POLL QUESTION

Is the Maine fireworks market set to explode?

Posted July 08, 2011, at 12:55 p.m.
Last modified July 08, 2011, at 10:10 p.m.

Poll Question

Chris Shipley of Waterville, Maine, vacationing in New Hampshire, considers some of Phantom’s fireworks
Chris Shipley of Waterville, Maine, vacationing in New Hampshire, considers some of Phantom’s fireworks
Steve Carbone, right, owner of Atomic Fireworks Inc. in Seabrook, N.H., checks out Frank Labbe, center, and Kris Kay, left, as he buys fireworks for an upcoming party. July 7, 2011.
Steve Carbone, right, owner of Atomic Fireworks Inc. in Seabrook, N.H., checks out Frank Labbe, center, and Kris Kay, left, as he buys fireworks for an upcoming party. July 7, 2011.
Kris Kay checks out the selection at Atomic Fireworks Inc. in Seabrook, N.H. July 7, 2011.
Kris Kay checks out the selection at Atomic Fireworks Inc. in Seabrook, N.H. July 7, 2011.
Some of the products on the shelves at Atomic Fireworks Inc. in Seabrook, N.H. July 7, 2011.
Some of the products on the shelves at Atomic Fireworks Inc. in Seabrook, N.H. July 7, 2011.
Phantom Fireworks built this building in 2006 on Rt. 1 in Seabrook, N.H. It fits into the retail nature of the area, blending in with Staples, Walmart and other stores along the strip. July 7, 2011.
Phantom Fireworks built this building in 2006 on Rt. 1 in Seabrook, N.H. It fits into the retail nature of the area, blending in with Staples, Walmart and other stores along the strip. July 7, 2011.

SEABROOK, N.H.— Frank Labbe and Kris Kay work their way down each aisle at Atomic Fireworks, picking up brightly colored packages with names like “Patriot Dream,” “Xanadu,” and “Megabanger.”

The two friends from Massachusetts are stocking up for a little party, and the entertainment will be explosive. Labbe’s eyes light up as he examines products, like a kid in a candy store — or an adult in a fireworks store, for that matter.

The first time he came to Atomic, a few years back, he spent $100. The next time it was $300. Then it was $600. He talks about an old “cocktail” firework that he loved, remembering it with store owner Steve Carbone.

“That cocktail’s better,” Carbone says, pointing to a head-sized package on a wall. “Orange, green, gold willows – and kabooms.”

Labbe’s getting more and more excited. Take it, Carbone says, giving away the cocktail and sending Labbe out the door after Kay with one last “awesome!”

“And that’s your customer,” says Carbone, watching Labbe leave. “It’s a great business. The people are great — it’s discretionary spending, so they’re enjoying themselves. They want to be here.”

Soon “here” will be Maine.

Earlier this year the Legislature and Gov. Paul LePage passed a law effective Jan. 1, 2012, allowing the sale and possession of most commercial fireworks in Maine — legalizing activities that some Mainers have been participating in illegally for decades. Broadly speaking, according to State Fire Marshal John Dean, missile-type fireworks such as bottle rockets, parachutes, mortars and the like are not allowed under the new law. A great deal of rule-making will still be needed to spell out exactly what is permissible in Maine.

But the law does specify that fireworks in Maine can only be sold out of free-standing buildings – not in tents or trailers, not as part of a larger business such as a department or convenience store.

And at least two major fireworks companies have confirmed to the Bangor Daily News that they are already scouting locations in Maine for stores. And the trend in other states has been that where one large national chain puts a fireworks store, others follow — not unlike fast-food chains or home-improvement stores that locate close together.

Rep. Douglas Damon, R-Bangor, sponsored the bill, and said two of the main reasons he was doing so was to increase jobs and revenues for the state — in the form of property tax, income tax, sales tax and licensing fees to sell fireworks. Phantom Fireworks, a national chain with 54 locations — including one in Seabrook – supported Damon’s legislation, said Dan Peart, director of showroom operations. And Phantom is now eying the Maine market.

“I can tell you the minute the governor signed the bill, one of our people from development was up in Maine,” said Peart. “He’s got his eye on a couple of leads; we’ve opened up relationships with real estate brokers in the area. We’re serious about coming to Maine.”

Nothing is set in stone, Peart cautioned, but he thinks the state’s buying population warrants at least one, if not two locations within the next year. Peart and others in the industry say that when Phantom puts up a store, competitors like Alamo Fireworks and TNT Fireworks often locate nearby. Representatives of those two companies did not return calls for comment.

Peart said he thinks there’s a sizable fireworks buying market in Maine that has been going to New Hampshire for the last 20 or 30 years. This law changes that dynamic, said Peart.

“It’s keeping the fireworks market that’s already in Maine shopping and spending Maine dollars in Maine,” he said. “Given the opportunity, anybody would rather shop in their own backyard.”

