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Ames gains an edge with smaller stores

NEW YORK-Discount retailer Ames may not be as big as some of its competitors, but that's one of its strengths, said Joseph Ettore, chairman and ceo.

Speaking to analysts at last week's Bear Stearns retail conference, Ettore said that with the average Ames store at 60,000 square feet-compared to the 110,000 square feet to 120,000 square feet average sizes of a Wal-Mart or Kmart-and an easy-to-navigate layout, customers can get in and get out quickly.

"Wal-Mart does have a bigger assortment in most departments than we have," he said. "But in many cases it's almost a planned visit to that store." In addition, Ames' research finds that many customers visit Ames more in an average month than they do a Wal-Mart. "That's a strength just based on the customer we cater to."

That customer is overwhelmingly female, from 18 to 54 years of age. "We still feel that we served this underserved customer," he said, a customer who "a lot of retailers, especially discounters, have really turned away from, looking for a higher-end customer."

Another Ames advantage is how the departments are laid out in the stores, he said. Ames places its apparel, a low-profile department, in the center of the store, so "you can really see anywhere in the store." The corners of the stores, which Ettore called "soft corners," allow it to highlight its better-selling departments.

The home lines have "always been the backbone of Ames' business," he said, representing 42 percent of sales.

A high/low retailer, Ames runs 53 circulars a year, with two dropping during Thanksgiving week, with a distribution of 17 million households. Forty-seven percent of the company's sales are off the circulars, he said.

Ames also puts in "a lot of efforts to micromarket our stores." With 141 stores located in college towns, Ames focuses on its Back to Campus program. One hundred other stores are located in resort towns, and those stores are stocked with everything the vacationer may need, he said.

With regards to its competition, Ames has 374 stores located within 10 miles of a Wal-Mart, and 323 within 10 miles of a Kmart.

Ames had sales of $3.7 billion for last year. "We have a loss for the year 2000," said Rolando de Aguiar, executive vp, cfo and chief administrative officer. "But with all of our initiatives for this year, we will have a much different picture for 2001."

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