Longevity. Mullen is "the dreamer and the planner," says Schwindinger; "I'm the doer and the fixer." It's Mullen who has put up several maps of the eastern United States on the walls in a corner of the warehouse and has covered them with different colored pushpins. "Red is the warehouse. Blue are our existing stores. Green ones represent malls we want to get into." There are currently 10 green pins on the map, and three lease negotiations are under way: two for this year and one for 1994. "Soon I'll be putting up my West Coast maps," she says, grinning.
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Mullen and Schwindinger's far-flung plans will be radically altered if the couple can't obtain additional financing for expansion. In that case they plan to grow through reinvested earnings, albeit at a much slower pace. Melchior Thompson cautions that the maximum growth rate they could achieve taking that route would be one new location every two years.
By contrast, Comic Attitudes' business plan projects a minimum return of $15.4 million on $40 million in sales by the year 2000 on a 1993 investment of $2 million. That represents a 45% compounded annual return, a figure Mullen arrived at after research among retail venture capitalists indicated they look for compounded annual returns of 30% to 60%. Mullen and Schwindinger anticipate achieving that kind of return through an initial public offering.
The two entrepreneurs are not oblivious to their plan's potential flaws. Their 1992 pretax profit, $25,000, or 3% of revenues, is below the industry average of 5% to 6%. Mullen cheerfully notes that once the debt service is removed from her balance sheet (the couple now owe $157,000, $115,000 of it in a 15-year mortgage loan), Comic Attitudes' margins rise to 8%. The company is also working on getting payroll, now running at 26% of expenses, down to 16%; and companywide occupancy costs, now at 12%, down to 10%.
On the advice of their Small Business Development Corp. consultant, Mullen and Schwindinger have made complete financial projections for Comic Attitudes only through 1995. "Any further out and things get too fuzzy," says Mullen. While the 4% to 7.5% profit margins they expect for the next three years are feasible, Thompson says a more ideal range for a multistore operation is 10% to 20%.
Assuming the couple can locate capital, and assuming the newly installed point-of-sales automation is able to keep a tight lid on ordering and inventory, the operation could still be thwarted as it expands by the company's lack of a sophisticated personnel or training system. At present, Schwindinger is responsible for all hiring and training. He interviews candidates, even for part-time jobs, two and three times and has had great success so far with his hires. (Jim Donnohue, senior buyer for the sidelines division, was so enticed by the way Schwindinger treats employees that he took a 21% pay cut from his former retail position at Banana Republic to come work for Comic Attitudes.) Schwindinger plans to build his management team from the ground up -- starting everyone as a sales associate -- and then gradually to shift training responsibilities to the more experienced associates. The system has worked beautifully with just 16 employees and two stores but begs the question: Can Schwindinger's personal touch be expanded nationwide?
Most in the industry agree that the growth of a national comic-book-store chain is inevitable. At a recent industry roundtable, Marvel Comics president Terry Stewart made it no secret that he had been in discussions with Blockbuster, with bookstores, and with record-store chains. If retailers from within the industry don't beat Mullen and Schwindinger to the finish line, a Blockbuster or similar entertainment retail chain might start carrying comics; easily scale the hurdles of capital, systems, and training; and blow everyone else out of the race.
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Piscataway, where Comic Attitudes is headquartered, is a Native American word meaning "It's growing darker."
"No, I don't think it's an omen," says Schwindinger emphatically, though he confesses that speculating about the national-comic-book-chain race puts him into a funk. But, taking his cue from his wife's perennially upbeat mood, he cheers himself up by ticking off their accomplishments in 1992: they moved the Kilmer Square location, opened a warehouse, added staff, bought a computer system, were featured in Chain Store Executive, and made central New Jersey's list of top 20 businesses. "It's been a big year," he comments, adding, "I think every year is going to be a big year, and I think I'm starting to like it."
EXECUTIVE SUMMARY
Company: Comic Attitudes, Piscataway, N.J.
Concept: To become the first and dominant national specialty comic-book-store chain, providing superior customer service and selection. Elevate comic-book stores' image with well-lighted, brightly colored stores located in upscale malls
Projections: Double the number of stores, from two to four in 1993, posting a profit of $57,000 on sales of $1.35 million. Obtain $2 million of private-placement (or venture-capital) funds to expand to 25 stores in the Northeast by 1997. Go public and roll out across the country, eventually becoming a 400-store national chain
Hurdles: Staving off competition from more-established, less capital-intensive shops or deep-pocketed entertainment chains that may enter the market. Raising the money to expand nationally and ensuring that inventory-management, training, and personnel systems can support growth
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THE FOUNDERS
Kathleen Mullen and Timothy Schwindinger
Age: 36, 31
Family: Married to each other
Personal funds invested: $12,000 (plus $23,000 from Mullen's father)
