Jefferson Pedersen has taken a concept originally tested by NASA—color-changing technology—and helped develop it into a $42 million retail business. But the 31-year-old CEO gets his biggest reward in the delight that his merchandise—which changes color in the sunlight—brings to people of all ages.
“One of my favorite parts of this business is the smile that comes over a person’s face as they watch one of our products change color,” said Pedersen, president and CEO, Del Sol, Sandy, Utah. “I call it our ‘wow guarantee.’”
Del Sol was founded in 1994 (Pedersen’s brother-in-law was one of the co-founders) as a push-cart mall operation. When Pedersen joined, in 2000, it had five free-standing stores.
“I learned the retail side of things in St. Martin, running the Del Sol store there with my wife,” he said. “Later on, I came back to the States and was put over sales and marketing.”
Young, enthusiastic and highly energetic, Pedersen sensed the company’s potential and set about expanding its product line and retail portfolio. In 2003, he bought 25% of the business and took over as president (in 2006, he bought out the majority share).
Today, Del Sol operates 100 stores, half of which are located outside the United States, primarily in cruise-ship ports in the Caribbean and Mexico. Customers can also buy goods on its Web site.
President and CEO Del Sol Sandy, UtahAnnual sales: $42 million (est., 2007)Type of business: Manufacturer and marketer of color-changing productsNumber of stores: 100Areas of operation: United States, Mexico and the Caribbean
“Sunny tourist destinations are our main target,” Pederson said. “We are heavily promoted on cruise ships.”
Stores average 1,000 sq. ft. and sell privately branded apparel and accessories, from nail polish to board shorts and sweatshirts to sunglasses. The products change colors when exposed to sunlight (the colors change back once indoors). The average store transaction is around $40.
“About 50% of our sales are in apparel,” Pedersen said. “We print about 1.5 million shirts annually.”
Apart from 10 corporate-owned locations, Del Sol stores are independently owned. The company has exclusive arrangements with storeowners whereby they can sell only its products and the company, in turn, doesn’t sell to anyone else in the market.
Del Sol expects to open 20 to 25 stores in 2008 (airport locations are new to its real estate strategy). Plus, the company will unveil an interactive concept, Sol Kids, in three locations.
“We think the market can support 300-plus Sol Kids,” Pedersen added.
To date, all of Del Sol’s growth has been funded organically.
“We could grow a lot faster—I get about three to five calls a week from private-equity companies and venture capitalists wanting to invest,” Pedersen said. “But I think we’ve done things the smart way in not giving up any control. We may change that strategy, however, to grow Sol Kids.”
Pedersen credits the people in his organization to his success.
“People make your business,” he said. “Whenever I hire someone, I make sure of three things: first, that I can trust them; second, that they have a burning desire to succeed; and third, that I enjoy working with them.”
CompUSA may get a new look
ADDISON, Tx. After opening a new format store last month, CompUSA may be changing the format of its other stores, depending on customer demand and product interest.
According to reports, the elements found in the prototype store, located in Texas, will be incorporated into other CompUSA locations across the United States.
The nearly 7,700 square-ft. relocation site includes an Apple shop featuring Mac computers, iPods and Apple accessories, and a full-length LCD TV wall.
Additional expansions include extended gaming, which includes an entire wall devoted to the Nintendo Wii, PlayStation3 and Xbox 360 gaming platforms, plus a PC gaming setup to test equipment and play new titles.
While businesses can get their share of support with a specialized services section, all consumers can visit the store’s redesigned IT support area.
“This new store aligns CompUSA’s vision to better serve its three core customers, the technology enthusiast, educated professional and small and medium businesses,” said Gabriela Villalobos, the retailer’s sales and operations evp.
CompUSA announced in April that it would narrow its focus to three core customer groups rather than try to serve a mass audience.
The move was part of a comprehensive restructuring, initiated last February, that included an overhaul of senior management and the closure of half its store base as the privately held chain looked to improve sales and profitability.
Walgreens withdraws from CVS provider plans
DEERFIELD, Ill. After many months of talks over low and below-market payment rates by CVS Caremark for four prescription plans, Walgreens has withdrawn as a pharmacy provider from the plans.
Patients affected include members of prescription benefit plans managed by CVS Caremark for ArcelorMittal, Johnson Controls, Progressive Casualty Insurance and Wisconsin Education Association Trust.
Most of the affected members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.
Trent Taylor, president of Walgreens Health Services, the managed care division of Walgreens, released the following statement:
“This is not where we wanted negotiations to lead,” he said. “We’re sorry that our pharmacy patients and CVS Caremark’s clients are caught in the middle, and we’ll do all we can to ensure a smooth transition for our patients to another pharmacy. Meanwhile, we’ll continue to work on resolving this issue with CVS Caremark.
“Leaving a benefits plan is an extraordinary step for us, but it demonstrates how extraordinarily low our payments were from CVS Caremark. We can’t continue accepting reimbursement rates that are drastically below market, while offering patients needed special services such as 24-hour pharmacy access and drive-thru pharmacies.”