Following the Profit Margin

Bill McCurry

“I love the garden center side of my business. It’s the most enjoyable, but least profitable department,” DeWayne Lee says. “I’m really a color store. We don’t sell traditional garden center hardware or chemicals.” Instead he’s become a gift store with a garden center department. He started 24 years ago as a roadside fruit stand before morphing into a traditional garden center. He embraced the Home and Garden Showplace concept and he’s still involved with various garden center gatherings. But he changed his name from DeWayne’s Home and Garden Showplace to just “DeWayne’s” to reflect the merchandising shift.

DeWayne creates an environment that his customers treasure. DeWayne believes most of his customers aren’t avid gardeners, but do want colorful and beautiful yards. “People want pretty things for their home and for themselves. We provide them.”

DeWayne’s tightly focused garden center offerings show how he follows the profit margins and focuses on stronger lines that produce dollars. “We’re a business. We need higher margin products. Hardware doesn’t deliver the margins we need like our more gift-oriented lines.

“Our biggest challenge is women want to buy high-end lines, especially in our Ladies Clothing Boutique. Several of these better brands wouldn’t sell to us when we had ‘garden center’ in our name. The image of a garden center isn’t what jewelry lines like Pandora or Alex and Ani want, either. We were fortunate with Pandora. We got them very early in their history. Our jewelry department brings in more revenue than our entire garden center business. We describe ourselves as a destination retail store, with the garden center as one of many departments. That’s how we need to be understood by leading suppliers.”

Not many garden centers are seen as top-end gift retailers because they consider gifts an afterthought. His advice to more traditional garden center stores that want to branch into better gift lines is: “Find small manufacturers/brands you can work with. They’re more interested in trying new things with different partners. You have to court them. Your first sale to make is to their decision-makers. That can be very touchy. You must convince them your garden center will enhance their brand, not detract from it.”

Today, you can’t call up a higher-end vendor and say, “I want to sell your product. Send me a catalog.” You have to convince the gift/boutique wholesaler your store will enhance the consumer value of their brand. Good brands aren’t looking for retailers. Good retailers search out and convince good brands to sell to them. DeWayne has been “romancing” some vendors for years. “We haven’t gotten all of them yet, but eventually they’ll understand what we can do for them.”

He hasn’t found any of his best suppliers at horticultural trade shows. He finds gift shows/marts, along with networking with other storeowners, are good sources of potential vendors and ideas.

DeWayne has 35 full-time and more than 50 high-season employees. By year’s end, he’ll have opened a 20,000 sq. ft. expansion featuring new greenhouses and a new, year-round Christmas Shop. After this project, he will add an additional 3,500 sq. ft. expansion of the gift wrap/cashier area to accommodate the traffic. The existing 9,000 ft. of greenhouses will be renovated into more gift shop and boutique shopping areas.

DeWayne doesn’t envision a time he’ll stop offering green goods, but he sees that area getting smaller. “I don’t continue to invest in low-margin areas. My focus must be higher-margin goods. We have to pay for this expansion and then the next one.” Stop by and see him in Selma, North Carolina, or at www.DeWaynes.com. You’ll be impressed by how well his philosophy has worked. GP

Have a question for Bill? Contact him at wmccurry@mccurryassoc.com or (609) 688-1169.