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EXTON, PA-Olly Shoes, a Toronto-based, multi-brand kids’ footwear retailer with a proprietary “fit” system, has stepped into the US market with headquarters here and five retail units along the Washington DC/Philadelphia corridor. “On the conservative side, we plan to open from 10 to 12 stores a year in the US,” says Paul Bundonis, president and CEO. “Depending on their initial business success, that number could move upward to 20 or 30 a year,” he adds. Olly opened its first store in the Toronto market in fall 2001 and followed with a second there the next year.

Last year Olly entered the US with a 2,100-sf store in the Main Street lifestyle center here, followed by a 1,127-sf store at Fair Oaks Mall in Fairfax, VA and a 1,100-sf unit at White Flint Mall in Kensington, MD. Last month it set up its US headquarters and opened two stores nearby at Marple Crossroads Shopping Center in Springfield, PA and Airport Square in North Wales, PA. Two more may come on line in this market next spring.

“Philly’s been a great market for us,” Bundonis says. Brandon Famous, president of Conshohocken-based Fameco Real Estate, represents Olly in this region. Larry Hoffman and Scott Yurow of H&R Retail, which has offices in Baltimore and Washington DC, represent it in the DC market. “In fall 2005, we plan between eight and 10 additional stores, all within the corridor between Toronto, Philadelphia, and Washington,” says Bundonis.

“We’re targeting markets with good incomes and lots of kids,” he explains. As for Greater Philadelphia, he adds that both he and Olly co-founder Tom Stemberg, the founder of Staples, are natives of this area. Staples also got its early start in the region.

Olly has two formats. One calls for about 1,200 sf in strip centers and malls. The other requires about 2,100 sf in a freestanding or lifestyle shopping environment. “I like the bigger format,” Bundonis says, “but that’s not always affordable, and our primary concern is to be where moms and kids like to shop.”

He projects a minimum of 60 units or as many as 130 in the US by 2009. “Under either scenario, we will remain in the Northeast, north to Boston and south to Atlanta,” Bundonis says. “We’re definitely looking to develop one market at a time with multiple units.” Within the next 10 years, however, Olly plans to have about 250 US stores, “coast to coast,” he says. (Bundonis declined to provide details on how the company will fund the rollout.)

Stemberg co-founded Olly Shoes four years ago with Katherine Chapman, the one-time owner of a company that supplied easels and other products to Staples. The idea for Olly grew from the founders’ own frustrations in buying shoes for their kids, says Chapman, Olly’s CEO. “Shopping for kids shoes ranks as one of the worst experiences for moms. There is no universal sizing system in the shoe industry,” she says. “A size seven in Nike will not have the same fit as a size seven in Reebok.” To counter such discrepancies, Olly staffers measure, by hand, the inside of every brand and style of shoe the stores carry and enter the information into a database.

A patented, computerized Ollyscan system is used to measure and record the size and shape of a child’s foot and feed that information into the database to search for matches. When the child’s Ollyscan result is compared against the database, the computer prints out, within seconds, a list of available shoes that provide a perfect fit. “It will tell us that a child might need a seven in one brand and style and a six-and-a-half in another,” Chapman explains.

Although footwear analyst John Shanley of Bala Cynwyd, PA-based Susquehanna International Group does not follow Olly, he confirms, “parents are increasingly concerned about proper fit, because pediatricians are encouraging parents to pay more attention to fit instead of just buying kids a pair of sneakers. Athletic footwear,” he says, “accounts for 85% of all children’s shoes.” Because of this growing concern among pediatricians and parents, Shanley says Stride-Rite, a company he does track, “is putting much more emphasis on fit and customer service that supports selling children’s shoes with a better fit. The concept, if it works, is sound,” he adds.

Olly carries more than 20 brands of dress, casual, and athletic shoes for boys and girls from infant to age 12. Among the brands are Adidas, Bass, Sam & Libby, Timberland, Nike, Skechers, Nina, New Balance, Reebok, Geox, and Robeez. Prices range from about $20 for some infant sizes to more than $100 for Nike’s for older kids. Stores also carry socks, games, dolls, a line of girls’ toiletries, and some gift items.

The stores are designed to make the shopping experience fast, easy and fun, company executives say. Little kids ride a train to have their feet scanned. Aisles are wide enough to accommodate strollers, and there is a kids’ play area. Shoes are openly displayed. “We encourage kids to try them on and walk or run around in them,” says Bundonis. Any stores where moms and kids shop makes a good Olly neighbor, he adds, citing photo shops, child-friendly, family restaurants, grocery stores, Toys R Us, Old Navy, and barber shops with a kid clientele.

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