DOROTHY LANE SAYS SPA STORE IS WORKING OUT

CHAPIN CLARK

DAYTON, Ohio -- The decision by Dorothy Lane Market here to devote a stand-alone store to natural body care products and nutritional supplements is paying off.

The 1,200-square-foot DLM Spa Store here, which adjoins Dorothy Lane's Washington Square Shopping Center location with a separate entrance, is close to breaking even after only five months in operation.

"We had hoped to break even after one year of operation, and we're going to break that one-year goal soon," said Scott Lindsay, the Spa Store's manager and buyer. "Sales are definitely increasing."

Although Lindsay declined to give specific weekly sales figures to date, he said Dorothy Lane expects the Spa Store in three years to be making $20,000 to $25,000 in weekly sales, or between $1.04 million and $1.3 million annually.

The store's 2,480 stockkeeping units are divided equally between supplements and body care items, Lindsay said, with a few natural snack items rounding out the assortment.

Later this month, the Spa Store will begin offering an in-store full-body-massage service, with certified massage therapists available by appointment at about $50 an hour, according to Lindsay.

"With the name Spa, [customers] assume that we have some of those services available, and it's a way to create traffic in the store."

Lindsay is also starting a "vitamin club" for the fall-winter flu season, in which members will get discount coupons after making a certain number of vitamin and supplement purchases.

Private-label business represents 35% to 40% of all vitamin and supplement sales, according to Lindsay, with Solgar accounting for 20% and most of the rest evenly split among Schiff, Twinlab and Enzymatic. Other, smaller suppliers the Spa Store stocks include Nutrition Now, Natrol and Nature's Secret.

The DLM Spa brand comprises about 150 SKUs and is supplied by Vitamer, Irvine, Calif. The Spa Store gets 80% of its stock through distributor Haddon House, Medford, N.J.

Among the supplements, Lindsay singled out St. John's Wort, a remedy for mild depression, and glucosamine chondroitin, an arthritis treatment, as strong sellers. Also performing well are bath salts from Masada, lotions from Kiss My Face and Nature's Gate and soaps from Wood Spirits and Baudelaire.

Margins, Lindsay said, are 40% on branded supplements and body-care products and 50% on private-label supplements.

Dorothy Lane is promoting the Spa Store primarily through radio advertising, in-store signage, bag stuffers and its Market Report newsletter.

"We haven't had a whole lot of success with newspaper advertising," Lindsay noted.

On a Saturday in mid-September, a Dayton AM radio station, WHIO, broadcast from the Spa Store from 11 a.m. to 2 p.m. In conjunction, the store brought in two chiropractors to give free consultations, and vendor representatives were on hand to distribute product samples. Dorothy Lane also bought 50 ads on WHIO to promote the Spa Store over the course of the weekend.

Lindsay said first-time visitors to the Spa Store often don't buy anything but return later to make purchases.

"It's still new to people. People don't really know what to expect. With these kinds of products, it's not an impulse."

Omitting organic food from the Spa Store concept was a decision that was well thought through, Lindsay said, pointing out that the Dorothy Lane next door has organic food integrated into its regular grocery sets and "already has the largest selection of organic produce in town.

"Also, I think most of our customers are overwhelmed by a typical health-food store. They're not into a whole lifestyle change."

The space that now houses the Spa Store was vacant for a year prior to its opening in May. Its last occupant was a branch of a small local pharmacy chain.