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ALL DOLLED UP

Preteens fuel growth of makeover retailer Club Libby Lu

BY KIMBERLY PFAFF

It’s always party time at Club Libby Lu, where girls flock to be transformed into the pop stars, rock ’n’ roll chicks and princesses of their dreams — if only for a day.

The Chicago-based tween retailer specializes in theme birthday parties and makeovers. Sure, the girls can buy beauty and bath products, casual and dress-up clothes, jewelry, shoes and accessories here. But it’s the experience of being pampered and all made up along with your closest friends (or maybe even your mom) that keeps these preteens coming back.

“Nobody needs another specialty retailer selling stuff,” said concept founder and CEO Mary Drolet, who opened the first Club Libby Lu store in August 2000. “So we really focused more on being an experience-driven retail business.”

Club Libby Lu customers — the company calls them VIPs, for Very Important Princesses — range in age from 5 to 13, though 8 to 11 is the key demographic. Party packages cost $20, $25 or $30 per person, and include a makeover, games, group dances and sing-alongs. Each girl leaves with a new look, a gift bag of accessories and memories of a totally cool day.

All this caught the eye of Saks, which snapped up the concept in May 2003 for $12 million. Today there are 22 mall-based Club Libby Lus and six located within Saks department stores. With Saks behind it, the chain has ramped up its expansion goals; it plans to open 20 additional mall stores this year and 15 more in-store Saks units.

Most of the stores are located in the Midwest, but the chain recently opened four on the East Coast and five in Texas. Drolet says the company is now moving into the West, including California, and the South.

Though Saks would not disclose sales figures, an article in Women’s Wear Daily cited industry sources who said that Club Libby Lu annual sales could reach $30 million by 2005 and that sales per square foot reportedly exceed $600.

Each store is organized into four sections: Libby’s Bedroom, which offers bedroom accessories, casual wear and sleepwear; Libby’s Laboratory, which features bath and beauty products; Libby’s Jewelry box (charms and jewelry); and The Style Studio (apparel, shoes and accessories). An interactive, design-your-own element adds to the appeal. If they wish, the girls can whip up their own batch of nail polish, lip-gloss, body glitter, lotion or shower gel, for example.

“It’s about fantasy and playing and having a great time,” said Drolet.

But the experience is by no means designed to be a once-in-a-lifetime one. Girls can be assured of finding something new each time they visit the store. “We’re constantly flowing something new out, constantly changing the assortment, so the kids don’t get bored,” said Drolet.

Keeping things fresh and on target is certainly important with this age group. “The tween sector is a very fickle sector,” said Barbara Ashley, president of Retail Ventures, a New York City–based retail consulting firm. “It’s also one that moves through that age range very quickly. One minute they’re little girls, the next minute they’re teens, so it’s hard to catch them right at the ideal moment. It’s a very difficult business, and it takes a very fast-moving, savvy retailer to be able to maximize that business, grow it and sustain it.”

Drolet, a former Claire’s and Montgomery Ward executive, knows this only too well. “You’ve got to move with the customer or you’re not in the game,” she said. “The tween segment is actually a little easier than the teen market, which is much more fickle.”

To keep in touch with her tween side, Drolet says she and her staff “live it” every day, from watching every movie for this age group and staying tuned to the Disney channel, to holding product contests. They also spend a lot of time out on the sales floor. “We’re out there watching our customers and interacting with them,” Drolet said. “That’s a major source of information that a lot of retailers forget as they grow.”

The chain is focused on expansion in malls, though it will consider other options, such as lifestyle centers and downtown locations. “Our first priority is to get into the top-volume malls in the country, and we still have a ways to go,” Drolet said.

The stores span from 1,400 to 1,600 square feet, and the chain prefers a high-profile mall location, whether that happens to be near other tween retailers or not. “We don’t spend heavily on promotions, so we rely on the mall’s traffic,” said Drolet.

Still, despite all the recent fanfare about the tween category, some retail watchers believe that the preteen category as a whole is overrated. “I read endlessly about how much money [tweens] spend, and I’ve had some doubts about this,” said Howard Davidowitz, who heads Davidowitz & Associates, a national retail consulting firm based in New York City. “I’m not saying they don’t do tons of shopping. I think they do. But this customer is subject to cuts in their allowance — that’s not exactly a rich customer. So I’ve not always been as positive as some other people.”

Mall developers, however, are decidedly upbeat about the category in general and the Club Libby Lu concept in particular. General Growth Properties has eight Club Libby Lu stores in its portfolio, and additional stores are in the works.

“I was out looking at malls last week, and I walked by the store, and it was absolutely one of the busiest stores in the mall,” said Robert A. Michaels, president of General Growth. “I don’t look at [tween concepts] as an economic-sensitive category. When we’ve had downswings in the economy, it seems that parents still want to make sure their children are taken care of.”

When Saks bought the chain, some industry watchers worried that the essence of Club Libby Lu would be diluted. Instead, Drolet points out, Saks has brought a built-in infrastructure that has not only improved the chain’s point-of-sale and back-office operations, but also expanded its warehouse and distribution capabilities.

Drolet remains very much the creative force at the helm, though, tapped into the tween mindset and tuned in to her own inner princess. “The concept,” she said, “is not changing.”