Finding a merchandise formula that fit proved key to turning around the once-sluggish Bible Factory Outlet chain, which opened its 55th store in Hagerstown, Md., in mid-November.

"Now we are a true outlet retailer," said president Bill Simmons of the chain's pricing and merchandise overhaul that changed it from a "traditional Christian bookstore" to an outlet operation featuring merchandise discounted up to 75%. The newest store is a few steps down from L.L. Bean and other heavyweight retailers in Hagerstown's Prime Outlets, but Simmons said he's had to focus on creating a "true outlet model" for the chain—rather than simply hooking customers with the catchy word "Outlet."

Founded in 1995 by real estate developer David Green, who remains majority owner, Bible Factory Outlet had a promising start, opening 17 stores by the time Simmons joined as director of operations in 1999. "At that time we basically had the concept of a traditional Christian bookstore in an outlet mall, but that model wasn't working," Simmons told PW. "It was not so much sales, it was margins versus operating costs. Because we were located in outlet centers, we had to discount all prices. But our prices weren't good enough. If you take an NIV Bible and discount it 5%, that's not really an outlet [price]."

With the company floundering, Green asked Simmons to become president in June 1999. Simmons immediately began changing the company's merchandise model. "It took two years to get fully into that model, and it took until 2002 to get in the black, but the result is that we now have a chain of stores that offer truly low prices—it's not a gimmick," Simmons said. Today, remainder merchandise accounts for 70% of sales, with the balance coming from first-run goods.

"We try to carry products that we're either going to discount significantly, such as 20% off a new Left Behind book, or Bibles that are stickered if they're first-run Bibles," Simmons explained. Bible Factory Outlet's merchandise mix is similar to a typical Christian bookstore's: 30% gift and related items; 25% Bibles; 25% books; 15% music; and 5% miscellaneous. The stores carry both fiction and nonfiction titles.

With its new model in place, Bible Factory Outlet is on a fast-track expansion schedule. The chain opened 17 new stores in 2003 and plans to open 20 in 2004. This past year saw expansion into Kentucky, Ohio, Indiana, Illinois and Iowa, and Simmons said he sees continued growth in those markets, as well as entrée into Michigan, while the chain continues to fill out its core market in the South.