Fortunoff Targets Younger Consumers
June 19, 2006,
As the first non-family ceo of Fortunoff's, Arnie Orlick is determined to protect and enhance the retailer's presence with its large traditional core customer base — while attracting a new customer to the store.
That said, Orlick's goal “is to add to our assortments to attract a new customer base: a younger, more casual customer. The incredible assortments in every department is what has made Fortunoff's,” but in many instances the assortments have become over-skued, and many are not relevant to today's customers and lifestyles.
Orlick, a veteran general merchandise retailer, joined the company in early May, and has set a number of priorities both in the back of the store and on the floor to bring the third-generation retailer into the 21st century. Currently there are four full-line stores (none with apparel, but with a dominant fine jewelry business), 11 satellite stores that sell outdoor furniture during the spring/summer seasons and change to furniture during the other seasons, and two jewelry and gift stores.
When the fourth full line store opened in White Plains, N.Y. in October 2003, Elliot Mayrock, one of the family-member principals, said the company did about $400 million and the White Plains store was projected to add about $100 million to the total. Orlick noted that last year the company was behind plan, “but that home textiles was up strong single digits.”
The White Plains store, in fact, is the target of a major merchandise revise, Orlick said. “It needs to shift from its heavy traditional assortment. The customers there live a different lifestyle — a significant difference. It's a more casual, younger lifestyle, and the area has incredible pockets of wealth,” factors that must be taken into consideration in the assortment, he emphasized. Now, he said, “The stores are 90% to 95% traditional. It's too much.”
“There's not enough casual and transitional merchandise. We need to get balance in our assortments. We're looking to 'Wow!' customers with our merchandise.”
The shift from its heavy emphasis does not mean abandoning what made the retailer successful, Orlick explained. More accurately, it is recognizing that there is a vast consumer base that the retailer has not addressed. And he fully intends to move to attract them with the assortments and service — a move that can be achieved within the same store size “by editing down” areas that have become over-assorted.
The mantra for Orlick is four-fold: get the products, have the people who can sell them, sell them in a powerful fashion, and market them well. As far as price is concerned, Orlick emphasized, “We will not be undersold.” The store is not looking for the lowest price points, and uses every day low pricing and manufacturers' suggested retails — “and we will match any competitor's low price,” he stressed.
Looking at home textiles specifically, “The floor is beautiful, but we have to realign the assortment and presentation. The most important change will be developing assortments for the more casual lifestyle customer. But we won't give up our traditional customer, who is the nucleus of our business. We'll edit it down.”
In sheets, for example, Orlick pointed to the good/better/best assortment “that does about 60% of our bedding business without the designer collections. With the designer collections, solid sheets represent some 35% to 40% of the segment.”
As for designer programs themselves, Fortunoff's carries a broad range including Lauren Ralph Lauren, Calvin Klein, Donna Karan, Nautica, and Tommy Hilfiger, and “they're a necessary part of the business. They run hot and cold in success stories, but they bring a great fashion sense and quality.”
The window coverings department is viewed as a major asset by Orlick. “It's a really difficult business, especially in ready-mades. But we run a clean business with good margins and it differentiates us.” In custom window coverings, Hunter Douglas is the key supplier.
And as throughout the store, much of the home textiles sourcing is increasingly being done direct, Orlick said.
Fortunoff's will also begin a new customer loyalty program in the fall with final details still being worked on. “We are emphasizing building a better customer charge base; now we have more third-party card purchases. We're working to give customers a good enough incentive to build our own database.” This will enable the company to better identify customer purchase trends and needs.
Similarly, the company will be expanding its bridal registry program. “We already know a lot about their purchases and wants. But we know the average bride registers at three places, and we want to know what she wants from the other two.”
“We also are investing and spending on IT,” said Orlick. The new programs in development will range from merchandise analysis to back of the store delivery challenges.