Big Lots in major home lines upgrade
March 9, 2007,
Columbus , Ohio – Big Lots has sharpened its fix on its more upscale customer demographic and will spend the next three years tweaking its merchandise mix and marketing to cater to the more affluent shopper.
C hairman and ceo Steven Fishman during the company’s earnings call today that Big Lots will expand the footprint of domestics “to capture some of the upside volume that we’re not getting today.” Home Textiles Today research pegged Big Lots 2005 home textiles sales revenue at $402.0 million.
Home, furniture, and electronics were the bright spots during the fourth quarter, as the 1,375-unit chain’s net income rocketed to $104.3 million, six times its net income of $14.7 million for the same period one year ago. Comp store sales rose 4.6% for the quarter. For the full year, profit was $124.0 million, compared to a net loss of $10.1 million in 2005. (Results based on continuing operations only were less dramatic, as two major factors are not included – the activity of 130 stores that were closed in January, and the results of former Big Lots division KB Toys.)
This upscaling shift comes upon the retailer having recently confirmed through research what it said it already believed – its core customer is not a lower-income or an ethnic minority. Rather, the customer has a higher household income than the national average. Fishman said the company has found, “These customers are willing to pay more for quality and branded goods, and price point is not an inhibitor.”