Big Lots has big plans for textiles
Tracy Bulla -- Home Accents Today, June 16, 2001
NEW YORK — Home textiles are moving ahead at a strong pace at Big Lots, the newly renamed broadline closeout retailer formerly known as Consolidated Stores.
Home textiles accounted for some $262 million in revenues in 2000, said Michael Potter, chairman, president and ceo. Currently accounting for about 8 percent of the company's $3.3 billion in revenues last year, Potter sees this business "continuing stable growth at the company's pace, some 10 percent to 13 percent growth this year."
Potter, who discussed the company's changes at an investors' meeting sponsored by the Wall Street Analyst Forum here earlier this month, added, "there is a good supply of closeouts in home textiles."
Last year, he explained, was a transition year for the Columbus, OH-based company, as it moved to bring its disparate divisions under the same name, a move that will bring economic advantages as well as allow it to market the stores on a national basis.
Discussing the growing availability of closeout merchandise, Potter pointed to the "rapid shortening of the lifestyle of a product, now three to six months compared with 18 to 24 months in 1990." In addition, using 1998 as the latest date, he noted that "there were 25,000 product introductions and 23,000 product failures," a statistic that illustrates the availability of closeout merchandise.
In repositioning the company under the banner of Big Lots, management also conducted extensive focus studies "to determine consumers' likes and not likes" — the result of a declining customer count, although the basket size remained high, in part the result of a dynamic furniture business.
"We're now a customer-driven organization with customer-driven merchandising. We had a buy-side focus; we were the first call from vendors."
Now, Potter explained, "we are focusing on a reliable in-stock position, relevant hot deals, brand names, and emphasizing today's key categories — all with substantial price differentials."
One of the goals, he related, "is to maintain our entry price point customer, which is 53 percent of our base, while developing the mart shopper and the deal hunters that have higher household incomes. These are big growth areas."
As the stores are converted from the Mac Frugal, Pic 'N' Save, Odd Lots and Big Lots to the single Big Lots brand, the stores will be upgraded, cleaned up, become brighter and friendlier and offer better service, Potter said.
The single name will enable the company to use TV to help in building its customer base. At the same time, it will streamline its circular usage, with 26 scheduled for this year.
This change, Potter said, will enable the company to move into higher-density areas. "We love to be in malls with Wal-Mart, Kmart or Target. They bring lots of traffic," said Potter.