DETROIT -- The people who run Frank's Nursery & Crafts believe the retailer's future lies in the nation's posher suburbs and have embarked on an ambitious expansion plan that targets affluent baby boomers.
Frank's Nursery & Crafts, the sole operating unit of General Host Corp. of Stamford, Conn., was ranked the largest retail garden center last year by Nursery Business Retailer Magazine.
It has grown from 95 outlets four years ago to 277 in 17 states. And the company's strategic plan calls for adding 123 new stores by the end of 1995. That's a 50 percent increase in four years.
The expansion is fueled by $143 million in cash from the proceeds of a recent offering of senior and convertible subordinated notes.
Under the direction of General Host Chief Executive Officer Harris Ashton, Frank's sales have blossomed from $150 million when it was acquired in 1983 to $520 million in 1991.
The guiding philosophy behind Frank's expansion is to go where the money is.
Charles Houston, vice president in charge of real estate for the expanding chain, said it has been focusing on higher income neighborhoods since 1985.
'We're interested in areas that have discretionary dollars, quality one-family suburban communities,' he said.
Frank's also is sticking close to proven markets.
'We're focusing on developing about 75 percent of our new stores in existing markets,' he said.
The company's annual report notes that nearly half of Frank's customers are baby boomers -- people between the ages of 30 and 49 -- while another third are consumers over 50.
With those people in mind, Frank's has introduced a Preferred Customer Program 'in order to form closer relationships with its customers.' As part of the package, customers receive a newsletter and a card that awards them a $5 coupon each time their purchases reach $100.
The company has installed a new computer system that tracks sales and inventory on a daily basis and provides feedback on buying patterns.
In addition, satellite dishes were installed at each store this spring and by the end of August every store will have the ability to deliver credit card authorization in seven seconds, compared to the current 45 seconds to 60 seconds.
When Ashton, an attorney, joined General Host in 1973, the company owned several food companies, including Hickory Farms and Budget Gourmet. He led the company into meatpacking ventures, then frozen foods, followed by convenience stores and specialty food producers.
General Host bought Frank's Nursery and Crafts in 1983 after research showed higher operating profits could be found in the lawn and garden area than in the food business.
During the mid-1980s, Ashton began selling off General Host's food businesses and focusing the company's resources on expanding Franks.
Stores are located in Connecticut, Delaware, Florida, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Pennsylvania, Tennessee and Virginia.
During fiscal 1991, Frank's opened 10 stores, all in existing markets. The 1992 plan is to open 15 new stores.
Net income for fiscal 1992, which ended Jan. 22, was $13.8 million compared with $3.3 million for fiscal 1991. The 1991 figure, however, included a $7.8 million gain on the sale of Frank's 80 percent interest in Calloway's Nursery.
Sales in fiscal 1992 totaled $520 million, up from $515.4 million in 1991. By the end of 1995, Ashton projects sales of $800 million.
In addition to lawn and garden products, Frank's sells Christmas merchandise during the holiday season, including live Christmas trees and poinsettias. It also sells supplies for such crafts as needlework, silk flower arrangements, fabric decorating and woodworking.
Although the spring planting season is the retailer's biggest moneymaker, the Christmas holiday season is coming on strong. Christmas is Frank's second most profitable season, accounting for 16 percent of sales.
Frank's experimented in 1990 with three Christmas boutiques -- stand- alone 'temporary' stores rather than in-store displays. After a successful response, it implemented a seasonal expansion program and opened 100 Christmas boutiques in 15 states.
Those outlets, a company spokeswoman said, 'received overwhelming support from our customers,' generating $6 million in revenues during fiscal 1992.
'The success of these stores has convinced Frank's that the concept has great potential,' she said. 'Current plans calls for at least 125 stores in 1992, including some experimental kiosks in shopping malls.'
In addition to the separate Christmas stores and smaller kiosks at malls, a portion of each Frank's store is set aside during the season solely for Christmas items.NEWLN: