Young business is blossoming

Being young hasn’t stopped 29-year-old Theresa Preston from amassing impressive credentials as an entrepreneur.

In 2001, she became the youngest franchisee of Plato’s Closet Corp., a nationwide clothing store chain. Last year, her Colorado Springs location had the largest sales jump of all 200 Plato’s Closet locations. She and her two partners are gearing up to open a fourth store in June in Cheyenne, Wyo.

And these represent only the start of Preston’s goals.

“We’ll probably do one more location after the Wyoming store and then see what happens. It’s really been amazing,” she said.

Preston didn’t set out to own stores that buy and sell used brand-name clothing and accessories geared for ages 12 to 24.

She thought she would become a fashion designer after graduating with a bachelor of science degree in apparel design and merchandising from Colorado State University.

A short stint as an intern to an assistant designer for a major teen clothing line changed her mind. She was working 60 hours a week minimum for $24,000 a year, “which you really can’t live on in New York.” Plus, she had a threehour daily commute.

While in college, Preston had worked for a Plato’s Closet in Fort Collins. She reconnected with owner Renee Jelinek, who made her a deal she couldn’t refuse.

“I had expressed interest in owning a store, but I didn’t have any capital,” Preston said.

No problem for Jelinek and her sister, Andrea O’Donnell, who owned the Fort Collins store and wanted to expand their Colorado market share but lived in Wyoming.

Sweat equity was what they wanted out of Preston as an equal partner — and they got it.

“When she worked for us in college, she was the best employee from the first day — she understood everything and had a great work ethic,” Jelinek said. “It was better for us to bring her in as a partner because we knew she would care about the business.”

The trio opened a Plato’s Closet in Littleton five years ago and the Colorado Springs store, at Citadel Crossing, two years ago.

The local store ended 2007 with a 51 percent sales increase over its first year in business. That brought annual sales to $750,000, Preston said, and marked the largest sales increase in the chain. The average Plato’s Closet sells $600,000 annually, Preston said.

Jelinek said she wasn’t surprised at the performance: “We knew they were doing everything right at that store.”

Good business basics, including intense staff training, employee rewards and an emphasis on customer service, led the Colorado Springs store to become a franchise leader, Preston believes.

To train the manager, assistant manager and eight other employees in the way she wanted the store run, Preston moved to Colorado Springs from Denver for a year.

“You can’t just open a store and expect someone else to take care of it,” she said. “You have to be really involved.”

Plato’s Closet buys only certain brands of clothing, such as Abercrombie & Fitch, American Eagle and Baby Phat, and is highly selective about its condition and age. The store pays sellers 30 to 40 percent of retail price and resells the clothing for 70 to 80 percent of what it sold for new.

Sponsoring local high school events has helped boost brand recognition, Preston said, and the store is “really big” on customer service. Managers spend 80 percent of their time on the floor, for example, and new employees don’t answer the phone until they’ve been on the job two weeks.

Preston’s training includes constructive criticism, which 17-yearold employee Whitney Hollenbeck said she values.

“She shows us how to do things so we’re not confused. I look up to her, and I’m thinking about pursuing the same career. She seems like she enjoys her work,” Hollenbeck said.

The franchise is owned by Winmark Corp., which also owns Play It Again Sports and Once Upon a Child. Though the franchise offers support and guidance, Preston and her partners have created their own ways of improving business. To keep good employees, who, like their customers, are young, the owners cater to what Gen Y wants.

“We don’t create unrealistic expectations, and we get involved with them and relate to them. We believe in doing more than just giving employees a paycheck,” Preston said.

Employees earn points, which can be redeemed for gift certificates to places such as Starbucks, or a payback from a manager, such as washing the employee’s car.

“This is an incentive-based generation,” Preston said, “and we’ve found doing this creates more of a team.”

The strategy motivates employees and makes the job fun, which creates a positive shopping environment for customers, said 21-yearold Jennifer Hess, who has worked at the store since August.

Employees also receive gift cards to their favorite restaurant or store for birthdays and employment anniversaries. A new program the partners started is a $500 scholarship for college students who recycle.

“Some people get a bad taste for franchises, but those people expect the franchise to run the business. But what you do with it is up to you — a franchise doesn’t necessarily guarantee success,” Preston said. “If you want to be successful, you have to go beyond what the franchise provides.”

Preston, meanwhile, has her sights set on earning a master of business administration degree and is enrolled part time at the University of Colorado at Denver. She also got engaged on New Year’s Eve and has a 2009 wedding to plan.

“Being a young entrepreneur and a woman, I really encourage women to do what they want to do,” she said. “I encourage parents not to discourage their children but have faith in them that they will do something great.”