Behind the Scenes at a Small Biz: March Means 'Mega' Money

Editor's Note: This article is the third installment in our "Winning the Card Game" series. Dana Norman and Michele Rothberg acquired discount greeting card store Card$mart in June 2011. They agreed to let TheStreet follow them for one year as they experience the ups and downs of running a business. Based on advice from their accountant, the owners have declined to share revenue and profit numbers.

PLAINVIEW, N.Y. ( MainStreet) -- Maybe it was the luck of the Irish last month, but Card$mart co-owner Dana Norman couldn't believe her lotto sales from customers literally in a frenzy over trying to win their share of the record Mega Millions jackpot.

Following a strong February, Norman and her partner, Michele Rothberg, spent much of the month cleaning up from Valentine's Day, laying out Easter and Passover cards, ordering for Mother's Day and finally sending the discounted Christmas cards to storage.

Yet ticket sales for the Mega Millions lottery were a welcome surprise in the long, typically dead month of March. According to the Mega Millions website, sales were unprecedented for the March 30 drawing. With no winner since Jan. 24, the jackpot rose as high as $656 million -- the largest jackpot ever, according to the website. And by now we all know the outcome of that drawing. Three winning tickets were sold for the March 30 drawing.
Mega Millions lifted sales in March for Card$mart.

Card$mart of Plainview, N.Y., certainly played its part in Mega Millions sales. Norman says customers were coming out in droves to purchase tickets - and that was good for business, particularly in a month with no strong anchor holiday. (Unfortunately St. Patrick's Day isn't a big card-buying holiday, Norman says. And while Easter and Passover cards do somewhat better, the partners have learned that customers are very last-minute buyers.)

>>>Winning the Card Game: Month 1
>>>Winning the Card Game: Month 2

"Our lottery rep was shocked at the amount of lotto we sold with one terminal," Norman says.

As Norman mentioned in Month 2, lotto in general is a big customer draw. Although Card$mart only earns 6 cents on the dollar for every ticket sold, when you have lines of eager players outside your door waiting to buy tickets, that eventually adds up.

"That Friday night of the drawing my son and I were in the store. We usually close at 7 p.m. I told him 'As long as people kept coming in to play I'm not closing," she recalls. "At 7 there was a line out the door."

"People that don't play or have never played -- everybody was playing. They don't know what they are doing and they don't know how to fill out the cards. I was giving tutorials," she says. "When we finally did close it took an awfully long time to count that lotto money. We wished that nobody would have won. We wish it went on for a longer."

Card$mart licenses its name from Designer Greetings, which is also the vendor of the discount line of cards the store sells. Yet the partners are not franchisees in the sense that they do not pay franchise fees or royalties to Designer Greetings. Norman and Rothberg are required to carry the Designer Greetings 50%-off card line, but can also sell other items and cards of their choice. Designer Greetings has declined to disclose how many independent retailers license the Card$mart name.

Rothberg and Norman acquired the store, located in an upscale shopping center, through an asset purchase last June. Norman tends to deal with the books, while Rothberg sticks with ordering merchandise. They both share equal responsibility for working the register (along with several part-time staffers).

The asset purchase has caused the partners some grievances. But slowly they're figuring things out.

Dealing with the prior owner

Norman has been dealing with the prior owner over discrepancies regarding the value of some of the purchased assets, such as sample invitation booklets. She has been diligently researching the value of each booklet and found that most were not of any value, let alone the inflated value listed in her purchase contract. The prior owner has been slow to fork over the disputed money ($1,000), but as Norman persisted and threatened to take her to small claims court, last month she finally relented.

"It not a tremendous amount, but it was money that we should have not had to be responsible for. It was really about the principle," Norman says.

The small victory has given Norman courage and motivation to further comb through her agreement to ensure that the price they paid for other merchandise was indeed correct.

Eyeing opportunity

Another lift to March revenue came as a result of Norman's keen business sense -- and being in the right place at the right time.

Norman has been trying to rid the store of its Disney ( DIS) figurines, which were another source of alleged inflated values left by the previous owner. The figurines have not been selling and Norman has been trying to figure out what to do with them before taking a loss.

In mid-February, Norman had taken her son to California to look at colleges and while they were there they decided to visit Disneyland. While purchasing park tickets from an outside vendor, she noticed that the vendor had Disney memorabilia all over his office. With her strong gumption, Norman sealed a deal a few weeks later with the vendor to buy a significant portion of her figurines.

It was an extra $1,000 to monthly revenue they wouldn't have had.

Looking forward over the next few weeks, Norman says the store is already prepared for two other huge card-selling events: Mother's Day and graduation.

"Mother's Day is going to be crazy," she says. "We have an extra cash register. We'll have two lines ringing up. We'll move other merchandise over" to make way for Mother's Day gifts.

-- Written by Laurie Kulikowski in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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