MAYS LANDING — Shoppers at the Hamilton Mall the past few years have seen the birth of a national chain, and probably didn’t realize it.
In 2009, Spencer Gifts, headquartered in Egg Harbor Township, launched its holiday toys popup concept, ToyZam, with a first store at the mall and 24 others, mainly on the East Coast.
This year ToyZam has 100 stores nationwide and sales have grown each year, said Jerry Pierce, vice president of new business development for Spencer Gifts.
“We have used the Hamilton Mall location as our model store to develop plans for the balance of the chain,” said Pierce, 53, of Brigantine. “Typically we’re bringing product in and laying it out in late summer.”
That first ToyZam store started on the mall’s first floor adjacent to Sears. This year, it moved to a larger location on the other side, still next to Sears.
“I’m in there nearly on a daily basis, along with our merchandising and visual teams,” Pierce said. Now that the holiday shopping season is here, he’ll visit other ToyZam stores around the country.
Pierce said each year the company has learned ways to make the shopping experience better, but has stuck with its original concept: a chain of seasonal stores selling a blend of specialty toys and national brands, “and our own unique toys you can’t find anywhere else.” An example is a remote control helicopter that’s nearly 5 feet long.
One key change is that as ToyZam has expanded, national brands such as Mattel, Hasbro, Fisher-Price and Playskool have embraced the concept and worked with the company, he said. When there were 25 stores, they lacked interest.
The other key concept for ToyZam, which “sets us apart from anyone else,” he said, is that stores are set up to encourage children to try the toys. “Our motto is, ‘It’s OK to play.’”
So, plenty of floor space is available, allowing preschoolers to ride around on a little train or kids to take a Spooner Board for a test spin.
Pierce said most stores have a music space where kids can play a keyboard or sing into a microphone.
“Being in business, I’m looking at the numbers all the time, and they’re good, but the most satisfying thing is seeing how customers are excited to touch, feel and play with the products,” he said.
With ToyZam, Spencer Gifts is bringing to seasonal toys the strength and experience in popup stores that has made Spirit Halloween dominant in its seasonal market.
One of the synergies is that most of the ToyZam staff comes from Spirit Halloween, which is made possible by the convenient schedule of the two holidays involved.
“We use their teams both in the field and in the home office,” Pierce said, and the experienced staffers know the seasonal-store business and the importance of customer service.
With 725 stores, Spirit Halloween is much larger, but ToyZam also uses many of its 75 smaller mall-based locations for its holiday season, he said.
Privately held Spencer Gifts LLC is owned by private equity firm ACON Investments and the company’s management, which bought out the Gordon Brothers Group in 2007.
Sales estimates by financial analysts vary widely. Dun & Bradstreet estimates annual sales at $246 million, while Reed Elsevier estimates a sales range of $500 million to $550 million.
Pierce and two senior buyers came to Spencer Gifts from KB Toys, which went out of business at the end of 2008, leaving a big opening in the retail toy market.
Pierce said that despite launching ToyZam in the worst economic downturn since Spencer Gifts was founded 60 years ago, “we’re very pleased with what we’ve accomplished to date.”
He said Spencer is appropriately cautious.
“We take steps as opposed to running. Our goal is to continue to grow until we reach that natural point where we feel we’ve covered the marketplace.”
He said he hopes to add another segment — online sales — to ToyZam’s growth next year.
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