Cost Plus confident in turnaround bid
Carole Sloan -- Home Accents Today, September 20, 2007
Oakland, Calif. – The back-to-basics turnaround campaign at specialty retailer Cost Plus World Market is on track, the company said yesterday at its analyst day presentation.
“We have exited the collection business,” said Barry Feld, president and ceo, emphasizing that the company’s original retail model works better: “We are an item-driven business.”
“We were a discovery store,” Feld said of the company’s origins as a treasure-hunt retail concept on San Francisco’s Fisherman’s Wharf in 1958. He noted that by holiday 2004, “We completely walked away from that, to become a mediocre furniture store.”
The new focus returns to the original idea: “high-value, high-velocity items,” said George Whitney, svp merchandising.
The Cost Plus mix, Feld mentioned, includes 80% non-furniture items. A total of 40%, he said, is consumable goods, including exotic wines. The store currently offers a range of home textiles from table linens to bedding, with nearly all price points below $120.
Cost Plus saw 2006 sales climb 7.2% to $1.04 billion, but comps fell 3.3%. The company recorded a net loss of $22.5 million for the year.
In response to an analyst question where it was suggested that Cost Plus stock is undervalued, company management emphasized that the company intends to remain publicly traded, taking a position that they said will not even be reviewed for two years.