Bigger is better
February 12, 2001,
For a decade or so, we've been hearing all the pundits talking about how overstored America was, and the situation became even worse as companies ran out to open more new stores.
And the home textiles segment, and home furnishings stores in general, are no exception.
We've overstored-and more significantly, overstored where the third or fourth player in the market should never have opened.
The market's positive response to JCPenney closing 44 stores was greeted with praise. But few noted that of the 41 announced closings, more than half-23 stores-were under 100,000 square feet. Now one could say that these were stores opened when Penney was a small-town merchant and were there to serve there communities.
Seven of those 43 under 100,000 square foot units were opened in the 1990s! How could management have even considered making an investment in stores of this size that were so counter to the company's overall strategy?
Smart retailers over the years shut and relocate stores in specific markets where the landscape has changed. Wal-Mart is one that has followed this game plan for years. It typically announces its store openings and specifically notes relocations/conversions of Wal-Mart stores into bigger units.
Closer to the home textiles world, both Strouds in Chicagoland and HomePlace in Atlanta were squeezed by the powerhouses-Bed Bath & Beyond and Linens 'n Things. Neither should have even made the effort in those markets.
In 1999, the latest year with full-year records, Kmart converted 588 stores to its Big Kmart format, shuttering a host of smaller units that didn't fit with its format revision.
And Target is accelerating its SuperTarget expansion as part of the process of relocating existing Target stores.
The evolution of stores-opening and closing, reinventing to be on the cutting edge-is what retailing's all about.
Let's congratulate those who are participating in this evolution, though there are some who perhaps have waited too long to take the step.
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