Overcoming financing obstacles, Valley Center's renovation wows customers.
Valley Centre Bowl was, up until recently, a traditional 30-lane league-based bowling centre located on South Main Street in Salinas, California, US. Like most bowling centres that were opened in the 1960s, the business has provided a good living for the original owners and for the Svetich family who purchased it in 1980.
The Svetich family saw their bowling business stagnating and knew it was time for a change to grow the customer base (obtain a larger penetration rate of the 150,000 Salinas population) and increase repeat visits.
The family’s eagerly anticipated $1.1m renovation was completed in early January of this year. It included a complete make over of the game and billiards space into a new redemption-based game zone with a Lazer Frenzy (Creative Works) and room for additional future family attractions. The entire facility received a colour change, new carpeting, and enhanced lighting.
Jim Svetich is extremely pleased with the renovation, and so are his customers who keep using the word “amazing” to describe the transformation. “Our total revenue has already increased by 12 per cent since the renovation was completed just four weeks ago,” he said.
“This has been accomplished with absolutely no new advertising. The increase is coming just from our current customers. I am now a believer that this was the right thing to do, especially during a tough economy. My daughter, Leslie, has done a superior job. She has put in a lot of hard work, often working seven long days a week for several weeks in a row. I can tell you that the hardest challenge was working with city officials and inspectors. Everything had to be perfect. If a wall was off by 1/16th of an inch, it had to be corrected. This was a four-month long educational process for me and Leslie, but I am happy with the way it turned out.”
It took more than a year for the $1.1m financing package to be approved. The family started working with the bank they had been doing business with for the past two decades. After eight months of jumping through hoops, it became apparent that this bank (which was purchased by another bank) no longer planned to make loans to small businesses.
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According to Leslie Svetich: “The bank wasted 10 months of our time. We applied for the same loan at another local bank and were approved in two weeks and funded within the following 30 days. We did most of the construction work ourselves (husband Dean did the construction), so it took longer but it came out about the same as if we had borrowed $2m.
“The idea of renovating Valley was hatched three years ago when I attended a seminar presented by AEM’s Frank Seninsky. What he showed me was that we had approximately 3,500sq.ft of space that was not being utilised and bringing in very little revenue. Our game revenue was generating 34 cents of our $11 per capita. He presented a good case why we should be earning $400,000-$500,000 more by adding redemption games and one or more family attractions and creating a new discount marketing programme revolving around the games. We retained AEM as our consultant and put together a solid business plan. Dad and I, as well as our management and technical teams, learned a lot from AEM and Alpha-Omega. We ended up purchasing 40 games, related equipment, and a Redemption Master System from Alpha-Omega Sales and revenue-sharing nine additional games with them that we have the option to purchase at any time. We are very pleased with our association and look forward to a long time relationship.”
And the payoff began nearly instantly. During the weekend of February 11 to 12, Valley hosted the Northern California Bowling Tournament, drawing nearly 350 bowlers over two days. “During the breaks, all of the adults were running to the arcade zone to play the games,” said Jim. “I would not have believed this was possible. Our game revenues have already tripled and I would not be surprised if they increased 10 times. I thought that the redemption games were just for the kids.”
“We would have liked to have more attractions and we still have additional space that we can use,” added Leslie. “Our customers are having such a good time playing the games and winning the prizes. Valley is now a place where you can come and have a good time even if you don’t bowl. The Redemption Prize Centre is now the focal point of the centre. We have two entrances and no matter which one you enter or where you are standing in the centre, your eyes to go the Redemption Prize Centre.”
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What are the plans for the future? An energised Leslie said: “Once the outside of Valley has been upgraded our next plan is to renovate Monterey Lanes. With the additional revenue being generated at Valley, Dad is 100 per cent in favour of moving forward with Monterey Bowl and I no longer have to lobby for that renovation. Dad has also taken an interest in repairing redemption games. And our entire staff is very excited about the New Valley Centre Bowl.”
Reproduced with permission of Frank Seninsky, President/CEO Amusement
Entertainment Management
