Rice Home Medical business plans approved
WILLMAR — Business plans for expanding and renovating Rice Home Medical retail stores in Redwood Falls and Alexandria have been approved, clearing the way for work to commence on construction documents.
If everything goes according to schedule, a final decision to go ahead with both projects could be made this spring, Rice Hospital officials said this week.
The hospital’s board of directors approved the business plan Wednesday for the two stores.
It marks a more aggressive strategy for Rice Home Medical, the durable medical equipment business owned by the hospital. Sales and customer service increasingly will be focused on the retail and cash aspect of the business and less on government-reimbursed services.
Doing so will help meet growing areas of customer demand and increase Rice Home Medical’s revenue, said Bill Fenske, chief financial officer of Rice Hospital.
“We’ve really been shifting that whole approach,” he said.
Construction of a new Rice Home Medical store in Redwood Falls is estimated at $1.8 million, including the purchase of land that was completed last year.
It’s a key geographic location that is important to the overall business strategy, Fenske said.
The Redwood Falls store is positioned to be a hub for service and delivery of medical home equipment in a region that reaches from Sioux Falls to Mankato, he said. “We believe we have some significant opportunities to grow that business.”
A new and larger store also will help the Redwood Falls staff meet a growing demand for specialized rehabilitation equipment such as ramps, lifts and customized wheelchairs and scooters.
The project at the Alexandria store is smaller, estimated at about $430,000, and involves remodeling to incorporate Marvelle’s Apparel, a women’s health and mastectomy products retail business, that was acquired recently by Rice Home Medical.
With the renovation, a “store within a store” will be developed for this service, with its own entrance and fitting rooms.
The addition of Marvelle’s Apparel also is expected to increase overall traffic at the Alexandria store and raise its profile among consumers along the I-94 corridor.
Fenske said the money for both construction projects is included in this year’s capital budget.
Projections indicate the business plan for the Redwood Falls store will earn an internal rate of return of almost 6 percent over the next seven years. The Alexandria store is projected to have an internal rate of return of 7.2 percent across seven years.
Rice Home Medical also has stores in Madison and Willmar. A renovation project recently began at its main store in Willmar.