BusinessTN

A Fortune 500, $11 billion office supply giant, which sells school supplies, partners with an $8 million company with 22 active franchises nationwide that sells school uniforms? Sounds like a match made in retail heaven.

Though only operational since March, Chattanooga-based school uniform supplier Educational Outfitters’ pilot partnership with Office Depot in two Tennessee locations is working well for both companies.

“The relationships between our store owners and the Office Depot store managers have been outstanding,” says Educational Outfitters co-owner Brian Elrod.

Office Depot district manager Mike Nimrichter concurs. “Both stores have generated increased foot traffic from each other,” he says, “and it is a good opportunity to increase our ability to serve our customers.”

From the point of view of Educational Outfitters, the advantages are clear. “We could not usually afford this kind of prime retail space,” Elrod says. “With this program, we can go into those locations and pay what we are accustomed to paying. And, we get to 'brand up’ with Office Depot.”

Under the pilot program, Educational Outfitters leases space in an Office Depot store from Office Depot. The Educational Outfitters boutique shares some facilities and utilities with Office Depot, but has its own employees, cash registers and a separate outside entrance. Inside the store, there is an open pass-through from Office Depot into the Educational Outfitters area, which is separated by a rack wall.

In addition to the store in Chattanooga (the original Educational Outfitters store, bought from the Elrods by Chattanoogan John Clark, was the first to move to an Office Depot location), Educational Outfitters and Office Depot have a second location in Knoxville. The two stores serve approximately 12,000 students between them.

If the program continues on pace, Educational Outfitters franchisees will have increased opportunity to move their stores into other Office Depot locations, if there is an existing franchisee in the area. The franchise agreement between the two companies offers store owners an exclusive territory.

Though early returns look good, evaluation of the program by both companies is proceeding carefully.

“At this point, the business situation for both stores appears to be very strong,” Nimrichter says. “But we want to carefully evaluate things. It would be a mistake to move too fast.”