Some kind of WONDER!-ful

WONDER! co-founders Joe Milano, senior vp/chief merchandising & marketing officer, and Shane Christensen, president. Bill Colaianni, CEO & co-founder, not pictured.

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Some kind of WONDER!-ful

Opening this weekend in a strip mall north of Chicago, WONDER! is certain to awe shoppers. Its founders, however, are betting their novel approach will jolt the industry — sparking a change in the way retailers target shopping parents and their children

By Marianne Bhonslay

The genesis of many retail concepts in the children's arena originates with parents professing they can cater to customers better than the store next door. Venture capitalist Shane Christensen is no different – except that he intends not merely to open a new store, but to alter the way the industry markets to its clients. And those clients, he claims, are not children – but their parents.

"There has not been a ton of innovation in (the children's retail) space," says Christensen, president and one of three founders of WONDER!, a nearly 136,000-square-foot store scheduled to open Saturday, in a Deerfield, IL strip mall of big box stores north of Chicago. Unlike industries such as food and beverage, household and sporting goods, children's retail, Christensen says, has not witnessed an unorthodox approach in the vein of Whole Foods, Costco and the Apple store.

"For whatever reason, children's (retail) has been able to get away with (a lack of novelty)," says Christensen, 36, who worked at one time in the Chicago buying office for Ralph Lauren and has spent the majority of his career as a venture capitalist, including tenure with Fore Front Capital Management, based in Chicago and Boulder, CO.

Adds WONDER! co-founder, senior vp and chief merchandising and marketing officer Joe Milano, "(We were) not finding any magic in the business."

Christensen, Milano and ceo and co-founder Bill Colaianni, a former senior executive with Walmart who worked as the chief marketing and merchandising officer for Walmart Central America, are interested in more than magic: WONDER, LLC's five-year plan details 15 to 20 stores with revenues of $500 million, Christensen says, adding he is currently "looking at locations" for store number two, three and four, and expects the second store to open "relatively quickly."

Christensen believes the "sweet spot" size for his retail concept – divined as he and his wife, Victoria, were shopping with their children, now five and three – is an 80,000-square-foot to 100,000-square-foot store. WONDER!'s inaugural venue is leased from Sears Holding Corporation, which previously operated one of its The Great Indoors stores at this location.

The retail size makes it possible for parents to shop the way Christensen and his wife would like to: with "all products for the first time in the same location."

That assortment includes an estimated 25,000 products and 100,000 SKUs for ages newborn through seven years in 85,000 square feet, while another 20,000 square feet is designed as a play area for children. The product assortment includes everything parents could possibly require or desire for their children, from strollers and safety-related items to clothing, toys, bedding and furniture. The remaining 30,000-plus space is devoted to front office and e-commerce fulfillment.

And while parents deliberate over purchases, they will soon be able to savor sustenance for more shopping and even organic offerings in WONDER!'s in-house restaurant, Bean Sprouts, set to open in January, according to Milano.

"They are (meeting) such a strong need in the marketplace," says Michael Belenky, co-founder and president of Zutano, which will unveil a 200-square-foot concept shop-within-a-shop in WONDER! Noting that the store will have classrooms and an education space, Belenky adds, "It's not only a retail store selling product; it's a place for families to meet."

Vendors don't seem daunted by WONDER!'s size. According to Milano, 33, who worked at Shopbop.com from 2003 through 2009, children's brands are "not scared by the size" of the new store, nor of the potential for their goods to be discounted, as is often the protocol with big box forums.

On the apparel side, WONDER! will stock, among other brands, Zutano, Tea Collection, Kissy Kissy, and Stella McCartney for Kids. Footwear merchandise includes New Balance, Vans, Hunter boots and Emu. Stokke strollers will be carried, along with models from Bumble Ride and Bugaboo. A large selection of toys, diaper bags and other kid gear will also be featured. Only one vendor, Milano says, declined to ship merchandise, preferring to wait "until we open."

"We don't want to be in a place where we're going to dilute a brand," says Milano, who will oversee the store's e-commerce business, pushed back to launch now on Tuesday rather than with the store's Saturday opening. "Maintaining brand integrity on a strategic level is critical."

Adds Zutano's Belenky, "There is no merchandise we are not including (in WONDER!). We put out the best of the best. We're not concerned about price point in that environment. The presentation will be strong. I think (the in-store price is) going to be our regular suggested retail. (They're) not looking to do any markdowns."

And WONDER!'s Chicago location appears ideal, demographically, to cater to its target parent customers.

According to Mike Elam, vice president of marketing for Sierra Group, Inc., a Chicago-based commercial real estate firm that represented Sears as the landlord leasing the property to WONDER, LLC, the most recent demographic profile projects a population of nearly 766,000 within a 10-mile radius of the Deerfield location. Nearly 71 percent of those households within a one mile radius of the store – or 2,515 households – are being projected to report a household income of $75,000 or above and approximately 36 percent projecting to report income of $150,000 or above. Within a 10-mile radius, nearly 72 percent of households are projecting an income of $50,000 or above. These demographics are based on the 1999-2000 census with 2010 estimates, as the 2010 census numbers have not yet been released, Elam says.

"That part of Chicago is considered the North Shore," says Elam. "Deerfield, Highland Park, it's affluent. A lot of families with children live in that area. And the way the real estate market is (now), deals are still out there."

Indeed, the country's current real estate debacle is precisely one of the reasons Christensen and company believe they can be successful in dire economic times.

Although the country is in a "recession," Christensen says, there is "at the same time a genuine real estate opportunity," specifically for locations of approximately 100,000 square feet, as other businesses close their doors. "Without that (real estate scenario), this concept may be impossible," he adds.

Now with WONDER!'s opening, anything in children's retail, much like childhood itself, seems possible.