AVN.COM RETAILING PROFILE - Adam & Eve Retail Looking to Take Bigger Bite of Apple

Adam & Eve has come a long way in 35 years. From it’s humble beginnings when founder Phil Harvey opened the country’s first mail order contraceptive business in 1970, A&E has expanded into a wide range of adult-oriented businesses.

There is, of course, the mail order business, which ships 30 million catalogs a year. The recently renovated Website, adameve.com, which received an AVN nomination for Best Retail Website in 2004 and 2005. And Adam & Eve Productions— which boasts contract star Carmen Luvana — garnered no fewer than 20 nominations for this month’s AVN Awards.

Now look for the Adam & Eve retail outlets to become a bigger player in the brick and mortar game.

The Adam & Eve retail division was established in November 1999 when PHE, Inc. acquired the long-established Night Dreams store in Raleigh, N.C. There are now five 2,200- to 2,500-square-foot stores in five North Carolina cities, and they’re looking to expand.

“We are looking at franchising Adam & Eve stores,” Nolan Williams, director of retail sales, told AVN. “We would definitely like to expand outside of North Carolina, and we’d like to have some signature stores in some of the major cities. Where that would be, I can’t say right now. We certainly might want a presence in New York or Atlanta or Houston or Los Angeles. Right now we are actively pursuing the franchise direction for that very reason.”

While some might think the South — considering it’s location within the American Bible Belt — a curious place from which to base a chain of potentially-controversial adult outlets, Williams said Adam & Eve stores are a long way from the traditional outskirts of town raincoater porno shops. The company chooses locations carefully and watches what they stock, too.

“It’s the same way we’re working with franchisees,” Williams said, “we try to steer them in a direction that we think it will be a good location for an Adam & Eve store, and good for the community and good for the customer base and certainly for a successful venture.”

Seeing no sense in stocking titles that are magnets for possible prosecution, the retailer is also careful about what they stock on shelves.

“The 20- to 35-year-old group has sought out more graphic titles, and more and more stores are selling more gonzo than they used to, but I still think good features, good interaction, good black, good lesbian, I think there’s a strong market across the board for that. As far as the niche markets, that’s something with Adam & Eve’s approval standards that we get into anyway. We have approval standards for all visual product, and we are not going to approve any product that may seem extreme, product that, basically, could be difficult to defend, like Rob Black and some of the others, because it’s such a niche market, and we’re going to a broader market, and we see the bigger future there. So you’re not going to see anything that we can’t fulfill the 2257 requirements. We’re really very disciplined about that.

“So are you going to find everything in our stores that you might find in a guy’s video store somewhere? Maybe not. But certainly you’re going to find an ample selection of the video and novelty product to satisfy the overwhelming majority of the company’s request.

“Because of the market we’re seeing, and I think that’s where the growth is, and I think other people see it. Look at what Larry Flynt’s done with Hustler stores and look at some of the bigger superstores around the country are doing, and I do think that’s why stores will be bigger around the country. I think stores will be bigger for that reason; there will be fewer of them. This industry is basically run by thousands of independent, small mom-and-pop operations, I think going forward you’re going to see fewer overall stores, but they’ll be more of the super or megastores. Certainly that’s the direction I’d like to see us going. Larger square footage, larger stocking. I couldn’t see us doing another 2500-square-foot stores.

The current stores are between 2,200- and 2500-square feet, not tiny outlets. The boutique-style stores also have shunned the classic video booths of old, opting instead for a more open store environment that welcomes all customers in a safe, non-offensive environment.

“We are the typical adult-oriented boutique that is certainly a women-friendly and couples-friendly store; that’s the way we have been,” he explained. Women are beginning to drive more and more of this business, and I think the adult industry is finding that out. They buy more and more novelties, they are more and more comfortable with adult video, but they also buy the soft goods, they buy the club wear, the lingerie, leather outfits, so our stores are geared much more toward women and couples, as well as men.

“We have no viewing booths. Out stores are typically two-thirds soft goods [accessories/games/books] and one-third hard goods [novelty/video].”

By the end of 2005, Adam & Eve expects to have a total of 20 stores thanks to the franchising program. Some will be start-up stores and others will be conversions from currently existing stores. The gameplan is to expand up the East Coast and then looking west. California is very much in the sites for the company.

“Our objective is to have at least 15 more stores under the Adam & Eve umbrella by this time next year, and I think we’ll have that and maybe more. Some will be start-up franchise stores, and some will be conversion franchise stores. We’re looking to develop up in the Southeast first and then up the East Coast, and we have very large interest in California.

“Our objective is to make Adam & Eve stores Main Street acceptable,” Williams said. “We don’t want to have to be isolated out in an industrial zone. We are female, couples and male friendly; we want to go to areas where people say, ‘This is a first-class, well-lit store.’ There are other people doing this and doing a good job of it, and that’s what we have done with our North Carolina stores and what we intend to do across the country.”

For Adam and Eve franchise info: Mitzi Johnston, A&E Franchise Sales, 800.217.7423, [email protected] Also check out adameve.com/stores for more information.