Jo-Ann to reduce promotions
March 15, 2004-- Home Textiles Today,
In its transition from turnaround to growth, Jo-Ann Stores has reduced its level of clearance and promotional activity, restructured its superstore prototype, and will reconfigure its finished seasonal goods assortment, reported the company during its fourth quarter earnings release and conference call last week.
"(The reduction of the level of clearance and promotional activity) is a strategy we have now delivered on for two consecutive quarters," said Donald Tomoff, vice president of finance.
Finished seasonal goods, which includes decorative items and hard goods, but not fabrics or home textiles items, was the category "hardest hit" by the company's decision to be less promotional, said Brian Carney, chief financial officer and executive vice president.
The company's same-store sales for the finished seasonal category — which represented 14 percent of its total sales during the fourth quarter — were down 5.2 percent.
"Other than floral and finished seasonal goods, the rest of our core businesses (particularly fabrics and scrap-booking items) experienced positive same-store sales growth on improved selling margins during the fourth quarter," Carney added.
With business taking a turn for the better, last year Jo-Ann Stores introduced its new 35,000-square-foot superstore prototype — which measures more than 10,000 square feet less than the company's previous superstore format (45,400 square feet).
The newer, smaller superstores "display our destination assortments of crafts and fabrics in a visually exciting, yet more productive, format," said Alan Rosskamm, chairman of the board, president and CEO.
In 2003, the company opened three traditional stores and 16 superstores — 14 of which are the new prototype. Also, it remodeled four stores and closed 46 under-performing stores.
"The new format superstores have been well received by our customers and are performing well so far," Rosskamm said.
For 2005, Jo-Ann Stores expects to close about 70 stores and open 30 new prototype superstores and a handful of traditional stores. About 40 of the stores set to close will be shut down to accommodate a new superstore unit in the same market. The remaining 30 stores to be closed "are performance related," Rosskamm said.
"The goal is to see if we can open 35,000-square-foot stores and have them come out of the box all at the same top-line rate as the 45,000-square-foot stores," Rosskamm added.
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