Its quirky blend of snacks, goat feed, udder balm, toys, overalls and firearms make Mills Fleet Farm a retail store like no other in Minnesota. And it is multiplying.
With new owners and a new chief executive, Derick Prelle, Mills Fleet Farm aims to double the number of its suburban farm-supply stores in the next five years.
The current count stands at 37 in Minnesota, Wisconsin, Iowa and North Dakota with seven of the stores added in the last decade. Minnesota has 16 stores, including a new location in Monticello that opened in August.
In January, the descendants of founder Stewart Mills sold the Brainerd, Minn.-based firm to KKR, the New York investment firm, for a reported but unconfirmed $1.2 billion. The deal represented an endorsement of retailing by one of the country's most prominent investment firms at a time when some prominent retail chains have scaled back.
"In today's environment, unique retailers can grow," Prelle said. "KKR's investment thesis from the beginning was to grow these stores."
The advancement has already begun. Five new stores are under construction or soon will be in Oconomowoc, Eau Claire, Delavan and DeForest, all in Wisconsin, and Sioux City, Iowa.
The new stores will be smaller than the existing 200,000-plus-square-foot megastores. "We think they're a little too big," Prelle said. "We can be more space efficient at about 145,000 square feet."
The newest Minnesota store, in Monticello, is 120,000 square feet.
The smaller stores present an interesting conundrum for Fleet Farm, according to George John, professor of marketing at the University of Minnesota's Carlson School of Management. "Fleet Farm appeals to both the rural farmer and the suburban shopper," he said. "They have to be careful not to lose authenticity by getting rid of the farm stuff."
While a Fleet Farm couldn't work in a first-ring suburb, John said, it can still work well in outer-ring suburbs or exurbs such as Buffalo or the outskirts of Maple Grove, cities where both farmers and suburbanites can shop. He compares Fleet Farm to Duluth Trading Co. and Red Wing Shoes, brands appreciated by both blue- and white-collar workers.
The smaller stores will not suffer from significant downsizing or elimination of product categories, Prelle said.
New stores won't need as much storage space for back stock. A new distribution center opening next year in Chippewa Falls, Wis., will allow goods to flow more quickly to stores with less need for inventory on hand.
Although no new locations in Minnesota have been announced, Prelle said the company continues to look at sites in the state. "Minnesota probably has the most Fleet Farm stores per capita, but there's still room to grow in the next five years," he said.
New market in Illinois
One new market for the company will be Illinois, where it will more directly encounter one of the few other chains like it in the Midwest, Blain's Farm & Fleet. Most of Blain's 38 stores are in southern and southwestern Wisconsin and northern Illinois. Fleet Farm is also expanding in southeastern Wisconsin, with new stores in Oconomowoc and Kenosha encroaching into Blain's territory.
"When you've got somebody [KKR] taking something [Fleet Farm] over, they're looking for growth," said Anne Brouwer, a senior partner at McMillanDoolittle, a retail consulting agency in Chicago. "They're going to start adding stores in areas where they weren't before."
KKR also plans to ramp up Fleet Farm's e-commerce, which Prelle said is not yet significant. "It's been a focus since the acquisition," he said. "We take e-commerce seriously. We plan to upgrade the navigation and shopability of our site."
For weeks, the company has been preparing for one of its busiest shopping periods, the time just before deer-hunting season. With Gander Mountain stores closed since the summer, Fleet Farm is viewing it as "a once in a lifetime event" to convert some of its customers, Prelle said.
It pulled out the stops for its sixth annual Orange Friday event that kicked off Minnesota's firearms deer-hunting season. "We're going to focus on value with sharp pricing and an expanded firearms and ammunition assortment," he said.
Besides the ubiquitous blaze orange clothing and accessories, the company added blaze pink apparel in its Minnesota stores this fall. "In the last six years, we've seen a lot more women taking up deer hunting," said Brad Hoff, manager of Fleet Farm in Brooklyn Park. "It's become much more of a male and female activity."
Family still has stake
The Mills family no longer has significant involvement in the company's day-to-day operations, although it retains a small ownership stake.
With research showing that 80 percent of customers refer to the stores as Fleet Farm rather than Mills Fleet Farm, the company will make less of a connection to the Mills name as it updates its signs and branding.
"We still have a family legacy," Prelle said. "But we'll emphasize 'Fleet Farm' as we build new stores and go forward."
John Ewoldt • 612-673-7633
