Cost Plus to Focus on Home

Joan Gunin, Michele SanFilippo, May 30, 2005

Oakland, Calif. — Cost Plus is focusing on higher-margin items and is reaping some success in areas such as bedding, pillows, floor coverings, collectibles and candles. The company also plans to open 30 stores this year and close five in existing markets.

During its first quarter conference call, executives said the company is positioning itself to be less dependent on promotional areas, and expanding the home décor business. Cost Plus is trying to add interest to merchandising the home area by color blocking the assortment, displaying three beds and adding 15 rug arms to all its stores.

Another differentiating point for the company moving forward will be a more balanced combination of seasonal and core products. Cost Plus said it will always be a sku-intensive brand but is working to keep inventories down by controlling them at the individual buyer level.

In addition, Cost Plus' marketing will have a younger appeal this summer, kicking off with a new campaign in July in four test markets: San Diego; Atlanta; South Fort Worth, Texas; and Kansas City.

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