LNT Plans To Get 'Better'
March 28, 2005-- Home Textiles Today,
Clifton, N.J. — Recognizing that its competitors at the discount department store level are “very, very strong,” Linens 'n Things is concentrating on becoming a dominant “better” retail destination for home goods, said Jack Moore, president/chief operating officer, during the Merrill Lynch Retailing Leaders Conference last week.
“We want to be extremely dominant in the 'better' segment of the business,” Moore explained. “We feel we have very, very strong competitors at the mass level that really dominate the 'good' category. We know we also have a lot of competition in the 'better' segment, but that is where we belong and want to be the first choice store for the home enthusiast.”
He added that the store will still look to offer limited “good” products in key items with sharp price points — “but it will be a very narrow approach,” and the broad breadth of LNT's assortment will be focused “in the middle of the pyramid.”
Related to this focus are several new merchandising initiatives for this year and beyond.
The store has a number of teams currently working on “the science of space, inventory and proper merchandise planning,” he said.
So far, LNT has determined it wants to reduce the number of vendors it works with and increase its own direct importing activity.
“We're spending a lot of time looking at the number of suppliers we have supporting us, the amount of skus and styles that support each business category, and we've established this year some very specific targets in terms of productivity per square-foot,” Moore said.
Added William Giles, executive vice president and chief financial officer: “As we continue to grow in size, we'll leverage our buying power with vendors. And, again, as we continue to reduce the number of vendors, we'll improve the productivity with each of those vendors. And as we grow sales, each of those vendors will become more important to us.”
Of LNT's current assortment, 20 percent is proprietary and directly sourced. The store hopes to grow that ratio to 30 to 35 percent in the future.
As it did last year with its furniture, area rugs and better sleep product categories, all of which were expanded, LNT is looking to continue that trend this year with other key categories. But the company did not offer specifics on which categories it was looking to build or add to its assortment.
“New businesses and expanded categories will be much more of a focal point,” Moore said. “Our plan is to drive more productivity four-foot section by four-foot section by four-foot section. Our 30,000 square-foot box needs to grow and change.”
Similarly, LNT plans to roll out at least one major brand per year, “maybe two,” Moore said.
“We want to be always introducing emerging brands that we think can add excitement and some buzz in the store,” he said. But, Moore said, it must be done in a balanced manner.
The store wants to concentrate on fewer yet more dominant brands. And it wants to carry fewer styles and skus to support those brands “to have more item velocity,” Moore said. “We'll also be looking for ways to connect the dots with certain brands, so you can feel they are very important in multiple categories.”
This year, LNT will work to improve the profitability of its Web site, which is not yet generating “a significant dollar amount,” but is nonetheless growing rapidly, Giles said. And the company is expecting to open 50 new stores this year.
Through these and other related initiatives, LNT hopes to raise productivity to the rate it was several years ago — $185 per square foot, “and ultimately higher,” Giles said. Currently, the store generates $168 per square foot.