LNT plots growth for stores, PL
March 5, 2001-- Home Textiles Today,
NEW YORK -Tripling in size in less than five years, specialty retailer Linens 'N Things will continue to grow in its store base footage, proprietary product and new businesses, said Steve Silverstein, chief merchandising officer and executive vp, at last week's Bear Stearns retail conference here.
With "a lot of steam left in our growth engine," Linens 'N Things is "gaining market share at the expense of department stores and weakening national chains such as JCPenney," he said. With a $75 billion home furnishing market, including textiles, decorative accessories and housewares, he said, the specialty channel is the fastest-growing segment.
"We win with the consumers hands down on assortment and selection. Nobody offers a wider variety of product brand and value," Silverstein said, noting that the retailer offers 120 sheet patterns, which is double what department stores offer and more than double than discounters.
With 2001 sales projections of $1.9 billion, Linens also offers hard-to-fill categories that are difficult to operate, he said. For example, Linens is one of three major players in the window treatment business that offers a broad selection, he said. Other areas are table linens and bed and bath. "These are examples of the categories we support very differently than mass or department stores."
He continued that Linens provides "an ease of shopping environment without the hassles of being on the third floor or, worse, the cellar of a department store. And we offer more variety beyond anyone's imagination."
For 2001, Linens will add 60 new stores-"the most we've ever opened," said Silverstein. Linens, in fact, feels that there is tremendous opportunity out there for additional store locations. He pointed out that the market share for both Linens 'N Things-along with that other leading specialty retailer-combined have less than 5 percent in this area.
And as other retailers consolidate, said Bill Giles, senior vp and cfo, "we will continue to take market share from them." He added that Linens has had a consistent compound annual growth rate of 22 percent.
Silverstein believes that Linens 'N Things occupies less than half of the Metropolitan Statistical Units in the country. "There is no existing market today we believe is saturated," he said. "We'll continue to look for opportunities to backfill," growing 20 percent in square footage a year. More than 50 percent of opening stores are in existing markets.
Growing the Linens 'N Things Home brand is also key. "The margin potential for proprietary product plays a significant role in our strategy," he said. Earlier, it was about 10 percent of the total offering, but it will grow to 15 percent, with the potential of being 25 percent or 30 percent in the long term.
He continued, "For most of our vendors, we represent their future. Undoubtedly, we are the growth vehicle for our key vendors; and as a result they have to service us better, and we increase the bar." He did add that the retailer remains "committed to national brands."
To increase the sales per store, Linens will try new businesses to enhance stores, and Silverstein included area rugs and casual furniture among these. Specialty product such as quilts will also be further developed. The "Things" part of Linens 'N Things continues to grow, and is 42 percent of the merchandise.
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