The Ikea of Children’s Retail

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Photo: (Wonder!)

Business: Wonder!
Headquarters: Deerfield, IL
Key Figures: Shane Christensen, Founder & Chairman and Bill Colaianni, President & CEO
Concept: Children’s Retail Warehouse

Tired of lugging your young children around town from store to store in search of diapers, baby food, toys and kids furniture?  Venture Capitalist Shane Christensen certainly was and decided to launch an innovative new retail concept: Wonder!, a massive 135,000 sf children’s retail warehouse in a wealthy North Shore suburb of Chicago.

Concept: Children’s Retail Warehouse

Christensen hopes that Wonder! will become the preeminent retail destination for families with children up to the age of seven.  The gigantic store will not only sell the basic child-raising necessities such as diapers and baby food, but will also carry a wide assortment of other merchandise at various price points including strollers, clothing, toys and furniture.  Wonder! will even entertain your kids while you shop with an indoor playground the size of a football field as well as several party rooms.  But wait, there’s more!  All that activity is sure to wear both parents and kids out, so Wonder! will house a restaurant, coffee bar and bakery with future plans for a kid’s hair salon and a beauty shop.

Key Figures: Shane Christensen and Bill Colaianni

What does a venture capitalist know about children’s retail?  The logical answer is not much, but Christensen has a lot going for him.  He came up with the idea of a one-stop shop for kids after he and his wife became exhausted from dragging their kids around town to fulfill their shopping needs.  Besides his frustrating experience as a parent, Christensen knows how to entertain.  He previously co-founded a $45 million boutique entertainment resort in Las Vegas with over 100,000 sf of restaurants, nightclubs, lounges and pools connected to the Venetian and Palazzo Hotel Casino Resorts.

Christensen also made a savvy business decision to help him better grasp the big box retail space.  He hired Bill Colaianni, former EVP and Chief Merchandising and Marketing Officer for Walmart Central America, as CEO and President.  Colaianni has over 30 years of experience in the retail industry having worked for Walmart, Sam’s Club, Coca-Cola and NutraSweet.  He also brings a global perspective to the table with his experience working in the USA, Latin America, the Caribbean, Europe and Asia.

Competitive Landscape and Barriers to Entry

With the seemingly endless number of competitors in the children’s big box retail space, why would Christensen and Colaianni think they stand a chance?  Wonder! aims to break down three main barriers to entry: competition, recession and real estate prices.

While basic necessities like diapers can be found at discounters such as Walmart, strollers and furniture at Babies ‘R’ Us, toys at Toys ‘R’ Us and clothing at indoor playgrounds such as Gymboree, Christensen and Colaianni are banking that parents want a one-stop shop for all of their children’s needs.  They point to experiential retailers such as Bass Pro Shops, Whole Foods and Golfsmith Xtreme as proof that shoppers want a unique and entertaining shopping experience.

Does it even make sense to launch a high-risk multi-million dollar retail concept in the middle of a recession?  Cristensen and Colaianni seem to think so and believe that their target demographic is actually recession-proof due to the demand for basic necessities such as diapers and baby food.  Additionally, their merchandising strategy calls for diversification through a wide variety of products offered at various price points.

Perhaps the biggest advantage that Wonder! has going for it is the weak retail real estate market.  As many retailers closed their stores due to the economic recession, landlords across the country have been left with vacant real estate.  As a result, asking lease and sublease rates have plummeted creating a huge opportunity for retailers like Wonder! to scoop up cheap real estate in prime locations like Deerfield, IL.

Launch of WONDER!

Originally slated to open in November 2010, the debut of Wonder! has been delayed to the first or second quarter of 2011.  Wonder! hopes to open 19 locations within 5 years and up to 200 locations nationwide at maturation.  UPDATE: The grand opening of Wonder! is October 29th and 30th, 2011.

-To contact the writer on this story: Philip Nowak in Chicago at [email protected]

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