New York, New York
Dan Silna must be one of that breed because for almost 20 years he and Jeff have been quietly running their 12 metro area stores, plus Hawaii, successfully and profitably.
How do they do that? I'm not so sure the Silnas would agree, as they have to deal with the complexity of running such a chain, but I think their success is in the old saw, KISS-Keep It Simple Stupid.
When we all got started in this business back then, the service we provided was basically C-41 d&p, enlargements and reprints. The rolls rolled in. So did the dollars. Over the years, as the number of one-hour outlets proliferated, the roll counts started a downward trend that became so small for some that they threw in the towel. The challenge was to find new services - and the money to buy the equipment to supply these services. The number of independently owned one-hour locations dwindled as many could not meet the test.
I visited the Fromex 86th street store (between Lexington and 3rd avenues). While most see Manhattan for the tourist mecca that it is, the island is made up of numerous neighborhoods defined either by ethnicity, religion, race, income, etc. 86th is The Upper East Side, an upscale locale where you're more likely to see women pushing strollers than suits carrying attach cases. Not a tourist in site. Only apartment buildings rising 20-30 stories with lots of people.
This Fromex location, the only one I personally visited for this column, reminds me somewhat of those easy days when d&p was king. The counter was busy - on both sides - as I saw a staff of seven scurrying around doing their thing. There was a rather modest display of albums and frames, almost all in glass-door wall displays, with about 12-15 similarly displayed cameras. And the usual cubbies of film and batteries. The counter tops were uncluttered by displays and cleared for action and the only promotional material I saw were signs and balloons themed to Fathers Day. Digital work stations were located to the right of the entrance and all of the processing equipment was in the rear. E-6 and b&w are processed on basement equipment.
A store better equipped to providing customer processing services than selling merchandise off racks, as I said, Silna keeps it simple. I was told that while the Manhattan stores are relatively "understated," the mall locations do the usual share of in-store merchandising activity.
Does the formula work? According to Dan, this store is the jewel in the Silna crown that represented a sales level of $1.175 million in 2000. How important is d&p here? Wanda Gonzalez, the Fromex general manager, a 10-year veteran with the chain, said it was "about 60%, maybe higher." "It used to be more." She said that on a 'good' Monday the store will handle in excess of 300 rolls.
These numbers are not the best that 86th street has seen. The opening of an upscale Wolf Camera store, also on 86th street but an avenue away, and the addition of on-site equipment to 86th Street Photo, an old-line full service camera operation, has had its impact on this Fromex. Sales for last year were down 3.1%, Dan said, and were soft for the January-April period this year but May set a sales record of $106,000.
According to Dan, who is president and CEO of Alaten, Inc., Carlstadt, NJ, the firm's corporate name, sales for all 13 stores last year amounted to $7.3 million, up 1% from the previous year. That's an average of $560,000 per. Yes, there are weak links: the store in Garden State Plaza, a regional mall in Paramus, NJ, only did $250,000. Profitable chain? Dan said, "Yes, every year except those in which we had to make heavy investment for new equipment."
The makeup of the Fromex chain requires Dan and Jeff, who serves as chief marketing maven, to deal with a myriad of retail challenges. On one hand there are eight Manhattan locations between 45th and 86th streets - none catering to a tourist trade. Then, there are four regional mall locations, two in New Jersey and two in New York, and the Hawaii store. The mall locations are easy enough for many lab owners around the country to identify with; not so with the Manhattan sites. How is Manhattan different? "It's a lot more hectic and demanding."
How does a photo specialist such as Fromex set pricing in the Manhattan jungle? After all, there are competing stores on every east-west street and north-south avenue, both on-site and dry labs, offering everything from 1/2-hour to overnight service and signs shouting $2.99-$3.99 per 24-exp. roll. Enough to drive one to drink - or at least to the poor house if you try to compete on price.
Fromex never gave it away and still doesn't. A 35mm, 24-exp. one-hour roll sells for $11.63; APS, if all 'H' size, for $12.64; reprints are 99-cents same day, 69-cents next day; one-hour 5x enlargements sell for $7.98 and 8x for $14.98 or they go as low as $3.99 and $7.49 for two-day turn. Mall stores, according to Dan, price a bit less. Dan said that he hasn't changed his price list in about 4-5 years.
As for the low price offerings, Dan doesn't view this as his competition. "We stress service and quality and our customers remain our customers."
I walked into a Rite Aid store only a few doors from Fromex. They had a Qualex OSP set up as a department near the front of the store. Price for 24-exp. was $6.99. It was unattended and though I stayed there a few minutes studying the prices, no one came to assist me. One for Dan's side.