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Battery store boasts earning power

What came first, the battery or the electric generator?

Fact is, neither Edison nor Tesla could have electrified the nation without a battery to capture and store juice for study. A century later we're tethered to the two-century-old battery more than ever.

Today's average home is stocked with 30 battery-powered devices. Research suggests the typical American keeps at least two (wristwatch and phone) within five feet, 24/7.

Such obsessions frame a recession-resistant retail business model so simple it's surprising that few seized the opportunity as firmly as Batteries­Plus.

After hitting $199-million in sales in 2007, growth slowed this year to a robust 12 percent in stores open more than a year.

BatteriesPlus sells little more than batteries: 1,200 kinds in each store; 12,000 more stored at a warehouse; 40,000 types if you include custom orders.

"Batteries are in everything," said Dan Snyder, 31, who owns three of six franchised BatteriesPlus outlets in the Tampa Bay area. "If we can't get it, we'll make one."

He has an aerospace degree but is following the footsteps of his parents, who own six stores in Minnesota.

People whose battery IQ ends with the Energizer bunny might not get it. But anyone who searched for a garage door opener battery knows the quest is like figuring out where to go when your car's towed.

Keyless entry remotes alone take 20 kinds of batteries.

Once a customer strikes pay dirt, Batteries Plus hopes they'll be back for hearing aid batteries, $3.95 watch batteries, $20 rechargeable drill battery packs and $29.99 iPod batteries.

Batteries Plus started in 1988 when two Wisconsin after-market auto parts retailers noticed customers perplexed at tracking down odd battery replacements. "Back then it was auto and marine batteries and those first car phone batteries as thick as a baseball bat," said Russ Reynolds, chief executive. "It's uncanny how the selection exploded after the cordless phone."

Today the selection ranges from 39-cent batteries the size of a nailhead to a $5,000 forklift rig as big as a grocery cart.

Selling batteries means taking them back for disposal regardless of where they were sold. The path to the recycling bin is filled with prospective customers who buy batteries by the gross. "Somebody's always in here with five buckets of dead batteries," said Snyder.

At less than $300,000 to open, it's an inexpensive franchise with average store sales of $650,000.

Batteries Plus stocks the old A to AAA standards from Rayovac and Duracell but does not underprice discount stores. But its store-brand selection is 10 to 40 percent cheaper and fits more exotic species in camcorders, cordless razors and PDAs.

It's a deceptively risky business. Batteries have a long shelf life, yet BatteriesPlus can see up to two-thirds of its top-selling lineup change in one year. If prices get too high (they are edging up now), shoppers buy new devices rather than batteries.

Reynolds sees battery choices getting even wider. The current three chemistries will give way soon to six. It's about playing catch-up with portable device makers packing more features into ever smaller devices faster than battery capacity expands.

"We'll sell fuel cells in five years, not for cars but appliances," he said. "Every appliance that runs on AC will have a battery option. If you can't hide a lamp cord, you won't need one."

Mark Albright can be reached at albright@sptimes.com or
(727) 893-8252.

BatteriesPlus

. Size

320 stores, including six franchised stores in Tampa Bay; 300 more planned in five years.

. Revenue

$199-million in 2007; forecast
to be $225-million in 2008.

. Franchise fees

4 percent royalty
plus 1 percent marketing fee

. Owner

Atlanta-based Roark Capital (named for an Ayn Rand character in The Fountainhead), which franchises Moe's Southwest Grill, Cinnabon, Microtel Inns, Carvel Ice Cream and Seattle's Best Coffee.

Battery store boasts earning power 04/22/08 [Last modified: Wednesday, April 23, 2008 12:18pm]
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