Big Lots' Home Category Still Going Strong

Big Lots is seeing its home business – including domestics and home décor items – incline steadily in sales, a trend that started in the second half of 2009 and continues today, the retailer said during its presentation at the Barclays Capital Retail and Restaurants Conference late last month.

Joe Cooper, evp and cfo, said shoppers' response to home-related items has been “strong,” thanks to several recent improvements in both closeout opportunities and the general economy.

“We've talked about the fact that we had opportunities from a qualitative nature and a mix nature,” Cooper said. “We need to get better, and we were doing that in 2009. So, we saw our home business improving in the back half of 2009 into 2010. Part of that was better goods and better merchandise. But part of it was demand for that merchandise, which we're seeing with other retailers, so that might be indicative of improving [consumer] sentiment. We are definitely a fan of improving economic environment. We believe we would flourish much more in an expanding economy.”

Cooper noted this is especially good news considering 70% of Big Lots' product mix comprises five discretionary categories. The 30% balance is consumables – “our single largest category, and it is heavily branded and heavily closeout,” he added.

Among the “highly discretionary in nature” categories, including home, each comprises about 12% to 15% of total mix.

While food and consumables represent the anchor of Big Lots' current assortment, the 1,367-unit closeout chain is optimistic for this year and 2011 about its discretionary departments' performances.

“Across the retail landscape in the last three to six months, we believe the discretionary spending environment has improved and we are well positioned for future sale growth,” Cooper said.

Home Textiles Today Staff | News & Commentary

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