Even for adults who have moved beyond Peter Pan’s fervent desire never to grow up, entering a toy store raises memories of a magical time when imagination was rampant and the only important decision was which toy to play with.
But facing the oh so many possibilities at the specialty toy franchise Learning Express at the Princeton Shopping Center, grownups have to make a different kind of choice — not what toy interests them but what will capture the child they hope to surprise with the perfect gift.
Luckily John Sherman, the owner for the past 14 years, and his crew know how to help customers pick just the right toy. After a bit of back and forth exploring what the child enjoys, Sherman says he can tell when he’s getting hot, and often he is right on target.
“The reward comes two or three weeks later,” he says, “when a customer tells me, ‘That toy you suggested was the favorite toy they got for their birthday.’ That’s the most fun thing about toy stores by far; and it’s good for business, because the person will come back next time.”
Now Sherman hopes someone else will want to catch the retail bug. His store is up for sale — a perfect opportunity perhaps for a professional couple with young children and worn out by the corporate commute.
That was pretty much Sherman’s situation when he bought his Learning Express store. He got into the toy business after being downsized from a marketing position at Johnson & Johnson.
Considering what to do next, he met a guy who was marketing franchises at the outplacement office. The idea of a toy franchise appealed to him because, in an odd way, it was remarkably similar to selling drugs. “At Johnson & Johnson I was marketing what was very positive — making people healthy and happy,” he recalls. Toys, he continues, make children happy and help them develop skills.
Although Sherman originally wanted to open his store in Princeton, nothing was available, so he got his start with a store in West Windsor in 1996. About two years later he moved into the perfect space at the Princeton Shopping Center. Not only is it located smack in the middle of the shopping center, which opens it up to lots of walk-in traffic, but having windows on two sides makes the space especially bright and cheery. He sold the West Windsor store two years after opening in Princeton, and it eventually closed; but he still runs into old customers who tell him, “We miss you so much in West Windsor.”
Lots of things are fun about being a toy store owner, but one thing Sherman especially enjoys is when a child comes in to buy a gift for a friend. Whereas adults tend to buy a single item, like a fancier craft kit, children handle things differently.
“A child may buy a smaller craft kit, then name stickers, throw in a mood ring, then a couple of animal erasers,” he says. “It’s fun to see what combinations they put together.” He notes, though, that parents often leave their children at home when shopping for toys to avoid the “I want that” followed by “remember, you’re here to buy a present for Bob” scenario.
Another big plus for Sherman is developing his mostly teenage staff — except for Debbie Lampf, an adult, who has been with store since it opened. “A lot of the kids I hire grew up getting stuff at the store,” says Sherman. “They have in their hearts that they love the place to begin with, and who better to recommend something to a five-year-old girl than a girl who was once five and got things at the store?”
Regarding the mentoring he does to transform these teenagers into responsible workers— an effort that Sherman views in part as community service — he says, “It’s challenging but very rewarding.” Early on, for example, a teenager who is scheduled for Wednesday from 3 to 7 p.m. might call at 1 p.m. and say, “I can’t come today because I forgot I had to go to the doctor.” And of course Sherman’s response is “When we did the schedule last week, why didn’t you tell me?”
But what is amazing to him is that even when they come in disorganized, four or five months later they’ve got it. Usually they come to work as juniors or seniors, but he says that virtually all come back to work during Thanksgiving and Christmas their first year of college. “It shows you they like it — it’s part of coming home,” says Sherman.
Because he sees them so often, he even feels like he goes through some of their personal challenges, like the college application process, with them, and he notes, “Often I say I don’t have three kids — I have eight. Three are mine and five are at the store.”
It’s not just the people side of the business but also the merchandise that Sherman enjoys — toys are great fun in and of themselves. One of Sherman’s favorites, for a 12-month-old, was shaped like a steering wheel. When a child turned on the toy, it sounded like a car starting, and it also had buttons for a police siren, horn, and radio. Even adults thought it was cool, he says, and they would stand in the store playing with it.
Also popular are brain teaser games like “Rush Hour.” For middle school girls, “Locker Looks” provides decorations for school lockers, including wall paper, mirrors, wipe-off boards, clocks, chandeliers, and rugs. And of course Sherman has plenty of the ongoing sellers like science kits, Playmobil, and Legos.
Owning a toy store also makes you a known entity in the community. “You can’t go anywhere in Princeton without running into someone from the store,” says Sherman. “And I’ve been to parent activities at Loyola twice, all the way down in Baltimore, and both times I have run into people from the store.”
The store is open daily, but much of the activity is around weekend birthday parties. Regarding the purchase of presents, says Sherman, “Thursday is a good time for more organized people, Friday for the less organized, and Saturday they are on their way to the party and need it for the big day.” Sherman tends to be in the store from the 10 a.m. opening through the arrival of the high-school kids, and he is always there on Saturday because it is the biggest day of the week; Sunday he takes off.
But even an environment as upbeat as a toy store is not immune to business challenges. Sherman unfortunately has hit several major stumbling blocks that have worn him down and contributed to his decision to sell the store.
