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As hospitals struggle, gift shops provide spark by making money

A shopper recently marched into the gift shop at Providence Sacred Heart Medical Center and asked: “Where are the clip-on ornaments?”

She was shown to the decorated Christmas tree, where she picked out several ornaments. She clips a $50 bill onto each ornament for everyone on her Christmas list.

The woman is not a hospital patient. She doesn’t visit anyone. She simply shops there, as if it were a “real” gift store.

Which, indeed, it is.

Many retail stores are ailing in these tough times. But the gift shops at Providence Sacred Heart and Deaconess Hospital enjoy healthy revenues, thanks to changing trends in retail and health care and the buy-local movement.

Every hospital in the region is proud of its gift store, and on this launch weekend for the holiday shopping season, we’re taking a peek inside two of the biggest.

Evolution: Trinkets to bling

Hospital gift shops were once known for flowers, balloons, candy and the cheerful, gray-haired volunteers who ran the shops.

Now, these hospital gift shops act, look and feel like “a gift shop you’d see in the mall,” said Joey Frost of Deaconess, the administrative liaison to the store.

You can find purses, scarves, hats and gloves, upscale jewelry and home décor items in both shops.

Sacred Heart employs 13 full- and part-time employees. Its florist shop delivers throughout Spokane. You can valet park in front of the hospital, run in, grab a gift and even get your parking reimbursed.

The gift shop has grown 30 percent in two recent expansions and now fills up a section just off the hospital’s main lobby. Sales push $1 million each year.

Deaconess employs two full-time workers. Revenue: between $300,000 and $350,000 a year. The shop is hoping for a remodel in 2012. Its shelves bulge with merchandise.

Old-style hospital gift shops make about $500 per square foot of space, according to New concept gift shops, like the ones at Deaconess and Sacred Heart, can make almost double that.

Both gift shops employ buyers who select merchandise at gift market trade shows.

“I try to go to two a year,” said Julie Keller, the buyer for Deaconess. “Atlanta and Dallas are my favorites.”

Michael Wetherell was hired as a buyer 13 years ago at Sacred Heart. The shop’s manager, Claudia Hall, had decades of retail experience before assuming the top spot 15 years ago.

Under their watch, the evolution began at Sacred Heart.

“Before, it catered to people who came in here because Aunt Jane was upstairs and you wanted a little trinket to bring her,” Wetherell said.

Now, at trade shows, vendors court hospital gift shops. One reason? They pay their bills.

Unlike some retail stores in these hard economic times, hospital gift shops aren’t “going to fold up and run away in the night,” Wetherell said.

Captive customers

Worrisome health care trends – understaffed hospitals and overworked health care professionals – have contributed to thriving gift shops.

Between 70 and 90 percent of the customers at both gift shops work at the medical centers.

Both gift shops offer payroll deduction. So employees pop in, pick out items and give the cashier their employee numbers. Their purchases are deducted from the next paycheck.

Employees provide an enviable, built-in consumer base.

“Four thousand people have paychecks, and no time to go do anything,” Hall pointed out.

The stores also offer a change of pace – and scenery– for staffers caring for our community’s sickest citizens.

A recent article in American Nurse Today explained that nationwide “many nurses no longer take meal breaks or even short breaks during their shift to rest and refresh because they believe they don’t have the time or they don’t make the time.”

It’s called “retail therapy” for a reason.

At Deaconess, staffers coo over the baby gifts, one of buyer Keller’s specialties. The lacy Zags newborn booties are especially popular.

At Sacred Heart, female staffers try on fancy evening jackets. Buyer Wetherell picks designs women can’t find anywhere else in Spokane.

Both gift shops are dressed for the holiday now – Christmas trees with lights and lots of ornaments – and male and female staffers walk through, admiring the beauty.

“We provide a little respite,” Hall said. “They’ll wander for a few minutes to revitalize.”

Giving back

In a 2011 American Express survey of 600 small-business owners, more than half said the “buy local” sentiment was gaining momentum in their communities.

One major reason? Better customer service. At the hospital gift shops, employees know regular customers by name. Volunteers donate their time, energy – and good cheer – at both shops, too, adding to the excellent service.

Consumers increasingly spend money where it can make a difference. Both hospital gift stores funnel profits into a greater good.

At Deaconess, profits buy heart pillows given to patients recovering from heart surgery. Patients press the heart-shaped pillows to their chests to ease coughing pain.

Money from the gift shop is also used to buy stuffed “Deke” dogs, given to children staying in the hospital.

And every year, Deaconess gift shop proceeds fund five $2,000 scholarships for high school students planning on medical careers.

Sacred Heart’s gift shop donates money to the Providence Sacred Heart Foundation; in 2010, the shop gave $114,000. On the windows of the gift shop this is written: “Our profits benefit our patients.”

At both hospitals, it’s truth in advertising.