LEONARD'S SET TO CONSTRUCT ITS FIRST UNIT IN NEW YORK

Elliot Zwiebach

NORWALK, Conn. -- Stew Leonard's here said last week it will open a new store in Yonkers, N.Y., in the spring of 1999 -- the company's third location in its 29-year history and its first outside Connecticut.

In addition to their assortment of dairy and gourmet items, the two existing Stew Leonard's stores, in Norwalk and Danbury, Conn., are renowned for their crowd-pleasing atmosphere, which includes petting zoos, singing robots and costumed employees.

After several years of legal difficulties that have enveloped company founder Stew Leonard Sr. and his two sons, the announcement of the new store was certainly the company's best publicity in months.

The company still hopes to be able to open an additional store in Orange, Conn. -- if it can convince the town's zoning board to reverse an earlier decision against rezoning a 50-acre site that Stew Leonard's acquired for retail development.

Bill Hollis, vice president of Stew Leonard's, told SN there could be a public referendum in Orange on the rezoning issue in 1999 or 2000, "so any decision on opening our fourth store there is probably two or three years away."

Any future expansion beyond the possible move to Orange "will depend on how successful we are in Yonkers," Hollis said. "As a private company, there's no pressure on us to grow, and we have no explosive growth planned. We expect to grow as our people grow, but as this point all our guns are focused on Yonkers."

The Yonkers store will be 130,000 square feet, including 110,000 square feet of selling area -- about the same size as the company's two existing stores, Hollis pointed out. It will be located in a new commercial center with Home Depot and Price Costco in what Hollis called "a destination location" just off the Thomas E. Dewey Thruway.

"The adjacencies will probably help each of us because people will have more reason to stop there," Hollis said. "If we were in that location by ourselves, it might be more difficult to get people to stop just for food. But we see advantages for attracting more of the public by combining our location with two other big draws."

Hollis said Stew Leonard's hopes to break ground in Yonkers later this month.

The new store will be located about 40 miles west of here -- about the same distance (35 miles north) as the Danbury store is from here, Hollis noted.

Being located just north of New York City, the Yonkers store may carry a slightly different merchandise assortment, he said. "For example, we might carry more ethnic foods than we do in Connecticut.

"Our intent is to give people the products and services they want, and we will try to dazzle the public with our assortment." The Norwalk store opened in 1968; the Danbury store opened in 1989. Currently, the stores account for about $160 million in combined annual sales.

While the stores have been successful, the Leonard family has been going through some tough times:

Stew Leonard, the company's founder, pleaded guilty in 1993 to skimming more than $17 million from the store here. He was sentenced to four years in a federal prison and was released in June.

Thomas Leonard, the founder's son, pleaded guilty in September to two counts of aiding and assisting in the preparation of false tax returns; he will be sentenced later this month. He gave up his position as president of the Danbury store a year and a half ago when he left the United States for England.

Stew Leonard Jr., the founder's other son -- who is chairman, president and chief executive officer of the company and president of the store here -- received immunity from prosecution as part of the plea agreement in the government's action against his father. According to Hollis, Stew Leonard Sr. has resumed an active role in the company. Although he does not have a formal title, "he's still the boss," Hollis said -- involving himself in product selection, merchandising, quality and personnel. "He's been tickled by all that went on while he was away and how well everyone held down the fort during that period," Hollis said.

The company has also been a target of United Food and Commercial Workers Local 371, which has been trying to organize workers at the Norwalk store for several years. Earlier this month, in a settlement with the National Labor Relations Board, the company agreed to post notices in the Norwalk store concerning employees' rights to form a union. That agreement did not constitute an admission of wrongdoing.