Market Watch, January 2020

46 MARKET WATCH MARKETWATCHMAG COM JANUARY FEBRUARY 2020ple locations in the late 1950s In 1974 the Cap n Cork name was adopted and expansion heated up after that four locations were added in the 1980s four in the 1990s and another four in the 2000s Joe and Andy bought out George Lebamoff Andys father and Joes father in law in 1993 Business has been good in Fort Wayne which is located in the north east corner of Indiana and has a popu lation of 268000 Cap n Corks sales rose 4 in 2018 to 28 million with gross margins running 33 for wine 23 for beer and 27 for spirits Beer accounts for 40 of sales spir its for 42 and wine for 15 while tobacco represents most of the remainder While the stores are all less than 10000 square feet in size the densely packed assortments are impressive with 4700 SKUs of beer 3500 SKUs of spirits and 2500 wines in inventory The problem for Cap n Cork is that theres a cap of 39 free standing alcohol retail permits for Fort Wayne and its longstanding rivals Belmont Beverage and S V Liquors control everything that Cap n Cork doesnt own Theres little chance of expanding to the suburbs because the munic ipality of Fort Wayne annexes any outlying subdivision thats proposed before new towns can be built And no new permits have been allowed in many years In its search for growth Cap n Cork has been widening the footprint of its stores One branch was expanded from 5000 to 7000 square feet another was doubled to 7500 feet and But they do favor some restrictions on competition The groundbreak ing U S Supreme Court decision in the case of Tennessee Wine and Spirits Retailers Association v Russell F Thomas last June struck down a Tennessee state law requiring any retail applicants to prove two years of residency before gaining license approval Indianas law is actually much more restrictive requiring a full five years of residence for alcohol retail license applicants The Cap n Cork owners say they dont necessar ily oppose that restriction It was that rule after all that kept Binnys from invading Indiana with plans to open a store in the town of Schererville in 2016 Total Wine has tried to enter Indianapolis but was also stymied by the same residency requirements We like the residency rules Lebamoff says If much bigger companies like Binnys or Total were to come into Indiana they could be prepared to lose millions a year in selling below their costs and make it tough on little guys like us whove spent gener ations building up our business Grocery Store RootsIt certainly has been generations at Cap n Cork which is owned under the corporate umbrella Lebamoff Enterprises Inc The business was founded as a grocery store in Fort Wayne in 1911 by Argire Vasil Lebamoff a Macedonian immigrant He added liquor to the mix in the mid 1930s and along with his son George began expanding to multi Cap n Corks spirits selection displays top Bourbon shelves above includes 3500 SKUs at its stores Spirits are the largest category at the Fort Wayne Indiana company accounting for 42 of sales