Stephen Pelkey, CEO of Atlas Fireworks in Jaffrey, N.H., worked on New Hampshire’s fireworks legislation in the early 1990s and was a state representative from 2004 to 2008. Atlas has five retail stores in New Hampshire, and produces many of the region’s professional fireworks shows, including the recent one in Portland. Atlas is interested in Maine as well, said Pelkey, particularly along the I-95 stretch between Portland and Bangor, and in coastal areas that draw tourists.

“We’ve been looking at locations in Maine for about a year — we knew this was coming down,” said Pelkey. “We will be expanding to at least two more in Maine, and we’re contemplating on a third. We have to determine what the final rules will be.”

So what do these stores look like?

Nonchain stores such as Atomic are individualistic, not really fitting into a corporate retail type of model. Think a local garage versus a Jiffy Lube, or the neighborhood restaurant versus an Applebee’s.

The Phantom Fireworks stores look a lot like a Rite-aid or Walgreens type of building. The one in Seabrook is a smaller, brick-faced retail store with a paved parking lot and general design that blends into the town’s busy Route 1 corridor, next to businesses such as Lowe’s, T.J. Maxx, Prompto Oil Change, Kohl’s, Chili’s, Staples and many others.

“These superstores are kind of like fireworks groceries, if you will — there are carts, the aisles are quite wide,” said Julie Heckman, executive director of the American Pyrotechnics Association.

Pelkey said the stores typically have about 5,000 to 7,500 square feet of retail space. Buildings in Maine likely would have a total footprint of 10,000 to 12,000 square feet, including storage and office space.

They typically employ about four salaried managers, but boost numbers dramatically with part-time workers as the heavy July 4 season approaches. The stores gradually add staff as the business stays open later and later, until an extra 40 to 60 people are employed.

At the Seabrook store, the business is filled to capacity right around Independence Day, with a line out the door. A security guard checks IDs to make sure buyers are 21 or older, and lets in people as shoppers exit.

“Chaotic is the best way to describe it,” said assistant manager Megan Kearns. “It’s a happy chaos.”

That was the case with other fireworks stores — the large stores tend to employ the same sorts of numbers, with similar ramp-ups.

But the economic benefits go beyond the obvious, Pelkey said.

“When you have a business, you have to purchase phones and computers and insurance — all those things that spin the wheel that is our business machine,” Pelkey said.

Carbone, of Atomic, noted that fireworks stores tend to attract destination shoppers. He said the KFC across the street sold out of chicken July 4, 2010 — slammed by customers who were in the area to buy fireworks. They buy gas, sometimes even stay overnight, Carbone said.

“They’re not just spending money on fireworks,” he explained. “It’s the whole package you’re getting.”

That’s not to discount how much people can actually spend on fireworks, and the potential for sales tax revenue. April Walton, the manager at Phantom’s Seabrook store, said she sees people spend $250 easily, with an average sale between $200 and $500 around the July 4 stretch. One woman comes in three times a year, spending about $10,000 annually, she said.

Peart said the biggest sale he’s ever seen was a doctor in Pennsylvania, who bought two pallets and six shopping carts full of fireworks, a $14,000 order.

There is some entrepreneurial interest in starting businesses in Maine, as well.

Dean, the fire marshal, said he has received inquiries from people in Maine asking about selling fireworks. Likewise, said Pelkey, he’s taken some calls from folks interested in starting a business in Maine.

But there are significant barriers to opening a fireworks store, Pelkey, Carbone and Peart cautioned.

Maine’s legislation requires buildings used for fireworks sales have special construction for fire protection, sophisticated sprinkler systems, fire alarms, intrusion alarms, smoke evacuation systems and other qualifications that raise the price, noted Peart.

On top of that, insurance is very expensive for a fireworks store, Pelkey said, not to mention the state and federal licensing. Pelkey estimated a new business, soup to nuts, would run at least $300,000 to $500,000. Carbone put the number at $500,000 to $800,000. That’s before getting the shelves stocked with fireworks.

And, Pelkey added, the business is more complicated than it might seem. Most of the fireworks come from China, and that begs at least some understanding of the market, currency valuations, the labor market and other factors, he said. The supply chain is about 180 days — Atlas is about to place its production order for next year’s Fourth of July needs, he said.

At Phantom’s Seabrook store on Thursday, things were much quieter than a few days earlier, on the Fourth. Several people wandered through the aisles, including Chris Shipley, Jessica Heath and her daughter, Samantha Heath, 10, all of Waterville, Maine.

The three were vacationing at the New Hampshire beaches, and wanted to come by for a few fireworks. They were unaware that Maine had recently legalized fireworks.

Shipley said he was looking forward to buying fireworks in Maine.

“It’s just a big part of our history,” said Shipley. “Why can’t we do it safely in our own backyard?”

Jessica Heath said she had lived several years in Germany, where her neighbors celebrated Jan. 1 with fireworks. Likewise, said Shipley, a brother-in-law in Texas puts on big displays every year.

And the idea that the change in law may boost employment is a bonus, said Shipley.

“Any job they bring up to central Maine, I’m all for,” he said.

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