Mutual Fund Store nabs executive from H&R Block

SAN FRANCISCO — David Byers was hired away last month from H&R Block Inc. to apply big- company retailing tactics to The Mutual Fund Store LLC. The former chief operating officer and head of the tax division at the Kansas City, Mo.-based tax return powerhouse seeks to use the same high level of real estate analytics he applied to finding locations for 3,000 retail tax outlets during the past three years. That effort, which included putting co-locations into 1,000 Wal-Mart stores, increased Block’s retail presence by 30% to 13,000, from 10,000 stores. Mr. Byers is offering few details for now about how he can bring this kind of growth to the Overland Park, Kan.-based fund retailer, other than to say he plans to speed up and improve the process of finding store locations by using analytics. “We need to dial that up,” he said. Mr. Byers, whose title is chief executive, said he also wants to hire and train employees more efficiently.
‘Retail czar’ Bringing retail science to a business where it rarely has been applied is a “fabulous idea,” according to Charles “Chip” Roame, managing principal of Tiburon (Calif.) Strategic Advisors LLC. “If I was in the position of The Mutual Fund Store, I’d go looking for a retail czar,” he said. “Each little mutual fund store doesn’t make that much money, so it comes down to executing the branch structure en masse.” Yet whether its national footprint could ever approach Block’s size is put in doubt even by Adam Bold, The Mutual Fund Store’s ambitious founder and chief investment officer. The stores work best when they draw from 1 million people apiece, he said. But that is hardly set in stone, said Harrison Miller, Palo Alto, Calif.-based general partner of Boston-based Summit Partners LP, a venture capital company that owns a minority stake in The Mutual Fund Store, which now has 53 locations. Most of those are owned by franchisees. “It’s absolutely not the case that you can’t get more dense than that” ratio, Mr. Miller said. The Mutual Fund Store also is exploring a co-location alliance with a major U.S. retailer, and it hasn’t ruled out expanding its product line beyond mutual funds, said Mr. Bold, who declined to identify that retailer. Reaching millions of people means getting down to basics, Mr. Byers said. “It’s about locating the right real estate and getting the right people,” he said. “That sounds simple, but it’s highly complex to operationalize that.” Mr. Miller agrees. “Even going from 53 locations to several hundred is a big step,” he said. The Mutual Fund Store depends heavily on interest generated by Mr. Bold’s syndicated radio show on mutual funds. The show’s penetration must be overlaid carefully with customer demographics and local traffic flows to generate the best store locations, Mr. Byers said. Improved analysis of real estate making better use of these variables could yield a trove of good locations, he added. Opening new stores Last year, The Mutual Fund Store’s board voted to not allow franchisees to operate in the nation’s top 15 markets, including Los Angeles and New York. Since January, The Mutual Fund Store has opened two company locations in metro Detroit — one in Livonia, Mich., and the other in Sterling Heights, Mich. — and it is in lease negotiations for two stores in Denver. In June, The Mutual Fund Store will open two stores each in Atlanta and Phoenix. The company also bought out the two franchise locations in Indiana.