LNT's Moore Seeks Momentum
February 7, 2005-- Home Textiles Today,
Six months into his role as Linens 'n Things president and chief operating officer, Jack Moore took the opportunity during the company's year-end conference call last week to lay out his plan for recapturing momentum on the merchandising side of the business.
This year's initiatives will include more direct sourcing, consolidating its business with strategic vendors, and a more aggressive approach toward faster-turning fashion and trend-right merchandise. Also on the agenda: sku reduction and improving the markdown management associated with transitioning into new assortments.
“Linens 'n Things has a strong product offering, but our assortments are not consistently focused on our target core customer — the home enthusiast,” said Moore. “One of my greatest passions is to get the company focused on trend merchandising. In a large industry where we compete with many retailers, there is a need to position ourselves to be more fashion-forward.”
The company also plans to add at least two new brands by the third quarter, one on each side of the business, according to LNT Chairman and CEO Norman Axelrod.
Axelrod handed over the majority of the analysts' call to Moore, who outlined his top priorities for the year:
People: Hire a chief merchandising officer; improve training and set expectations higher, especially in the areas of assortment planning, space management and replenishment;
Product: Focus assortments and refresh them more frequently; build out LNT's branded position;
Process: Get the front and back ends of the merchandising process working together more smoothly to drive productivity.
“We have not been consistent in executing our plans,” he said. “I will focus my efforts on driving consistency throughout our organization, which our CMO will build upon.”
LNT also plans to clear away clutter in the stores by focusing on fewer styles and paring skus. That strategy will allow the retailer to make stronger statements in both brands and classifications, he said.
Sales per square foot are currently running at about $170 — roughly the same level the company reported in spring 2003. LNT is still working to get back to $185 per square foot and ultimately $200, said Bill Giles, executive vice president and chief financial officer.
“But we've got to take this one step at a time, and we've go to make improvements on the operating margin,” he said.
The company ended 2004 with an operating margin of 4.7 percent, Giles said.
“We believe there's nothing that would prevent us from getting to a 6 percent or 8 percent operating margin,” he added.