Apple Tree owner: Multiple conversations in play to keep centers open
Dec. 20, 2023
After a former employee stepped up to take over one of the four Apple Tree Children’s Centers slated for closure, the owner said deals are looking promising on at least two of the three remaining.
“I have informed the directors and said you can tell the staff and parents because we don’t want to lose them. We can’t tell specifically what’s happening … but we can tell you the chances of it going away are very small,” owner Randy Stewart said.
“The confidence level of that has gotten fairly high.”
Pete Nelson, a business owner and former executive director at Apple Tree, came forward shortly after the closures were announced last week and worked out a deal to become an investor in Apple Tree West with an option to acquire the furnishings and equipment. He already co-owns the building with Stewart.
“It made it really easy for me to make the decision here,” he said. “I said, ‘Let’s keep this running. This is a great brand. I think I can make this work.'”
Making it work in the child care industry has been a decades-long endeavor for the Stewart family, Stewart said.
His mother, Dee, founded the child care business in 1981. His father, Gordon, was the owner of Hair by Stewarts.
“They loved kids, and the losses were sustainable in their economic situation, and it was my mom’s passion and to a large extent my dad’s too,” Stewart said.
“The break even (point) is high (enrollment). If you get past break even, you can cash flow fairly well, and if you aren’t there, you bleed terrible.”
At one point, Apple Tree served 1,000 kids. It’s now licensed for just over 800. When Stewart announced the closure, there were roughly 500 kids enrolled at Apple Tree centers across four locations.
But an inability to hire caused him to keep classrooms empty.
“We had waiting lists. We had open space. And we couldn’t take them because of state ratios,” Stewart said. “I don’t particularly disagree with the state ratios. On the whole, I’m not opposed to it. But that’s what kept people from being more full.”
Nelson estimates that if he can add 20 to 30 kids to the west-side location with staff to support them, “they will be solvent,” he said, adding “I’m just hoping somebody will step up” for the other centers.
Those are located at 3309 E. 26th St., 700 N. Sycamore Ave. and 4101 W. Valhalla Blvd.
The east and north locations are larger than the one on Valhalla, which Stewart and Nelson said would present a more challenging operation as a smaller stand-alone center.
Apple Tree as an entity was designated a nonprofit more than two decades ago. The idea was to be able to access state and federal aid programs, particularly around food, potentially secure grant funding and to send a message that the family wasn’t making a lot of money taking care of people’s kids, Stewart said.
In the past three years, he estimates losses totaled between $2 million and $2.5 million, though funding support related to the pandemic “went to keeping the doors open,” he said. “We couldn’t have sustained it otherwise.”
He had been in talks with a national child care entity about acquiring Apple Tree centers when the deal fell apart around Thanksgiving, he said.
“Literally everything is moving one day and dead the next,” he said. “We thought we had it solved, and it wasn’t going to disrupt anybody’s life.”
Instead, hundreds of families scrambled to look for new options as news came out that the centers would close by Jan. 11, though there’s been “remarkably little attrition” so far, he said.
In the days that followed, multiple people reached out about taking over the centers, “which just blows my doors off,” Stewart said. “I never would have predicted that. Some of them are highly reputable leaders. So I’ve started trying to let (people) know I don’t think you’re going anywhere. I can’t tell you exactly what the solution is, but there are enough people involved I think by the grace of God we’ll be able to keep them open.”
While Stewart is working through his options, he said he is open to additional conversations and can be reached at 605-575-3851.
