GEPHART TAKES ON BAD CHECKS AND SAVES $50,000

CHRISTINA VEIDERS

FINDLAY, Ohio -- Mark Gephart has risen through the ranks at Fresh Encounter here by being hard-nosed about business fundamentals and by closely monitoring line items on the budget sheet that impacts the bottom line.

As chief operating officer, a position Gephart assumed three years ago, he supervises three district managers and oversees loss prevention, store operations and human resources, including benefit and payroll administration.

In a market where Fresh Encounter faces increased pressure from big-store operators like Kroger, Meijer, and Wal-Mart and Kmart supercenters, having someone like Gephart who has mastered running an efficient operation is essential for any independent's survival in today's fight for food retailing dollars.

"I believe our independence plays a big role in our success," said Gephart, 46, who has spent his entire career with Fresh Encounter. He has worked in all facets of the retail operation for the last 26 years beginning as a store clerk who quickly moved into store management and then became a buyer and eventually director of merchandising.

Gephart also is an active member of the Columbus-based Ohio Grocers Association and serves as vice chairman of membership services and is a member of the executive committee. "Mark is a very knowledgeable guy and someone you want to have on your team," said Tom Jackson, president and chief executive officer of the association.

Part of Fresh Encounter's strength comes from the retailer's ability to evaluate third-party applications from vendors and wholesalers, said Gephart.

"We have a good understanding of how much it costs to provide these services. We are in a position to evaluate if [third-party] programs fit our organization," Gephart noted.

Gephart put the evaluation process into practice when he became COO and began looking at loss prevention. One area that needed attention was bad checks, which averaged a net loss of $75,000 a quarter. Losses were rising and collections were being handled by a third-party agency. Technology was partly to blame for more fraudulent checks being cashed, said Gephart. VersaChecks, a payroll software application readily available at office supply stores, makes it easy to print phony payroll checks from a fictitious company.

Fresh Encounter not only cashes checks as a customer service but it is a source of income for the retailer that operates stores in both urban and rural locations.

Gephart decided to bring the check collection process in-house and assigned a store manager who received her degree in criminology to the task. The store manager has since been promoted to manager of loss prevention.

The retailer invested about $5,000 in software to track bad checks and collections, dedicated a personal computer for collections and hired a full-time person for data entry. "By bringing this process under our own administration we realized an improvement in bad check expense of plus $50,000 in three years, net of any additional expense spent. Not only did we improve the bottom-line results, we now maintain better control of associate performance and customer relations," said Gephart.

Reporting to Mike Needler, president and chief executive officer, Gephart said Needler "is always demanding our attention to detail and innovation. We are in a position of limited capital resources so our recommendations must be well planned and justified. He expects us to develp winning strategies that focus squarely on the fundamentals."

Said Needler of Gephart, "In general operations, Mark's efforts have resulted in substantial savings for the company. Like any good COO, Mark is good at the details and the details are critical in retail."

AT A GLANCE

Mark D. Gephart

chief operating officer, Fresh Encounter

Age: 46

Supervisor: Mike Needler, president and chief executive officer

Years with company: 26

General Interests:

Basketball, tennis

Latest Book Read:

"Standing for Something" by Gordon B. Hinkley, a religious and inspirational book on 10 neglected virtues.

Most Admired Person:

President George Bush. "I believe President Bush has brought renewed faith and leadership in the direction of our nation. He has restored credibility and respect in the office of the presidency."

Most Challenging Part Of The Job:

"Develop store operations to reflect the administrative strategies, utilize evolving technologies available, and create a work environment that will support company objectives."

Most Enjoyable Part Of The Job:

"My greatest sense of accomplishment comes when I receive a compliment from a customer expressing their thanks for the treatment or service they received while shopping at one of our stores."