• Andrea Lillo

Elder-Beerman touts textiles

NEW YORK — Domestics is one of six key businesses for Midwestern department store retailer Elder-Beerman Stores Corp., Fred Mershad, chairman, ceo and president, told analysts at the Wall Street Forum held here last week.

"The number-one traffic area is textiles" in the home store, which is 20 percent of the department store's business, he said, and the company will concentrate on it going forward.

Elder-Beerman is "the dominant retailer" when it comes to domestics, he said. The company has seen a declining bridal business, he added, due to the "casualization of America" as well as couples not registering as much. So the company will shrink the square footage for tabletop and expand its bedding and bath instead.

Mershad also believes that the economy is currently in a recession, and items most affected by recessions are furniture and big-ticket items. But when those sales are down, domestics are up, he said, since one can redecorate less expensively with new textiles rather than new furniture.

The company announced new initiatives last August to improve its market share with a value merchandising strategy, concept store base growth and a streamlined organization. The company surveyed 9,200 Elder-Beerman customers and found that the store captures 28 percent of the money the customer spends on its types of goods. If the company were to raise that to 35 percent, Mershad said, that would mean an additional $200 million in sales. Last year, the company increased its sales 3 percent from the previous year, to $687 million.

The survey also found that 61 percent of customers always comparison shop and 56 percent bought an item in another store besides Elder-Beerman because of price. As a result, the store is reworking its pricing structure and will expand its opening price points.

Increasing inventory turnover is also critical, Mershad said, because the typical shopper visits an Elder-Beerman location 16 times a year.

Elder-Beerman's concept stores now number six, with three more to open this fall, and five more planned for 2002. Targeting a younger customer, the concept store features centralized service centers, which have been so popular that they were rolled out to all the stores, he said, and its new systems are three times faster than before.

The concept stores also have wallscaping and fixtures to maximize selling space, resulting in $22 more sales per square foot in the concept stores as compared to the traditional stores, he said. And from any point in a concept store, a customer can see 75 percent of the store, he said. The concept store's home department was modeled after Bed Bath and Beyond, with floor to ceiling fixtures.

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