Big Lots focused on showing bigger difference
Kids Today Staff -- Home Textiles Today, November 17, 2004
COLUMBUS , Ohio — Looking to continue to differentiate itself, Big Lots Inc. is refocusing its merchandise mix with a broader breadth of closeout items, the company said during its third quarter earnings call today.
By next year, the company expects to raise closeout offerings to 60 percent of its total mix, up from 50 percent today, said Michael Potter, chairman and CEO.
"Our most important focus now is our merchandise content. Before, we swung it too close to traditional retail," he said. "We're now going after more unique closeouts and brand-name closeouts. Our buyers across all merchandise categories are more focused on prioritizing close-out deals."
Potter added that the company is "taking our open-to-buy management to a different degree, more tangibly calculating and restricting buying of non-closeout to increase closeouts department by department."
Over the third quarter, the company said it was challenged by a soft economy and escalating prices in gas and commodity goods, which directly affect the store's lower- to middle-income customer base. Traffic slowed during the period, but it was partially offset by positive average basket trends, which Potter said resulted from "continuing improvement in our home decorative business and the introduction of furniture in our West Coast stores."
Big Lots experienced sales improvements in several categories, namely home décor, which includes tabletop and frames, as well as stationery and hard-lines. Its expansion of furniture stores in the Western region also proved successful, Potter said.
The retailer posted a loss of $31.5 million, or 28 cents per share, for the third quarter ended Oct. 30 versus a year-ago loss of $6.4 million, or 5 cents per share. The loss included a $6.6 million charge under discontinued operations for KB Toys, now operating in Ch. 11 bankruptcy.
Sales grew 3.4 percent to $980 million, with comps down 1.4 percent.
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