Big Lots' Home Category "Stabilizing"
May 4, 2009-- Home Textiles Today,
Big Lots' home department, which the off-price closeout chain admitted to be its "single most challenging business," has lately been showing signs of improvement.
During the 1,345-unit retailer's presentation at the Barclays Capital 2009 Retail and Restaurant two-day conference last week, Steve Fishman, chairman, ceo and president of Big Lots, noted the chain's home business has "stabilized."
But he offered a caveat.
"It is not good, and I don't want to give anyone the impression that we're really happy with it," he explained. "But it is not nearly as bad as it had been actually in the last 12 to 18 months."
Other noteworthy remarks by Fishman during the presentation included details about Big Lots' smaller prototype test.
The chain, which operates stores in 47 states, is preparing to test a 20,000-square-foot prototype by late September at four new locations.
"It will take a while for us to figure out if that works or not," Fishman said. "The thought process there is two-fold." Number one, he said, "There is about 20% to 25% more real estate available to us if we look at 20,000 square feet versus our typical almost 30,000-square-foot prototype."
And the second consideration, he continued, are "clearly the efficiencies of sales per square foot that we should be capable of getting out of a 20,000-square-foot locations."
Big Lots already has several smaller store formats in California, Florida and Texas — all "high volume and high sales per square foot." They were part of the retailer's acquisition of Pick 'N Save in 1998 and 1999.
"So clearly we'd love to be doing a lot more than $160 per square foot," Fishman said. "Those stores are doing $200 and $225 per square foot. In the right locations, that is another opportunity."
Big Lots' advantage in terms of its store prototype and format, he said, is that "we don't have to be — we don't have to be 30,000 or 20,000 or 25,000 square feet. If a location is right and there is a strong enough economic customer base within a three- to five-mile radius around that store, it presents a great opportunity for us."
He added that Big Lots is "not cookie cutter where on the right are consumables and on the left is home."