handling the preholiday intensity.
The company's counterintuitive strategy has been so successful that in 1995 a major bookstore chain went into competition against Calendar Club, snagging prime store space because the bookstore already maintained a permanent presence in malls. To stay on equal footing, Calendar Club sold stock to another bookstore chain that also rents space in malls year-round.