Indoor play's the thing and it's profitable, too Discovery Zone joins area market

August 21, 1993|By Michael Dresser | Michael Dresser,Staff Writer

Child's play is getting to be serious business in Baltimore.

Yesterday's grand opening of the Baltimore area's first Discovery Zone FunCenter at Golden Ring Plaza marked the formal beginning of a competition as rough-and-tumble as a group of spirited 5-year-olds in a bath of plastic balls.

Discovery Zone, the leading national chain in the burgeoning new industry of indoor children's play centers, comes to the market with a huge war chest raised by one of the year's most successful public offerings.

The entry of the Chicago-based chain poses the first direct challenge to Kids Funjungle, an innovative hometown operation that has been doing brisk business in Ellicott City and Perry Hall. The competition will get even hotter in early 1994 when Leaps & Bounds, backed by the financial muscle of its parent McDonald's Corp., joins in the game. According to a real estate industry source, Leaps & Bounds is close to a deal at Columbia's Snowden Square.

And it would be no surprise if other players were to join in the roughhousing. "The concept actually has fairly low barriers to entry," said Linda Killian, an analyst at Renaissance Capital Corp., a Greenwich, Conn., firm that researches initial public offerings.

The concept is a 1990s version of the small local amusement parks that flourished in the 1950s and early 1960s but died with the Baby Bust. But instead of outdoor fairy tale themes, the park has moved indoors and stresses the kind of vigorous physical play that builds strong bodies while making sure little Johnny and Mary go to bed nice and early.

The colorful new Discovery Zone at Golden Ring shows some of the typical features. There's the "ball baths," a padded "roller-slide," skill games and a water bed to bounce on. There's a snack bar, birthday party rooms and a "quiet room" where adults can escape the din. The centerpiece is an obstacle course that chews up and spits out parents while their offspring charge through like Olympic athletes. (You can pass if your child's big enough.)

The centers also highlight cute mascots that interact with children. Funjungle has Jumpy, a person in a monkey suit. Discovery Zone has countered with Z-Bop, a smiling robot "goodwill ambassadroid" with a smiling face, discreetly hidden speakers and colorful buttons on its chest for kids to push.

One big selling point for Discovery Zone and its rivals is security. Each has set up a system to make sure that no adult enters unless accompanied by a child, and that no child leaves alone or with the wrong adult.

To varying degrees, the fun centers all promote the idea of child development and fitness.

Rick Grossberg, Discovery Zone's marketing manager, stressed that the center's games are not video-oriented. "All of the games are hand-eye coordination, skill-oriented games," he said.

The fun centers also stress the theme of noncompetitive play. Even the toddler who can't put a ball through the net gets a ticket good toward a prize. "We don't talk about winners and losers," Mr. Grossberg said. "Everyone's a winner."

Judging by the reactions of investors to its initial public stock offering, Discovery Zone could be the biggest winner of all. Since it went public June 3 at $22, the company's stock has soared to $52.25 and will split Monday.

"Every once and a while, there's a company that really hits on the imagination of the investment community," said Ms. Killian, the analyst. Discovery Zone, she said, is a company "you don't have to be an institution to understand."

Discovery Zone has been growing at a blazing pace since its founding in Kansas City in 1988. With McDonald's in the picture, it is now in an all-out race for real estate. Next month it will open its 100th center. By the end of the year, it expects to have 190-210 locations, with double that number by the end of 1994, Mr. Grossberg said.

In Baltimore, the chain will probably open three more stories by the end of the year, one of which will be in Glen Burnie, and another one or two next year, he said.

Meanwhile, Leaps & Bounds is opening its 13th center next week and expects to have 30 by the end of the year, marketing director Kathy Hartman said. The company is taking a serious look at one site in the Baltimore area and expects to have "multiple" locations here, she said. According to a source in the real estate business, the company is close to a deal for space at Columbia's Snowden Square.

The rapid expansion of such big-bucks rivals represents a potent challenge to Discovery Zone's home-grown competition, but Jeffrey Pechter said he's still having fun, even if it is a jungle out there.

Mr. Pechter, president of Kids Funjungle, said he's moving aggressively to prevent erosion of his business by cutting prices and updating his concept frequently. He said Funjungle plans to expand but there's "nothing even close to imminent."

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