Third generation retailer carries on family business

William and Helene Penning, circa 1940, selling their wares. The county fair had mini-trade shows for local retailers and Tot Shop had a booth at the fair.

The first Tot Shop—after a small fire they gutted the building, renovated it and used the front part as the store.

Tot to Teen Today

William’s store was in his home for awhile and then moved to a retail building. Robert moved the business across the street to a larger building and eventually moved to the other end of town.

“In 1964 there was a lot of development on the south side of Kalamazoo; the first chain discount store came to town and my father saw the writing on the wall and opened a store right across the street,” Dave said. “The best place to be is right beside your competitor and he recognized that early on.”

About 15 years later, when shopping malls started popping up, Robert opened a second Tot to Teen Village in the mall, and that’s where Dave started out when he entered the business. It eventually closed.

Dave, like so many third generation retailers, says he was born into the industry, though his intentions weren’t to become a retailer.

“I graduated college with a degree in physics and math,” Dave said. “I worked in the store during the summers in high school and then when I went away to college I’d come home on the weekends to work.”

During his senior year of college, when there were still two locations, Dave worked at the mall location on the weekends and during the week after class. A few months after he graduated college in 1974 his father ended up in the hospital and Dave stepped into the business even more. Although he was accepted into the engineering school at the University of Michigan, Dave turned to retailing full time.

“I came up through the ranks doing everything,” Dave said. “I was pretty much in sales and on the floor; there were managers over me and slowly I got into more of the accounting end of the business, working with the bank, working the loans, paying the bills/invoices and my father pretty much stayed with the advertising side of things and setting the budgets.”

Robert gradually stepped back from the business over a period of 15 years, and Dave bought the business from him about 12 years ago.

Clothing (girls to size 14/boys to size seven) accounts for 40% of the business.

Furniture obviously is a major part of the business, gear represents about 20% of sales and apparel accounts for 40% — it’s a huge category for the retailer. And, unlike many retailers who carry clothing in their infant/youth stores, Tot to Teen carries clothing up to size 14 for girls and up to size seven for boys.

Dave says he thinks people shop Tot to Teen not only because of its long history but also because of their customer service. He admits they’ve always had a reputation of being expensive, a common issue among many independent retailers, but says when you compare the product selection they do still offer prices in line with other retailers, especially in apparel.

Though sales have been flat this year overall, Dave says they’re better than they have been the last few years. Michigan in general has had a sluggish economy for several years now, and in his market in particular people are moving away.

“Pfizer came to town four or five years ago and bought up our local big drug company and we’ve been losing jobs and population since then,” he said. “The white collar jobs that are being lost are our target consumer.”

The slump in the auto industry obviously impacted the state’s economy, but the ancillary industries were also hit. Dave feels that perhaps Michigan is now ahead of the curve compared to the rest of the nation and might just be coming out of it.

Over the next decade Dave sees things changing and says it wouldn’t shock him to see more domestic furniture production take hold. His hope when it comes to gear, a category that’s becoming more difficult for brick-and-mortar stores to sell, is that the manufacturers realize selling to the Internet retailers is a double-edged sword.

Gear represents about 20% of the business; creative displays inspire shoppers.

Tot to Teen doesn’t have a Web presence, though Dave plans to develop one; he also studied computer science and would rather build his own Web site than outsource it. But even in the day-to-day operations, technology doesn’t play a major role.

“We’re a very low-tech store,” he admits. “For example, 40% of my business is clothing. Clothing changes at a minimum of every six months. If we used technology more we would need a full-time entry person just to do the inventory for clothing.”

Dave reaches his customers with advertising and typically allots about 5% of his budget to do so, though this year he’s trying to keep it to 4%. He’s used all types of media through the years and currently is using the local newspaper and direct mail. He also uses the Oh Baby magazine and mails it to customers within a 50 mile radius and participates in a local coupon book, which he gets great results from; “It’s been as effective as anything else we’ve ever done,” he said.