Boomerang blossoms
Consignment retailer adding four locations with plans to expand across the country
Krista Thompson helps steer consignment chain’s franchise expansion,
With a booming market for affordable children’s clothing, Ottawa children’s consignment chain Boomerang Kids has plans to expand rapidly to become a national retail franchise.
The store, which also plans to open an online shop for its used baby clothing, announced that in coming weeks three Boomerang Kids franchises in Ottawa and another in Toronto will join four existing stores in the Ottawa area.
The retailer hopes to see 20 new Boomerang Kids stores open across the country by the end of this year and an additional 80 by 2017.
“We originally said, ‘We’re going to only offer five units (franchises) in the first year.’ Then, within four months we’d sold five units,” said Krista Thompson, co-owner of Boomerang Kids. “We thought, ‘We have got to go big here.’ ”
Thompson and business partner Heather Meek bought Boomerang Kids six years ago and continue to operate an outlet on Richmond Road in Westboro. Three other stores have been sold to franchise operators.
Thanks to the global economic slowdown, consumers have become more frugal and sales at consignment shops and other discount retailers are booming.
Thompson said the average Boomerang Kids store now sells more than $700,000 worth of resale kids’ clothes, equipment and toys in a year. That’s an attractive offering to a franchisee.
The company is selling franchises for between $150,000 and $200,000 a store. The amount includes the franchise fee.
“Our stores are profitable,” said Thompson. “We are an alternative to the high cost of raising kids. People with kids come to our store, we make it easy to find a great deal.”
The partners say the expansion is being conducted through current cash reserves. However, Thompson said the company may have to seek additional investment in the future to facilitate its ambitious plans.
Further adding to the company’s momentum is its business model. It doesn’t buy clothes. It offers space for parents to sell clothing, toys and various paraphernalia that their children have outgrown. Boomerang Kids get a cut of the sales. But the consignors take home between 40 cents and 50 cents on the dollar, depending on the item.
According to Thompson, Boomerang Kids’ four existing locations pay out more than $1 million in commission cheques to Ottawa area parents annually.
The company is taking things a step further.
Starting this summer, the store will begin offering online sales in a bid to cut into the burgeoning world of electronic commerce.
Thanks to a computerized selling system that helps the chain track its inventory, all of the stock on store shelves will soon be available for sale online.
“We plan to be the Kijiji of children’s resale. People can buy it from our stores and pick it up, or we can ship,” Thompson said.
According to Thompson, part of what has made Boomerang Kids’ successful is the passion she and Meek have poured into the business. The partners agreed that if they were going to franchise their business, they would need to find operators with the same passion they have. As a result, they say they are very picky about who gets to open a Boomerang Kids shop.
They are also intimately involved in the day-to-day business of their franchises.
“We watch their financial progress every day. We talk to every franchisee every day,” said Thompson. “If you look at all the consignment stores that have opened in the last five years, 95 per cent of them have failed. Our franchisees make a profit.”
Boomerang Kids was founded in 1994 by Joan Garvey and Lyne Burton, who sold it to Thompson and Meek in 2007.
The chain carries some new items, such as the popular Robeez baby shoes and some Disney toys. But its main products are used children’s clothing, toys, books and equipment such as strollers and cribs.