by Grace Butland

An Expansion Plan that Worked
Fireworks Gallery Owner Reveals Her strategy for growth at a manageable pace

For Michele Manasse, an urban planner in Seattle, owning a crafts gallery was a dream come true. Her story of parlaying a $7,000 investment into a group of four award-winning Fireworks galleries is an inspiration to others who want to own or grow a retail business.

Owner Michele Manasse inside the University Village location.

The original Fireworks Gallery was founded in Pioneer Square in Seattle in 1983 by potter Steve McGovney. Over the years, Manasse frequented the gallery and chatted about her dream of someday owning a gallery. So, in 1985, when McGovney decided to return to being a full-time artist, he offered to sell her the business. Manasse’s friends had many reasons for advising her not to make the move: The gallery was losing money; retail businesses have a 97 percent failure rate; and Manasse had no retail experience. She agreed with their logic but bought Fireworks anyway with her $7,000 savings. (That was the total sales price for the gallery.)

Manasse hired a manager to work the store, running it herself on the manager’s days off, while continuing to work as an urban planner. She plowed all sales revenues back into the business, focusing on adding new merchandise to broaden the store’s appeal. She bought merchandise she liked, which she defines as “practical objects with a playful edge,” which, she says, everyone else seemed to like too.

The price range of work in the gallery — from $5 to $10,000 — also has a wide appeal. Fireworks’ best-selling line is Sticks furniture, which ranges in price from $200 to $10,000. The second best line features items that sell for $30.

After a year, she gave up her planning business and devoted herself full time to
the gallery. From this modest beginning, Fireworks’ growth rate has been remarkable.

• A second Fireworks Gallery was opened in Westlake Center in the heart of downtown Seattle in 1988. Initially 775 square feet, this gallery was relocated and expanded to 3,000 square feet in August 1999.
• A third Fireworks was opened in Bellevue Square in Bellevue in 1994. This 3,000-square-foot gallery was relocated and redesigned in August 2000.
• The fourth Fireworks, occupying 2,600 square feet, opened in University Village, just north of the University of Washington in Seattle, in August 1997.
• The original Pioneer Square location was expanded and remodeled in 1990 and again in 2001, now occupying 1,000 square feet of retail space and housing the company’s central offices.
• The first six months in business, total sales were $50,000; last year they were approximately $6 million.

Each gallery has a different design. The Pioneer Square store, located in a historic district, features red-brick walls and hardwood floors. The Bellevue location is designed around color and nostalgic imagery. The design of the gallery in the Westlake Center is based on outsider art. And the University Village location, with windows on two sides, has a light and airy “outdoorsy” style.

The art of skillful delegation

The exterior of the Westlake Center location in downtown Seattle.

The key to Manasse’s success has been to recognize opportunities while also understanding her own strengths and weaknesses, she says. When she opened her second location, she hired a retail management consultant to provide expert advice. She continues to work with this consultant regularly on issues such as
open-to-buy, lease negotiations, loan packaging, etc.

Manasse has learned to continuously redefine her role, focusing on her strengths in planning and buying. With the exception of her first year as a gallery owner, Manasse has limited her work schedule to 10:30 a.m. to 5:30 p.m., Monday through Friday. Her method for not letting her business run her life: “Delegate, delegate, delegate. Delegate to people who know what they’re doing,” she says.

A central management team, housed at the Pioneer Square location, controls the general operations of the business. The staff of 12 includes:

• Manasse, who handles all planning and buying for the four stores;
• a corporate operations manager, who oversees hiring, marketing, payroll and day-to-day operations; and
• two merchandising managers who oversee display at the four locations.

Other central office functions include bookkeeping, merchandise receiving, warehousing, special orders, repairs and shipping.

Manasse buys the same merchandise for all four locations. But because sales differ from store to store, there are daily merchandise transfers based on sales
and individual customer requests. All merchandise comes to the Pioneer Square location, where it is unpacked, checked for quality and quantity, and priced. It is then organized by store and delivered daily to the proper location. One employee’s time is entirely devoted to delivering merchandise, transferring items between stores, and running errands.

Keeping track of merchandise

Up-to-date sales information is critical when managing multiple locations and transferring merchandise. A point-of-sale system feeds to the central location and provides timely management reports including:

• daily sales by gallery
• weekly cumulative sales
• monthly cumulative sales
• 13-month history
• sales by location, by artist and by item.

Promoting from within

Fireworks depends on minimal advertising, says Manasse. Newspaper ads are run occasionally, and three or four postcard mailings are sent each year. Combined ads are used, except for the Bellevue Square location, which is advertised separately.

“The hardest part of having multiple locations,” says Manasse, “is hiring and keeping a stable staff. We have mostly part-time sales associates, but not by choice.” The number of employees varies from 6 to 15 per gallery, depending on sales volume and open hours. Finding good associates is difficult during this time of low unemployment, says Manasse.

Ads in the local arts newspaper and store signage are used to attract employees.

FOR MORE INFORMATION

Fireworks 210 1st Ave. South Seattle, WA 98104 (206) 682-8707

Fireworks offers flexible scheduling, health care benefits and a bus pass program as incentives. Managers and seasoned personnel provide training, and customer and staff-friendly policies create a comfortable and fun environment.

It takes about a year to negotiate a lease, design, build and merchandise a store. And, Manasse points out, for every additional store, systems have to be modified to adjust for increased merchandise receiving and sales. She doesn’t foresee opening another location in the near future. “We are currently at a physical limit for warehouse space and price ticketing capabilities,” she says.

For other gallery owners contemplating an additional location, Manasse has this advice:

• Make sure your systems can handle a new location.
• Project your monetary needs and secure a loan for designing, building, inventory increases and cash flow for the first year.
• Make sure you have a continuous line of credit available and are able to meet your financial obligations.
• Hire a professional to help with areas such as lease negotiation, loan packaging, etc.
• Work with a store designer who can understand and interpret your vision for the gallery.
• Check the designer’s references for being on budget and on time. There are penalty clauses in many leases, especially in malls, for late openings.
• Plan for delays relative to timing and monetary requirements.
• Include your staff in the process. Seek suggestions and ideas from all associates. Keeping communication open will ultimately make the planning for expansion easier and more successful.

Adding locations adds costs beyond the initial purchase. There are the continuing requirements of remodeling galleries, updating systems, and being able to keep a consistent flow of merchandise. “Every time we open a new store, we say this is the last one!” says Manasse.