The first was the remodeling of the shopping center in the late 2000s. For a month and a half they had to close up the walkway next to his store, requiring customers to reach Learning Express indirectly from the entrances near McCaffrey’s or Rite Aid. And customers had to snake their way into the store via a passageway covered in dark plastic. What’s more, they had to endure the racket outside. “Even on Black Friday, someone was drilling on the outside of the store,” says Sherman. On the plus side, though, remodeling is not likely to happen again for a long time.
Another whammy followed hard on the completion of the center’s remodeling effort. “The exact month that they finished the remodeling was the month that the stock market plunged and the recession started,” says Sherman.
The third big challenge he faced was when his bookkeeper stole money from him, as she had also done to several other victims; and she is now serving a six-year prison term.
Since then, Sherman has done his own bookkeeping, but the whole experience was difficult emotionally. “She was the nicest person you’ve ever met,” he says about her, “which is part of the disillusioning aspect of it. It definitely reduces your trust in people.”
Finally, he also faced a challenge on the personal level. Sherman and his wife, who was actively involved in heloing run the store, got divorced.
Sherman is selling the store now for several reasons, mostly personal. First of all, he is 63, and it feels physically more difficult than it once was. “After 14 years, even though it is a lot of fun, it is harder,” he says.
Secondly, he is finding that the parts of the job he does not enjoy have felt more burdensome over time. His favorite activity is to be out front helping customers, not sitting in the back office.
Thirdly, he is just ready for something different workwise, and he would like to put more time into painting, which has been a long-time avocation and love. He paints every day in what he calls an “abstract, hard-edged” style, and since the birth of his third child, he says he has also gotten involved in the local art scene. In the 1990s he had a one-person show at the former Magenta Gallery in Rocky Hill.
During Sherman’s tenure as owner of his store one of the big pluses for him has been Learning Express corporate. First of all, they are knowledgeable. “They’ve been doing it for 20 years, so they have it down cold,” he says.
Founded in 1987 by CEO Sharon DiMinico, Learning Express has more than 140 franchised stores in 26 states.
According to the corporate website, www.corporate.learningexpress.com, DiMinico developed a business plan for a specialty toy store after the birth of her second child. “She saw the need for a store that would offer high quality toys, books, and games for children all the way through their pre-teen years.”
Her plan “was based on the belief that toys should encourage creativity and learning, foster developmental growth, and, of course, be fun,” says the website. “She envisioned a store that would provide a carefully selected product mix, designed to pique a customer’s curiosity; an expert sales staff to provide advice for parents; and a friendly, hands-on atmosphere where kids could test out the toys and their skills.”
The first store was opened in Acton, Massachusetts, as a way for the nearby Groton Community School — a private nursery school — to supplement its revenue. DiMinico was chair of the school’s board of directors and her children also attended the school.
She evolved the concept further after reading an article in Inc. Magazine on franchising and decided to structure the company on the franchise business model. About six months after the initial store, DiMinico opened her first corporate store in Needham, Massachusetts.
In order to open a franchise, Learning Express has established the following minimum financial requirements:
• A cash investment of 50 percent of the average total cost of opening a Learning Express store, which is estimated to be between $100,000 and $125,000.
• Resources to finance the remaining balance.
• Personal living expenses from the time the franchisee leaves his or her current employment through the grand opening. It is also recommended that on opening day they have at least $10,000 in cash reserves as a cushion for the first few months.
These criteria don’t necessarily apply when an existing franchise is being sold, says Steve Kessel, a regional owner and partner with Learning Express.
“In those instances we take it on a case by case basis,” Kessel says.
According to the financial disclosure document (FDD) filed by Learning Express coprorate with the Federal Trade Commission in March, 2012, the cost of buying a franchise and opening a new store ranges between $209,500 and $323,000.
Estimated costs include: an initial franchise fee of $35,000; between $90,000 and $150,000 for inventory; between $15,000 and $80,000 to customize the store rental space; and between $30,000 and $62,000 for signange, equipment, furniture, and fixtures.
Because of time constraints, Sherman says he is willing to sell his store for a much lower amount than the cost of a new franchise.
“The person who is buying John Sherman’s store would be getting a huge discount as compared to the cost of a new store,” says Kessel. He also points out that the store already has inventory and interior furnishings, although some minor remodeling might be necessary.
About Sherman, Kessel says, “He has been with Learning Express for about 15 years and has realized that it is time for him to retire, and he is willing to sell his business at an extremely fair price in order to keep the Learning Express name alive and well in the Princeton neighborhood.”
Included in the sale, he adds, are the 8,000 customers Sherman has on his guest list, which would be the basis of the social networking the Learning Express encourages via e-marketing, Facebook, and Twitter.
Typical owners, says Kessel, are involved in merchandising, marketing, buying, customer service, employee management, and public relations. Customer service, he adds, is an area where Learning Express feels it is superior, for example, it giftwraps and personalizes gifts for free.
With Learning Express in a vibrant toy market that generates billions of dollars in sales annually, Kessel suggests that the store has the potential to bring in significant income.
Federal law bars Kessel or any representative of the company from giving estimates on how much someone can make owning a Learning Express, but details from the FTC filing reveal some ideas about the finances involved.
