This one is a few weeks old, but it’s so interesting! As part of their “Retailer Week” feature, ICv2’s Milton Griepp interviewed Mike Dreese the co-founder of Newbury Comics, a 30-store chain of pop culture stores around the northeast.
I thought this was super interesting because while there is always talk about a “chain of comics shops” Newbury Comics actually is a chain of comics shops….except for a long time it wasn’t. I have never been in one, but my understanding is that for a long time they sold mostly music – the comics in the title being a vestigial remnant of a former product mix.
It turns out that the chain has now become more of a general pop culture destination, with a lot of manga, anime and the like. Despite being a fairly prominent player on the scene, I never see Newbury spoken about in comics retailing circles – Griepp himself discovered it on a vacation. But Dreese had a LOT to say about evolving and surviving….and being successful along the way – chain is doing $70 million in sales, but could even hit $100 million this year.
A few excerpts but, as always, READ THE WHOLE THING:
In Part 1, Dreese talked about their current product mix, which is 20% music, down from 80% 15 years ago. Mostly, they just sell cool stuff that you want.
We’ve morphed tremendously. Blind boxes are an enormous category right now. That’s maybe 15 percent, up from 5 percent just three or four years ago.
We were one of the first domestic customers of Pop Mart. That’s, of course, a phenomenon that has a many-billions-of-dollars market cap, over in China, by far the most successful pop culture company in the world if you don’t count Disney as master of everything.
I think their market cap’s like 25 times what Funko is, just from a pure financial resource point of view. They’re very sophisticated. They have 1,000 stores or whatever, 600 of them, in China. They’re leading the way.
You see it with K-pop. The Asian influence is what is driving the popular culture at this point. On the music side, stuff like rap is completely dead. That was the cultural leader 15 years ago, the rappers. They’re non-existent now. They have completely fallen off the throne of what’s driving major trend. It’s way more about K-pop and anime and that type of thing.
He also notes the change in customer demographics:
It’s changed remarkably. We were initially a comic book store, and then we became almost completely a music store, or music and DVD store, and both those categories were heavy male demographics.
Now, we are in the manga, anime, what we call Japanimation-type goods, which are extremely trendy. That demographic is at least 60 or 65 percent female. We now have a very blended group. I’d have to guess we’re probably close to 55 percent female. That’s up from maybe 20 to 25 percent female a decade ago.
In Part 2, Dreese talks about catching a trend early and giving employees bonuses.
You said you’re having a bang-up year this year, what’s that based on? What’s growing?
Blind box lines, trading card lines, build kit lines, these things that are like LEGO knockoffs. You build these environments. The Smiskis and Sonny Angels are really popular. They come from the Dreams Corporation. Both sports cards and game cards are still running up 60 to 80 percent above last year. Those are very large numbers now.
Actually, in our stats, we never look at sales. All we measure is gross profit. Our gross margins are now running at least 1.4 what they were two years ago. We don’t expect it to continue. We expect it to go down meaningfully at some point, but it’s been a hell of a run.
We catch these like fidget spinners or the original Pokémon cards (that first series, boy, if I had just kept one skid of those). We sold $2.5 million worth of that first series of Pokémon cards. It was just extraordinary. When that happened, we bonused out huge. We had people in the warehouse crying. We gave them like three or four weeks’ pay. They’re just like, “Oh my god, I can’t believe it. I just got a check for $2,000” when their weekly pay was $500 at the time or whatever.
There’s a lot more: him telling a Marvel exec their product sucked 20 years ago, why Amazon doesn’t work now, the mall problem and more. Although a lot of the interview is from the perspective of a somewhat cranky older executive who made a success out of his business, Dreese is definitely a throwback to another era – a privately owned company that tries to retain and reward employees, and adapts as tastes change. Just thinking about the economic landscape of the US right now makes this seem like a vanishing model – no talk of AI telling them how to buy and market.
Dreese admits that he’s been at this for 48 years and a change is coming. So maybe this will seem like a nostalgia piece in the very near future. But his overall take is refreshing:
My partner and I can’t eat more money. It’s not necessary. It’s one of the joys of being elderly and running a successful enterprise: you don’t need to worry about trying to extract every dollar you can.
Like I said, I’ve never been to a Newbury Comics, although one regular Beat contributor works there. Maybe this is all hooey. But I know if I happen to see one on my travels I’m going to check it out – before its too late.
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