OPERATIONS

A Knack for Sweet Deals

Getting preferential treatment from big vendors is deliciously easy for Dylan's Candy Bar.
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Jeff Rubin pops a strawberry gumball into his mouth, then reconsiders his choice. "I've gotta try the piÑa colada," he says, reaching for another. He's a big kid in a candy store, and it kills him to think he might be missing out on something newer, sweeter, tastier. At the business Rubin co-owns -- Dylan's Candy Bar in Manhattan -- Manolo Blahniks and Chuck Taylors alike skip down the candy-embedded resin steps in search of sweet treasures while the '50s tune "Lollipop" blares in the background. Willy Wonka moments are not uncommon here. Where else can you find a Swarovski crystal Miss Piggy Pez dispenser for $149?

Consumers aren't the only ones dying to explore Dylan's. "When buyers from Wal-Mart and Target come to town, they come here and they find everything," says Rubin of his 9,700-square-foot store. "We're like a show room." That's no accident. The exclusive deals Rubin struck with vendors have proven a competitive advantage, helping the company reach annual revenue of more than $5 million, according to industry sources, in just two years in business. Mars, for instance, chose Dylan's to launch a line of 16 new flavors of Skittles, and the Topps Company is planning to roll out a newfangled lollipop there. "They make a statement for candy unlike any other retailer," says Ira Friedman, Topps vice president of new product development.

Rubin owes a good deal of Dylan's buzz to his partner, Dylan Lauren, the daughter of Polo founder Ralph Lauren. A mutual friend introduced the two in June 2000, and Dylan's opened 15 months later with a line that stretched a city block. Ever since, the place has been a celebrity magnet (see sidebar). Vendors love that, of course, but they seem even more taken with the sheer amount of space that Dylan's lets them have. Using a tactic developed when he worked for FAO Schwarz, Rubin gives Mars, Hershey, Dubble Bubble, and Pez each a "store within a store" that enables them to display a broad range of products. "Most people told me 'you'll never sell enough to pay for it,' but I didn't believe it," says Rubin. Dylan's average sale is $14.50, he claims, compared with roughly $4.25 at mall-based bulk candy stores.

Rubin's collaboration with vendors extends to product development, and he always asks for exclusive distribution rights to concepts he helps invent. Last June, for instance, he persuaded the maker of Sour Power Belts -- a chewy candy with a sour, powdery coating that is sold in nine-inch strips -- to make a three-foot version for Dylan's. "My reaction was 'absolutely," says Roberta Cappel, president of Dorval Trading Co. Ltd. "I believe in Dylan's and the exposure that the brand gets there." Similarly, after a brainstorming session between Rubin and four Hershey executives, the chocolatier introduced new colors of foil for its signature Kisses. The concept debuted at Dylan's in October; Rubin spent $12,000 creating an eight-foot-tall Kiss, indented with craters to house the different hues of candy. Less than a month later, however, Hershey's began distributing the product to Wal-Mart.

Rubin wasn't thrilled to lose exclusivity, but he consoles himself with the knowledge that, ultimately, Dylan's and Wal-Mart's customers are as different as Veruca Salt and Charlie Bucket. "This is the most expensive candy store in the world," he boasts. First-time visitors may gasp at the register receipt, but high margins are helping Rubin plan new stores in New York, Texas, and Florida in 2003.


Celebrity Sugar Rushes


Match the stars who frequent Dylan's with their favorite treats.

1 Spike Lee Laffy Taffy A
2 Jerry Seinfeld Jolly Ranchers B
3 Kelly Ripa Red Hots C
4 Serena Williams Necco Wafers D
5 Cindy Crawford Bit-O-Honey E
6 Cynthia Nixon Goetze's Caramels F
7 Steven Spielberg Malted Milk Balls G
8 Candice Bergen Green Swedish Fish H

ANSWERS: 1B; 2E; 3H; 4A; 5F; 6C; 7D; 8G


Please E-mail your comments to editors@inc.com.

Last updated: Apr 1, 2003

DONNA FENN | Inc.com Contributing Editor

Donna Fenn is the author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.




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