On the Rise

01/31/2019
by Claire Sykes

 

It was the last thing they expected: when Yamil Castillo and his wife Sue walked into a Salt Lake City toy store 25 years ago, they not only bought a toy, but also the store itself. Well, almost. It didn’t exactly happen that day, but it wouldn’t be long. The “Store Closing” sign told them that the owners wanted out. And Yamil wanted an “in.”

Forget that he had no experience with toys or running a business. Never mind that he was going to school, working fulltime, and starting a family – all while trying to improve his English. With his language limitations, Yamil had watched opportunities fly right past him.

Not this one. He bought The Red Balloon Toy Store for a song, kept the name, and dove in. He met with reps who guided him, and attended trade shows. He filled the store’s shelves with product, and gradually built a loyal customer base.

Today, The Red Balloon Toy Store boasts five locations in Utah. Yamil’s kids are all grown up, and one of them, David Castillo, is now the company’s vice president.

From The Red Balloon Toy Store in Salt Lake City, David talked to us about all this and more.

edplay: Wow – your family has managed to keep Red Balloon growing for a quarter-century!

We’ve been fortunate. A knowledgeable and friendly staff combined with an exciting product mix has created a base of customers that just keeps returning. We’ve always encouraged employees to engage with people and build those relationships. We do particularly well with customers who know who they’re shopping for, but have not yet found that one toy they can get excited about. Our staff is the light bulb for them.

The store’s tagline, “Smart toys for smart kids,” is also our guiding star for product selection. We only carry toys that contribute to the development of the child and encourage his or her creativity.

They’re also awesome, fun toys! Customers tell us they love arriving at a birthday party with a gift no one has seen before.

What are your bestsellers? 

Our top sellers are novelty and impulse items, then games, arts & crafts, plush, and outdoor and building toys.

We sell a lot of games. Grandpa Beck’s Cover Your Assets has consistently been our most popular for the last couple of years. Classics like Five Crowns by SET are also customer favorites.

Like most toy stores, Crazy Aaron’s Thinking Putty has been a huge year-round seller for several years, along with LEGO, one of our top 10 brands. We also sell a lot of products from Melissa & Doug, Toysmith, and Ty.

Who are your customers?

Mostly moms of children up to age 12. We target stay-at-home moms with TV ads that run during the day. 

What kinds of toys are they looking for?

Ones that fulfill a special need, like helping their child learn the alphabet or how to roll over on their tummy. Or, they want a more involved toy that an older child can stay engaged with longer. 

Where do you get ideas for new products to bring in? 

We go to Toy Fair in New York and ASTRA’s Marketplace, but many ideas come from parents who visit the store and ask for a toy that their kids may have seen at school. Before we bring anything in, we consider the toy’s price point, and playtime and replay values. If it’s good with those, and we think our customers would find the toy cute or fun, we’ll give it a try.

My father does the majority of the buying with my help.

How did he grow Red Balloon Toy Store from a single location to a chain? What was the progression?

The original Red Balloon had been operating in Salt Lake for about 10 years when my parents bought it in 1993. It wasn’t very well-known at the time. A year later, they opened a second store in Sandy, 14 miles away. Just south of that, in 1998, they bought out a toy store in Provo, but it didn’t stay open long due to poor sales.

Skyrocketing rents did the same to the store that replaced it – in American Fork – within five years.

Farther north, the Logan store opened in 2012. That’s now our third location. We opened our fourth in 2014, again in Provo, but in a different part of town.

Our newest store opened in October in a shopping center in South Jordan, a suburb of Salt Lake City. It’s our biggest at 7,500 square feet.

How do your other locations compare in size to South Jordan?

The one in Logan, in a strip mall, is 7,000 square feet. Our stores in Sandy and Salt Lake City, also in strip malls, are each 6,500. The Provo store, in a mall, is 5,500 square feet. Currently, we have 58 employees.

Do each of the stores have a different product mix?

No, it’s pretty much the same, although the stores in Logan and Provo – both college towns – sell more games. Asmodee board games, especially Catan and Ticket to Ride, sell well at the Logan store.

The Salt Lake, Sandy and South Jordan locations have the highest volume. The Provo store, because it’s in a mall, sells a lot of Toysmith’s low-priced novelty items – from bouncy balls to kazoos – along with other toys in the impulse category.

What is the biggest challenge of running multiple toy store locations?

Well, it’s a challenge to bring in new customers. We may address that in the future by selling products that have more mass appeal. People will come in for those, then see our wide assortment of specialty toys.

But the biggest challenge for me, personally, is prioritizing my time while wearing several hats – buying, human resources, marketing, building the website, and strategic planning. Balancing all of those takes time and mental energy. For instance, if a store manager is having a tough week, I want to listen and then think about how we can help. That takes an emotional toll because I care about my staff and the challenges they face, too.

I find that what works best is spending 80 percent of my time bringing in tomorrow’s sales and 20 percent of my time bringing in next year’s. But then the phone rings and it’s a manager who needs help with inventory or has staffing issues, or they’re low on a certain brand and we need to buy more product. Sometimes resolving these issues takes time and then I can’t remember what I was in the middle of doing before the call!

Especially now that we have five stores, my dad and I recognize that it’s important to delegate to our managers and other employees. We choose the ones who are most likely to succeed at the task; the ones who have grown with our company and have the skill sets we need. And then we trust them. Delegating helps them feel valued because they’re allowed to exercise their strengths and they’re recognized for what they bring to the table.

In 2014, I learned and wrote some code, letting a cloud application handle the more tedious parts of the business. One of the biggest – recording the steps from purchase order to product on the shelf – became automated. As a result, we were able to cut the hours we normally spend on that process by just over half.

The system also keeps track of which product lines sell at prices close to cost or less than online prices. We “scrape” our product list and grab Amazon pricing on those items. If it’s a price battle we don’t want to fight, we won’t carry the product anymore.

Automated metrics, which includes sales history, helps us allocate the right amount of product to
each store.

Do you plan to open more stores?

We hope so, eventually. Meanwhile, thanks to website improvements, we’ll be able to draw more sales volume online, as if our site was a sixth brick-and-mortar store.

What do you like best about your job?

The toys themselves. And problem-solving. It’s so fulfilling being faced with a challenge and then overcoming it. I also like knowing that no matter
what I’m doing, every day is different.

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