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Family Dollar to revamp approach to textiles

Family Dollar will reposition its home textiles business this summer, and customers will see a "seismic change" as products from new vendors are brought in and looks will be coordinated across departments, including table linens, shower curtains and comforters, president and coo David Alexander told HTT following the U.S. Bancorp Piper Jaffray consumer conference here last week.

Home textiles account for roughly 6 percent of sales, or approximately $250 million in 2002, Alexander said.

Areas such as domestics, home furnishings and home fashions provide opportunity for the chain "because of the positive changes in fashion, and we can also improve quality and standards in these areas," he said.

Already, the chain, which used to carry only muslin sheets, has since switched to percale. The quality is similar to product at Kohl's and Linens 'n Things, Alexander said.

Quality has changed dramatically in the dollar stores, Jim Kelly, vice chairman and cfo said, from "very suspect merchandise" 10 years ago to better higher quality and consistency today.

"More and more vendors are willing to sell to our channel; they realize it's the fastest growing niche in retail," said Alexander.

Forty percent of goods are imported. "We're very aggressive and active in the importing arena and will continue to do so," said Kelly. Thirty percent is branded.

The company uses computer models to predict sales impact in a market based on ethnicity, demographics, and other variables.

It also targets the middle-income market. "We're a neighborhood draw," Alexander said, once customers see its better values in such items as toothpaste than grocery stores.

With an eye on adding 3,000 units in existing markets and 2,000 in new ones, Family Dollar aims to double its store base, currently at 4,800 units.

Sixty percent of its openings slated for this year will be in urban markets — communities of 75,000 people and more — though its model is ideal in both rural to metro areas, executives said.

The retailer has lowered its store opening count this year to 475 because of the more difficult issues in urban markets, such as procuring real estate, though these stores outperform the others in the chain once they are open.

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