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    Zipping Along

    Zips smoke shop chain grows to 12 Florida stores; now heading north.

    LAKELAND, Fla. -- Eric Jungklaus and his chain of tobacco shops, Zips Tobacco Outlet, may not be popular with the local health department or even with much of the general public. But, Jungklaus has carved out a significant niche among Central Florida's smokers: He has turned one store in Lakeland into 12 from Polk County to Orlando to Arcadia.

    By 2004, he expects to expand outside of Florida and is considering selling franchises. "I would have never thought I'd be in the tobacco business five years ago, but somehow or another I did," said Jungklaus. "We're growing into areas where people don't know about Zips, and people come in and say, 'Wow!'"

    The tobacco industry has taken quite a hit nationwide and in Florida. Tobacco shops such as Zips are one of the few exceptions, according to The (Fla.) Ledger.

    Zips doesn't seem like the typical cigarette store. The original shop has a wall full of cigarette cartons and some cigars, but also other knickknacks: incense, candles and some convenience items. That mix has helped turn Zips into a destination shopping spot in small towns, according to Jungklaus. "We try to be more than just a tobacco store," he said.

    Zips got its start in 1997. A group of businessmen from the Dayton, Ohio-area decided to open some tobacco shops in Florida. Jungklaus helped the men develop the concept and worked for them for a few years. When the first store opened in Edgewood Plaza in 1997, a vice president of Zips Tobacco Inc. laid out an aggressive expansion plan. Zips would open up to 25 more stores in Florida, Ohio and Michigan in 1998, and open as many as 300 stores by 2000, the vice president said at the time.

    In the end, that never happened. The Dayton group did open seven Zips stores in Central Florida and four more in Ohio, but never came anywhere close to their lofty plans. Jungklaus bought the seven Florida stores in August 2001 and has since opened five more. But what happened to the original, lofty plans?

    "They never got that aggressive," Jungklaus said of the former owners. "I don't know if it was a cash-flow problem or what. Maybe now a lot of that stuff will come true. It's a passion in my heart, and I'm not sure that was in their heart."

    Today, some of Zips' best growth is going on in small communities to the south. Earlier this month, Jungklaus opened the stores in Wauchula and Arcadia, Fla. The Sebring store, which opened in June, actually is outselling stores in bigger cities, such as Lakeland and Orlando. Where the average store does about $750,000 every year, the Sebring store should do about $1.5 million this year. Sales throughout the entire chain should top $8 million in 2002, he said. The company employs 25 people.

    Jungklaus is projecting all this growth amid a flood of bad tobacco publicity and a smaller percentage of adults who smoke. According to a recent report from the Centers for Disease Control, 22.8 percent of adults smoked in 2001, down from 25 percent in 1993. In fact, there was a substantial reduction in smokers among all age groups from 1993 to 2000, except for people ages 18 to 24.

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