LNT: Textiles will give up in-store real estate
July 28, 2003,
Clifton, NJ — Acknowledging that its textiles sales were soft during the second quarter, Linens 'n Things said it will slightly reduce the category's footprint in stores to eliminate duplication. LNT also plans to slash promotional and opening price point goods by 10 percent to 15 percent, to further expand private label programs and to strengthen its sourcing capabilities.
But the textiles business remains a "top priority," cfo William Giles said during LNT's second quarter conference call last week. "It has the full attention of our senior merchandising team," he continued. "Our initiatives to improve our textile business are focused on offering newness as well as strengthening our value proposition."
During the second half of the year, the company will concentrate on its core assortments and will be more selective with its seasonal offerings, having experienced soft sales in the second quarter as a result of cool weather conditions, especially in the Northeast.
The soft seasonal business during the quarter forced the company to slightly increase its markdown rate over last year "to clean our inventory," Giles said.
Added Norman Axelrod, chairman and ceo: "We added too much opening price point and promotional product to our assortment, and we are reducing those skus somewhere in the 10 percent to 15 percent range."
Looking forward, LNT will also concentrate more heavily on its proprietary offerings. "We expect our gross margins to improve slightly as we continue to leverage our supply chain costs and increase the penetration of our proprietary products," Giles said. "Our proprietary product is an important point of differentiation, providing our guests with high-value merchandise in categories not well served by national brands."
With the company's endeavors to more regionally merchandise its current roster of 415 stores — and 13 new units slated to open before yearend — LNT will slightly reduce in-store space allocation of textiles to make room for more "things" products.
But the role of textiles will continue to be important, Axelrod noted, adding that major announcements regarding new endeavors in the textiles area will be made in the coming weeks and months.
"Expect the rollout of some new and exclusive textiles programs in the third and fourth quarters that will separate and distinguish us in the marketplace," Axelrod said.
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