How retailers decide when BIGGER is better

As the saying goes, if you’re not growing, you’re dying. 

It’s true for the spa industry, one that has seen vast growth over the last few years. For some, that simply means increased training, but for others, it’s about expanding store footprints, finding new spaces and hiring more employees. 

Since the explosive demand for spas started in 2020, many retailers grew their businesses enough that they needed to expand to multiple locations. But the decision to grow isn’t always an easy one, and industry experts say it takes patience, research, manufacturer support and a growth mindset to succeed. 

Location considerations 

“It’s a good time for people to look at expanding,” says Cole Taylor, co-founder of Southern Leisure Spas & Patio, based out of the Dallas-Fort Worth area. “We’re back to one to two months now [for getting products shipped]. It’s the perfect time to expand.” 

Taylor currently has four locations and recently signed a lease on a fifth location in San Antonio, Texas. While on the lookout for his next location, Taylor has features he insists on when it comes to showrooms. For his company model, anywhere between 4,000 to 6,000 square feet works best. He also tries to keep his stores at least 40 minutes apart from one another, so there’s no “cannibalization” when a new one opens. 

Demand also plays a role in expansion, says Don Riling of Olympic Hot Tub, a Pacific Northwest retailer. After several years of working for the owners, Blair Osborn and Alice Cunningham, and expanding their footprint around Puget Sound, he purchased the business from the pair in 2016. 

Southern Leisure Spas & Patio
Four locations across Texas with a fifth on the way

Despite having a store in the hub of Seattle, Riling kept receiving calls from prospects in nearby Mercer Island and Bellevue. Because they didn’t want to fight traffic, he found customers would often refuse to come to Seattle. That’s when he knew the region needed more Olympic Hot Tub showrooms.

With eight greater Puget Sound locations, Riling is always seeking expansion opportunities; as part of his five-year business plan, he’s looking at customer heat maps to see where the gaps are. In some cases, it’s taken him over a year before he found exactly what he wanted.

“The most challenging aspect of expanding is real estate; it’s a nightmare to find a good location that is not too expensive,” Riling says. “Finding that sweet spot in terms of location, square footage and access is really hard to achieve. It takes some time.”

Finding that sweet spot in terms of location, square footage and access is really hard to achieve. It takes some time.”

Don Riling, Olympic Hot Tub

Wise businesspeople will negotiate longer lease terms, work with a savvy landlord and look at all aspects before deciding, Riling says.

Manufacturer resources and support

Taking advantage of the manufacturer’s offerings can also help when retailers are considering expansion. 

Shane Wickline, senior business development manager at Watkins Wellness, says a dealer will know when it’s time to expand, so he doesn’t chase down retailers to force expansion. After all, they know their business the best and know what they’re comfortable doing.

“Primarily, it is driven by our dealers reaching out to us with the intent to expand,” he says. 

Olympic Hot Tub
Eight locations across the Seattle Metro

Watkins dealers can access resources to help them grow, namely its 45 years of statistical analysis, says Matt Teague, Watkins director of business development.

“We can extract a lot of different things to find out where their ideal new customer center is,” Teague says. “We do that on mapping software and map it out. Where are you strong? That helps you see where they have done a good job with lead conversion and shows where they haven’t been so strong in the market.”

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Persistence and patience Growth doesn’t come easily, so a strong work ethic and conviction are a must.

For Ronak Shah, CEO of Galaxy Home Recreation in Oklahoma and Arkansas, it’s all about fine-tuning the business his late father started in 1975. After his father died in 2010, he and his sister worked to grow the “backyard fun headquarters” as they learned there was a business model for expansion they could replicate. 

“With us being relatively younger, there was a natural emphasis to grow,” Shah says. “It starts with your own appetite and motivations. You’ve got to want it. Second, our first arch of growth was pre-COVID. We were doing that growth because we had opened a store in the summer of 2014 and saw how that store had done really well.”

Galaxy Home Recreation
Six locations across Oklahoma and Arkansas

Patience has played a big role in Galaxy Home Recreation’s expansion, particularly in going from one to two stores. 

“You have to be patient and you’re taking a big risk as opening another store means a lot of staff,” Shah says. “The risk is a huge factor, and you have to do it right. We have a formula and recipe now, and we can do it with relative ease.”

For his family business, that means having a roughly 15,000 square foot building within a 10-mile radius of 80,000 households that meet the socioeconomic demand.

For other retailers, it’s about seizing the opportunity as it comes. 

Scott Clark of The Spa and Sauna Co. did just that when the option to purchase a California business 250 miles away opened up. The well-established business started in the ’70s and had firm roots Clark knew would keep the store successful well into the future. 

“Growth for us has generally been based on opportunity,” he explains. “The excitement of taking our business model and implementing our processes was a great test of the repeatable processes we have built out over the years and has proven to be the blueprint for our team to use.” 

Rewards of expansion

Aside from increased revenue, making a difference in his employees’ lives has made expansion rewarding for retailers like Clark and Shah.  

The Spa and Sauna Co.
Five locations across Nevada and California

“We often talk about how hot tubs change the lives of the users for the better, but we don’t often talk about how our company has bettered the lives of our employees,” Clark says. “It is great to see our employees’ lives be enriched by doing what many start out thinking is just a fun summer job, not a career.” 

Shah, who opened two stores in 2023, says it’s just as rewarding for him as it is for the employees. “Opening a new store is always exciting, but it’s more exciting to your employees,” he says. “Everybody loves the idea of success. It’s a real motivating factor; it gives them another reason to keep excelling.”

“Opening a new store is always exciting, but it’s more exciting to your employees. Everybody loves the idea of success. It’s a real motivating factor; it gives them another reason to keep excelling.”

Ronak Shah, Galaxy Home Recreation

Clark’s last piece of advice for spa retailers looking to expand: Look to the future then plan, plan and plan some more. 

“Start planning for growth years in advance by managing the business by the numbers and documenting all your processes — and training your existing team using those processes so they can repeat them every time,” he says.