Retail expansion a leap of faith for Flag Store owner

For years, Martin Smith dreamed of expanding the retail space of his Flag Store of Nevada Inc. in Sparks.

But when the opportunity arose at the same time that the store's sales were running 20 percent below year-earlier levels, Smith needed to swallow hard.

"I had been waiting a decade for this to happen," Smith says. "We figured it was now or never."

Now Smith and the half-dozen employees of the specialty retailer are running hard to generate increased revenue to justify the new location.

The Flag Store now extends across 6,500 square feet of storefront at 155 Glendale. That's only 500 square feet more than the company previously leased, but it gave up production space in a nearby building in exchange for higher-visibility space in a single location.

"I wanted everything under one roof," says Smith, the president of Flag Store of Nevada.

To boost its revenues, Flag Store employees cast a wide net. Sales of American flags remain a cornerstone of the company's business about 20 percent of sales despite fierce competition from discounters and mass retailers.

"Old Glory still is the No. 1 seller," says Smith. "No about that."

But the flags-and-banner business extends far beyond Old Glory. State flags. Sports team flags. Nautical flags. Foreign flags. Religious flags. Historic flags.

Wind socks which are sort of flag-like, if you think about it provide another stream of revenue to the store. Another growing rivulet of sales comes from yard decorations that spin in the wind, a popular item with retirees and RV-dwellers who want to personalize their space.

Add in some novelty items need a necktie in the colors of the British flag? A flag symbolizing the cocktail hour? and the 6,500-square-foot retail location begins to fill.

Smith says the company also sees growth in the Internet retailing that's overseen by his son, Eric, a vice president of the company. On-line business currently accounts for about 5 percent of the company's sales.

"We can compete with anyone in the United States and we do," says Martin Smith.

The brick-and-mortar storefront also draws well among out-of-town visitors to Reno's summer festivals. Hot August Nights visitors, for instance, come looking for racing's checkered flags.

Faced with slow sales during the winter months, Smith a couple of years ago developed The Nevada Trivia game. It's sold well enough during holiday seasons that the store now is widening its inventory of Nevada-oriented merchandise.

Still, Flag Store has felt the pinch of the recession. Its staff works a reduced four-day schedule as sales remain slow.

But Smith has survived tough times before.

Launching Flag Store in a 300-square-foot space on Keystone Avenue as an American flag distributor in 1986, Smith fed earnings back into the business while his wife worked as a casino dealer and the couple lived in a 25-foot trailer.

By early 1991, the Flag Store had moved to its Glendale Avenue location and it was about to go out of business.

But when the United States launched Operation Desert Storm into Iraq in January 1991, the outpouring of patriotism among residents of the Truckee Meadows brought $35,000 in sales to the Flag Store in seven days.