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Beyond Child's Play: Acquiring A Small Toy Store Chain In A Recession

The Ark Toy Company | Taking the Pulse

Gerald Johnson's professional career began in the oil industry. But when his employer asked him to move one too many times, Johnson decided to trade big business for small. A two year search led Johnson to The Ark Toy Company, which he bought despite the economic downturn. Ark Toys sells unique toys at three stores in the San Francisco Bay Area. Correspondent Sumi Das visited Johnson to find out how IT is helping streamline the back office and realize his ambitions for the business without compromising the store's whimsical charm.

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Tags: Recession, Store, Gerald Johnson, Ark Toys, Professional Development, Operational Accounting, Strategy, Career, Finance, Management, Information Technology, Small Business, Downturn, Web Site, Inventory Management

 

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Beyond Child's Play: Acquiring A Small Toy Store Chain In A Recession

Gerald Johnson's professional career began in the oil industry. But when his employer asked him to move one too many times, Johnson decided to trade big business for small. A two year search led Johnson to The Ark Toy Company, which he bought despite the economic downturn. Ark Toys sells unique toys at three stores in the San Francisco Bay Area. Correspondent Sumi Das visited Johnson to find out how IT is helping streamline the back office and realize his ambitions for the business without compromising the store's whimsical charm.

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>> Which one was it that you want again?

>> That one.

>> This one here?

>> Yeah

>> Sumi: Gerald Johnson is a self-professed big kid. In the summer of 2007 he bought the ideal small business for his young at heart attitude, Ark Toys, but now he's facing very grown-up challenges, how to expand the business in the midst of a financial crisis.

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>> Gerald: I love my product and what it does, I mean it's toys.

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>> Sumi: Gerald Johnson and Ark Toys are a well-matched pair. The company sells classic toys at 3 stores in the San Francisco Bay area.

>> Gerald: We have toys that you can't find at the big box marketers, that's why I exist because what we sell you can't find anywhere else. When I walked in the door the first time I was like wow this is it, the profits were right, the sales were right, it was priced right.

>> This is probably one of my favorites.

>> Sumi: Johnson has owned the business for 6 months during a very shaky economy.

>> Gerald: How much was the overtime?

>> It was a little bit less this pay period.

>> Gerald: It has affected our business but it has encouraged me to double down on what my original business.

>> Sumi: An immediate goal for the company is to branch out into eCommerce so the website essentially becomes another store it's one way Ark Toys can grow without the overhead and investment of a bricks and mortar store.

>> Gerald: I want to have a website as well as a Internet. The website before might have been gravy now it might be not as much gravy but it'll also help balance out anything you might lose in any one of your retail locations.

>> Sumi: Johnson's business plan also entails managing inventory more efficiently which includes everything from ordering, receiving and tracking to stocking shelves.

>> Gerald: You want to have enough toys for the customers but you don't want to be stuck because you over-ordered, you don't want to under-order.

>> Sumi: To strike that perfect balance Ark Toys plans to automate their purchasing using IT.

>> We had typically been using the software system as a glorified cash register. One of the things we're looking into doing is having an auto purchase order system helping us make these decisions, setting mins for the inventory.

>> I'm an evil squirrel.

>> Sumi: With IT Ark Toys should never run out of their extremely popular glitter balls. IT is also helping Johnson with his marketing allowing him to identify and maintain a database of his most loyal patrons.

>> Gerald: Approximately 40% of our customers are frequent buyers so we're trying to focus in on our best customers 'cause they're our most profitable customers. We're also getting additional information about those customers so we can be smarter in the future about how to attract those customers.

>> Sumi: Johnson has spent approximately $80,000 on IT an investment he hopes will increase sales from roughly $3 million to $5 million a year.

>> Gerald: In order to leave something for my children I have to make long-term decisions. Don't break anything. I got to make good decisions, long-term decisions and not short-sided ones.

>> Sumi: Decisions that will help Ark Toys ride out the economic rollercoaster and optimize operations.

>> Do me a favor organize that for me get that nice and neat.

>> Sumi: For BNET I'm Sumi Das.

>> Gerald: Thank you.

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==== Transcribed by Automatic Sync Techologies ====