Brick-and-Mortar Card Stores Thrive in Internet World

Editor's note: This article is the eighth 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. ( TheStreet) -- For Dana Norman and Michele Rothberg, Christmas will have to wait.

The owners of Card$mart, a discount greeting card store, have been busy with Labor Day, Rosh Hashana and Yom Kippur, Columbus Day, Halloween and, unknown to most Americans, Grandparent Day and Clergy Appreciation Day.

Less-celebrated holidays may not spark the greeting card buying frenzy that others do, but Card$mart still has to be prepared. After all, Americans purchase 7 billion greeting cards a year, amounting to retail sales of more than $7.5 billion, according to the Greeting Card Association, a trade organization that represents 200 American and international publishers and suppliers.

"We put out for all holidays," Norman says. "For Grandparents Day, we sold some cards. And Clergy Appreciation Day, it's not a lot, but we do sell some cards for it."

"We're a card store. You always want your store to look full. These are the obscure holidays but we must provide for them," she says.

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At the same time, Norman says, she is learning to find a balance between her senior citizen clientele, still a large share, and younger generations.

"We're trying to keep it current," she says. "We have a Sweet 16 card that on the outside is a cool design that's definitely more contemporary. It's not just hearts. But on the flip side, in every category, we still have to keep cards that are more traditional. We can't take them all away. The elder population -- that's not what they're accustomed to."

Norman says she or another employee will often walk around with the less-mobile customers picking out cards to check off their lists.

"Part of our core customer base are grandmas. It's an older population that mails to their relatives. They will buy a card for everyone. They come in with a calendar and a list," she says.

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

While there is certainly a selection of traditional cards to choose from, greeting cards, industry wide, are also being tailored to a new generation of buyers.

"Designer Greetings is making great improvements in the 50%-off cards. They're not as frumpy. They're definitely becoming a little more vibrant and colorful," Norman says. "We just got a new card, which says "OMG" on the cover of it," she says, referring to the texting abbreviation for "Oh my God," used frequently by the younger generation.


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When asked if she thought the new generation of cards was an attempt to keep the greeting card industry relevant for a generation that was less inclined to buy cards, Norman said she wasn't concerned.

"I don't think the card business is going to become nonexistent," she says.

That being said there are plenty of full-price greeting card store chains like Hallmark and American Greetings ( AM) that are closing stores.

The troubled economy may put off customers from wanting to buy a $5 greeting card, but stores like Card$mart that sells 50%-off cards are still doing well.

"If e-cards were going to have put card stores out of business, we wouldn't be here," Norman says. "It's not fun when you get an e-card. I don't think that part of the Internet and communication has really taken off. There is still something about getting a card in the mail that somebody wrote something in."

One holiday that isn't a huge card seller: Halloween. The customer that buys the most Halloween cards? Grandma.

Norman makes sure she is stocked full with cards to grandchildren for Halloween.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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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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