According to the FDD, the average sales of Learning Express stores over the last three years were $835,275 in 2009, $835,760 in 2010, and $741,136 in 2011. The top-performing store made $1.8 million in 2009, $1.9 million in 2010, and $1.6 million in 2011.
The FDD also reports the average gross profit dollars (GDP) for those stores. The GDP is calculated by subtracting the cost of good from gross sales. This amount doesn’t include costs such as payroll, rent, and the franchise fee, which is 5 percent of gross sales per month.
The average GPD over the last three years was reported to be $383,275 in 2009, $419,363 in 2010, and $356,063 in 2011.
Kessel says he believes the Princeton store can be very successful, given the right owner.”That store could literally be doing double the existing sales.”
When Sherman first opened, he knew nothing about toys and that was really okay. His advisors from Learning Express ordered his starting inventory, and the company’s software tracks sales, enabling him to determine the toys that are selling and those that are not, so that he knows what he needs to order and what needs to go on sale. Because all the stores send in monthly sales, he can also view aggregate corporate sales data, to help guide his decision-making.
Another advantage of Learning Express that Sherman has appreciated is the balanced relationship the corporation has with its franchisees. “We not only allow entrepreneurs freedom; we encourage it,” says Kessel. “We give our franchisees a perfect roadmap to success yet at the same time allow them the freedom to experiment with new inventory and new marketing opportunities.”
For vetting ideas and getting suggestions, Sherman has the entire Learning Express community available through the corporate intranet, where people share what toys are hot and what strategies have been working well for them. And his corporate advisors are always ready with help and a listening ear.
Each year franchisees see each other twice, first at the February toy fair in New York and second at the June Learning Express convention, where the company brings in all the toy sellers whose products will be featured in the year’s holiday catalog, and the store owners can order what they want.
Learning Express is also a very stable company. Sherman says, “It helps that the people who are in charge of the company and most of the people below the top level are the same today as they were 15 years ago, and they are the most helpful, nicest bunch you could ever ask for.”
Sherman was born in Manhattan and grew up on 85th street between Park and Lexington. Both his father, an allergist, and his mother painted as a hobby.
After graduating from St. Mark’s School, an Episcopal school in Southborough, Massachusetts, he started college at Columbia University. He transferred to University of California-Berkeley, graduating in 1972 with a degree in American studies. Back then this was an individual major, and his focus in his coursework was on answering the question, “What makes the United States the way it is today?”
Sherman’s first job was at a Berkeley movie theater, where he selected old movies, such as the Marks brothers, Bogart, and Fellini, and did advertising. After four years, he got into videotaping, and worked freelance doing promotional and training videos. This led to a cable news show in Contra Costa County, California, where 90 percent of people had cable even in the 1970s. He was the director in the studio for the weekly show, the cameraman for the reporting, and the editor of the reports.
After about four years, he started televising horse races at the Golden Gate Fields and Bay Meadows racetracks in the Bay Area; and during the summer he would follow racing to county fairs. “It was the hardest job I ever had,” he recalls. “Thirteen out of fourteen days we would work, and on the fourteenth we would take the equipment from this fair to the next and set up for racing there.”
After three years of this work, Sherman went to Columbia Business School and after graduating with an MBA went to work for Clorox in San Francisco, where he did marketing from 1977 to 1983. Then he moved to Johnson & Johnson, where he began as brand assistant for Band-Aid brand. After that he became brand manager of New Wound Care Products, then J&J Dental Floss, and then Act Flouride Rinse. Finally, he became director of marketing for Live to Life, a health promotion program that the company used to sell.
Sherman has three children, all a little old at this point for purchases in a toy store, but his 21-year-old daughter, Sara, a psychology major at New York University, has really enjoyed working there. “When she’s there, she sees it as her store,” he says. Sherman also has a 19-year-old son, John, a sophomore at at Loyola University, and a 15-year-old son, Thomas, who is a freshman at Hopewell Valley Central High School.
To sell his store, Sherman is working closely with Kessel, who sees the business as a great opportunity. “We’re looking for the right owner who loves children, who is an entrepreneur at heart, and who has the energy and personality to take Learning Express in Princeton to a new level,” he says. This would require some slight remodeling and equipment changes as well as some updating of the current inventory.
If real estate is location, location, location, Kessel suggests that Learning Express is in the perfect spot at Princeton Shopping Center. It is across the way from a kids’ clothing store, near a children’s dentist and Princeton-Nassau Pediatrics, and not far from Princeton Ballet School above McCaffrey’s; and of course many restaurants bring in traffic on a daily basis. “It is a very kids-oriented shopping center, which helps a lot,” says Kessel. “There is a great synergy among the stores.”
Kessel also views Princeton more generally as the perfect venue for a toy store. “The demographics in Princeton are amazing: a dense population that is very educated, has a huge income, and lots of kids,” he says.
Prospective buyers can contact Kessel at 617-921-2591 or E-mail him at firstname.lastname@example.org.
Learning Express, 301 North Harrison Street, Princeton Shopping Center, Princeton 08540; 609-921-9110; fax, 609-921-9120. John Sherman, owner. www.princeton.learningexpress-toys.com.