Hunt for Toys Leads to Retail Chain

VedomostiYermakova said the three Malenky Geny outlets in Moscow attract hundreds of visitors per day, not all of whom are parents.
Albina Yermakova got tired of looking for learning toys for her son, so she created her own store.

Malenky Geny, or Little Genius, has now grown into a three-outlet chain, with hundreds of customers every day.

"Honestly, we did not expect things to go so well," Yermakova said, adding that she chose the right time to go into business.

"The idea of using games that help learning has become popular," Yermakova said. "Today parents are ready to do anything for their child."

An actress by profession, Yermakova still performs at the Yermolovaya Theater once a week.

But that job is far from perfect, she said. "You're very dependent in that profession. If you aren't given a role, you're left sitting around, and I just can't sit around idly."

After deciding to build the store, Yermakova spent a year looking for a location and for $50,000 in starting capital. She borrowed half the money from her sister, an executive at an oil company, and together they chose the name and registered the company. That first store occupies 160 square meters, partly in a cellar, on Bolshoi Kozikhinsky Pereulok.

It took another year to renovate the place, Yermakova said, but its central location near Pushkin Square makes advertising largely unnecessary. The store has placed ads in specialized parenting magazines including Ulitsa Sezam and Nyanya.

News of the store was mainly spread by word of mouth, Yermakova said, and not until a year ago did Malenky Geny rent advertising space in a nearby metro station.

Yermakova ordered custom-made equipment for the store, but she ran into problems when she tried to stock it with toys, she said. Very few toys were produced locally, so she had to go to the companies herself and convince them to make more.

Yermakova asked the Snark company to make children's chemistry sets. "The chemistry sets are selling like hot cakes," she said, adding that science toys are very popular.

Now finding locally produced learning toys is easy, she said, and in the last three years a number of companies have begun making audio books and puzzles.

Russian Nails, puzzles where nails are knotted together and then freed, are quite popular, she said, as are traditional wooden Russian toys.

Malenky Geny also purchases Russian versions of Western toys, which differ greatly, Yermakova said. Western toys are usually more "technical, something that moves and flashes. Our toys are more ecological, more homey and cozy."

It took only a week to hire personnel, and out of 50 people who applied only 10 were chosen, she said. "I ask the staff to be naughty. You have to relax here and feel like a child."

About 100 to 150 customers visit the original store every day, and they're not all parents, Yermakova said. Some people stop in to browse but rarely leave without a boomerang, a wooden puzzle or a book.

The store has also organized a children's cafe and special classes.

The store paid for itself after a year and could no longer handle the large volume of customers, so Yermakova began building a chain.

A second Malenky Geny with a floor space of 244 square meters on two floors opened in an Otradnoye shopping center in the summer, and a 400-square-meter outlet opened on Ulitsa Akademika Korolyova in the fall. The three stores together employ 50 people serving 350 to 400 customers per day with an average purchase of 100 to 150 rubles.

The stores host parties, and the Otradnoye administration even offered to lease floor space at bargain prices in exchange for making a game room for the shopping center's customers.

The stores in the center require a different approach than at Otradnoye, Yermakova said. Huge customer turnover at the shopping center makes for good sales but ruins the cozy atmosphere.

When the product is as specific as educational toys, it is better for the customer to intentionally come to the store, she added.

The store on Ulitsa Akademika Korolyova is poorly located, said Yermakova, who plans to spend around $5,000 per month advertising it in parenting magazines.

"We might put an ad on a trolleybus," she added.

The company does not yet have a marketing specialist, and advertising is handled by the same employee that organizes children's parties, Yermakova said.

"Our weakness is that we can't organize our business scientifically, a lot of what we do is plain enthusiasm."