Rochester Business Journal
January 14, 2000

Paychex chief, partner expand storage venture

Store to Door LLC, a storage company started by Paychex, Inc. chief Thomas Golisano and a partner, has opened locally on Jefferson Road.

"It's unlike traditional storage where you go get it. Our storage comes to you." said James Wayman Jr., president and CEO.

The business is based in Woburn, Mass., near Boston.

"(Store to Door) offers a high level of service and cost-wise is very competitive," said Golisano, who serves as chairman. The Paychex chairman, president and CEO said he is confident the business will thrive in Rochester with a skilled manager, Richard Taylor, and a good location.

Golisano and Wayman started Store to Door in 1997 as a successor to an earlier storage business in which they were partners, Safesite Records Management Corp. The two equal partners who plan to invest $1 million to $2 million in this market over the next two years to get the company established.

Store to Door operates unlike any other storage business in Rochester, the partners said. It brings a container or pod the size of a small tool shed to a home or business and leaves it for the customer to pack. The storage pods are protected with heavy strength vinyl jackets made of Mylar.

When packing is completed, the company hauls the padlocked pods back to its secure, climate-controlled warehouse, where the pod is bar coded and stored. The services costs $69 a month to store a pod and $59 to deliver up to six pods.

Store to Door also operates in Boston, Baltimore, Chicago and Washington, DC. The firm employs some 35 staffers, with four in Rochester.

The company's growth over the past two years has outpaced projections, Wayman said. "The demand has been more that I anticipated."

The Rochester store is expected to generate $500,000 to $750,00 in revenues this year, with annual sales ultimately reaching $1 million to $2 million. Company wide, Store to Door projects nearly $4 million in sales for 2000 and $10 million in the next three years, Wayman said.

With expenses such as leasing buildings and buying flat bed trucks, forklifts, storage pods and computers, the venture has yet to post earnings. Wayman expects a 35 percent pretax profit margin when it becomes profitable, as early as 18 months from now.

Once the concept catches on, Golisano said, Store to Door will pursue expansion more aggressively - possibly opening three to five new stores a year. He thinks the company has the potential to go nationwide.

Golisano and Wayman, who was once one of the original Paychex investors and a vice president at the firm, were partners in Safesite for 11 years. The company, started in Rochester in 1986, picked up, stored and retrieved archived records. Golisano was the principal owner of Safesite with a 60 percent stake.

"(Golisano) lends his expertise to things and puts us in touch with people we need; he's not just a financial partner," Wayman said of Golisano's involvement in the companies.

Safesite moved its headquarters to Boston in 1990, grew to more than 400 employees in 14 locations and reached $20 million in annual sales before selling to its Boston-based competitor, Iron Mountain Inc., for $62 million in 1997. Iron Mountain is the largest publicly traded records-management firm.

Frequently, Safesite business clients asked for similar services for office furniture during office renovations or relocations. Three months after Safesite was sold, Store to Door was launched to handle those needs.

Store to Door does no have the field to itself. The concept of delivery and pickup in storage containers, started several years ago on the West Coast, is gaining popularity across the country, Wayman said.

The nation's largest self-storage company, publicly traded Public Storage, Inc. of Glendale, Calif., has been adding pickup and delivery service in some 50 of its 1,237 storage locations nationwide.

The mobile self-storage business is part of a highly profitable self-storage industry. The industry in this country has enjoyed steady growth, generating more than $9 billion in revenue two years ago, up from $7 billion seven years earlier.

According to the Self Storage Association, an industry trade group, approximately 26,000 storage facilities operate across the country, up from 20,000 seven years ago. The average occupancy rate is 90 percent.

One reason Store to Door decided to open a Rochester location is because Wayman and Golisano have good working relationships with former Safesite employees.

When Safesite was sold, the partners gave more than 750,000 shares of Iron Mountain stock to 50 of their top employees. Now, many of those employees wanted to work for them again.

The Rochester store is housed in the 25,000-square-foot former Lechmere building at 1225 Jefferson Road. It is the first Store to Door site with an appealing storefront in a high traffic area - an estimated 73,000 vehicles pass by each day, Wayman said.

The firm's other outlets are warehouses in industrial areas. Wayman thinks the more visible location will help promote the concept.

Older Store to Door facilities in Washington and Chicago are twice the size of the Rochester facility, containing 1,500 to 2,00 pods. On average, customers store two to three pods.

Some 35 percent of Store to Door's business come from companies; residential clients account for the rest. The service is popular with college students and apartment dwellers who have little storage space.

An estimated 17 percent of the firm's business comes from real estate agents who help customers with storage to expedite a home sale. If the home does not sell within 90 days, Store to Door gives customers free storage.

The company also contracts with Wentworth Galleries to store artwork and Au Bon Pain to storage summer patio furniture.

Store to Door expects to do television advertising locally, along with telemarketing, to contact businesses and real estate offices.

In other markets, the company estimates nearly one-fifth of its business