Distribution strategy Featured

1:06pm EDT June 26, 2006
Charles Hoogland was distributing videotapes in the mid-’70s when he found himself with more inventory than he knew what to do with.

His company had bought large amounts of videos in anticipation of high sales, but when the sales didn’t come, he had to find something to do with the inventory.

It was at this time he decided they should try renting the videos in order to recover some of the costs. From this idea sprang Family Video, a chain of 460 stores that is the fourth largest in the country.

As the company began to expand and open other stores away from Springfield, Hoogland had a vision that as the company expanded, instead of renting space from someone else, it would purchase each location and either build new stores or remodel existing ones.

Each store purchased was usually paid off in five years. Each site was constructed so that the space not only would have a Family Video store, but other retail space was also created so Family Video could generate customers and income from renting out the other retail space.

Hoogland realized that the video market could be a fad and wanted to make sure that he left all of his options open in case the industry began to decline. If that happens, Hoogland will still own the property and the stores and can convert those spots into rental property.

The company continues to open 30 to 40 new locations each year.

How to reach: Family Video Movie Club, www.familyvideo.com