Kurgo: Creating a Retail Category
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In 1978, Normand and Marjorie St. Cyr opened The Butchery, a high-end retail store in Danvers, featuring specialty meats, catering, prepared meals, and more. In 1984, their son Glen purchased the business. The Butchery enjoyed steady growth and, in 1994, St. Cyr opened a second location in Newbury. Two years later, seeking another revenue stream, The Butchery branched into wholesale meat provision, opening a USDA-inspected processing plant on Pine Street in Danvers.
"The plant produced and distributed our line of marinated meats to both of our existing retail stores, and we had our eyes on franchising our retail outlets," says St. Cyr.
Everything appeared to be working and, in August 2002, just as the company was getting into a higher gear, an arsonist set fire to the Danvers retail outlet, virtually destroying it. While no one wants to see their business engulfed in flames, the disaster opened a new door for St. Cyr and the company.
"I had no choice to but to rebuild," St. Cyr says. "This is my sole business experience and, with the Newbury and Pine Street facilities thriving, it just seemed logical." One change St. Cyr decided to make was to move the Danvers store and processing plant into a single facility. "It took about two-and-half-years to find and build out the 29,000-square-foot facility on North Street, but it's been totally worth the time and cost," he adds.
Fortunately, St. Cyr had about a year's worth of business interruption insurance and, with the existing facility still up and running and some belt tightening, The Butchery survived the fire and has since gone on to change direction and gain greater profitability.
While the wholesale operation had been geared to The Butchery's own stores, St. Cyr has since opened distribution to outside vendors, supplying custom cuts of meat with private labeling to high-end restaurants throughout the country, with a concentration of customers in New England, Pennsylvania, and Florida. "The key challenge was aligning ourselves with great distributors who could help us to grow the wholesale, and building a cohesive team of people who would pull together and get our customers the products and services they were accustomed to with limited assets," notes St. Cyr.
Since reopening in 2004, The Butchery has more than doubled its sales volume, with wholesale and retail meat supply balanced at about 50/50. In addition, St. Cyr has been able to rent the Pine Street facility to another food processor, creating yet another revenue stream.
Now, St. Cyr is putting The Butchery on the path toward expansion. "We're currently looking at another retail location and have new wholesale products ready to produce for our various wholesale distributors," he says.
Throughout the challenges The Butchery and St. Cyr have dealt with, he acknowledges having a great team of dedicated employees as well as an excellent partner: Salem Five, which helped in the rebuilding process. The Butchery utilizes a line of credit and two separate real estate loans, as well as Business Online Banking. "Salem Five has been terrific throughout our entire relationship," he says. "They've stuck with us through the bad times and trusted in us when it counted. If not for Salem Five, it is probable that The Butchery would not be around today.
If your business experiences any disaster, it's good to know that you can remain afloat if you have to shut down for any reason or period of time. Business Income Insurance (also known as Business Interruption Insurance) from Salem Five can cover the loss of income that a business suffers after a disaster while its facility is either closed because of the disaster or in the process of being rebuilt after it. A property insurance policy only covers the physical damage to the business, while the additional coverage offered by Business Income Insurance covers the profits that would have been earned. In addition to profits, the policy covers fixed costs, temporary location, extra expenses, and more.
Learn More about Salem Five's Business Income Coverage.