The Right Start’s Founder Announces His Retirement

Lenny Targon has fulfilled a dream, and now he’s going to rest for a while. But only for a short while.

Targon, co-founder and chief executive of The Right Start of Westlake Village, a catalog and store retailer of upscale products for infants and children, announced his retirement last week. However, he will serve as a consultant for the company through May 1997.

Jerry Welch, chairman of the board of The Right Start, will take on the additional role of chief executive.

“The original business plan was to meet a niche that we saw that nobody was into yet,” said the 50-year-old Targon, whose company has built a reputation for catalog sales since it was founded in 1985. “The catalog section of retail was growing at a much stronger rate than the regular retail section, and we were in a mini baby boom, with new moms looking for a more convenient way to shop.”

Targon said he would like to take the experience gained from The Right Start and from his financial background and use it to help other companies. His plan for the near future is to serve on the governing boards of various start-up companies, helping to guide them in their business operations.

“That’s another dream of mine,” Targon said. “I have a lot of experience raising money, taking companies public, buying and selling companies. I’m not the type to sit on a lounge chair and fish.”

Targon leaves at a time when The Right Start is in the midst of changing its game plan.

The company opened its first retail store in Westlake Village in 1991. Since then, The Right Start has placed a much greater emphasis on retail business than on its catalog business, to hawk such specialty child products as multiple-use car seats and high-tech thermometers.

Over the past four years, The Right Start has opened 16 stores throughout the country. Welch said the plan is to open five more stores by May 31, the end of Right Start’s 1995-1996 fiscal year. Another 18 stores are planned for fiscal 1996-1997, with an additional 30 stores the following year.

The next new shop is scheduled to open March 21 in Danbury, Ct., and another store will open in Novi, Mich. on March 28.

“We’ve just scratched the surface on retail,” Welch said. “The company really spent 10 years sending out catalogs and in effect seeding the market for the retail stores.”

The gradual switch to retail comes during a downturn in revenue for the company. The Right Start reported a net loss of $594,000 for the six-month period that ended last Nov. 29, an improvement over its $1.4-million loss for the same period in 1994.

Although overall sales during the same six-month period dropped from $26.3 million in fiscal 1994 to $20.5 million in fiscal 1995, store sales climbed from $2.4 million to $6.5 million during that period.

Officials at The Right Start anticipate a large loss for the third quarter of fiscal 1995-96 that ended March 2.

Pete Baptiste, of the Edward D. Jones & Co. brokerage office in Ventura, said Right Start suffered the fate of many mail-order companies.

“Catalog business has been pretty much rotten the last couple of years,” he said. “They’ve been clobbered by much higher printing costs and the postal rate increase has hurt them. The cost of getting the product in the hands of consumers has hurt them considerably, while their business is going down along with the rest of the retail industry.”

At its peak, Welch said, The Right Start distributed about 12 million catalogs annually. He said circulation currently has dropped to about 8 million and should level off at about 6 million.

Company President Stan Fridstein, who co-founded The Right Start with Targon, said the purpose of the catalog has changed significantly since the company’s inception.

“The objective of mail order will be to drive traffic into the retail stores, to continue to build awareness in future retail areas and to contribute profit to the corporation,” he said. “The company is re-engineering itself.”