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Home holds key for Costco

Carole Sloan -- Home Textiles Today, December 9, 2002

Costco Home, the newest piece of the giant warehouse club's various retail operations, could well change the landscape of home furnishings retailing.

And at the same time, its fate could well impact the way the core Costco Wholesale operates.

Discussing the impact of Costco Home as a potential success, Jim Sinegal, president and ceo, said, "It's more important to us as a company, rather than a new business. We want to build traffic in our stores."

He added, "What it could do is help Costco with bigger stores or add-ons to existing stores incorporating what is here."

The 102,000-square-foot store that opened here last week is primarily dedicated to furniture, with an assortment significantly broader and higher in price points than what is typically carried in a Costco Wholesale store.

The store has 70,000 square feet of selling space and 32,000 square feet of back office.

And the store "turned out better than planned. It retains the warehouse feel, but the merchants and merchandisers created a high-end feel in a low-cost operation," said Doug Schutt, senior vp.

Home textiles, he added, "offer savings so significant, it's very exciting. And I can see expanding the offer."

Home textiles acts as a significant accessory to the main furniture statement with every bed covered with a highly decorative duvet ensemble. Decorative pillows and throws are accents for many key upholstered furniture vignettes, and kids bedrooms have important home textiles from Sleeping Partners and California Kids.

Window coverings are offered both in-stock and custom order from Hallmart. Hunter Douglas is the supplier for decorative blinds and shades. Decorative trimmings are shown in a wide range of styles. Hallmart and Ashford Court are the primary suppliers for bedding and decorative pillows.

Area rugs are primarily from Feizy and Obeetee Gabbah, with a circular arm fixture in the center of a large number of piled-on floor rug sections. And area rugs are used extensively as the platform for the furniture vignettes.

"We've got a lot of rugs, and it's a big business. It could well be as high as 10 percent of this store's total," Schutt said.

Basic bedding is shown on metal fixtures similar to those used for decorative pillows. Key among the assortment is an array of Ralph Lauren pillows at $16.99.

While little of the store's offering is proprietary, Schutt pointed out the company's Kirkland Signature down comforter, which he said has higher specs than is typical in the industry.

All merchandise in the store is in stock, said Schutt. But the custom order segment could represent as much as 30 percent of the total volume. Management expects to "know in a couple of months, more or less, the results and impact from this store," Schutt remarked.

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