Hancock store-within-a-store puts focus on home

By Andrea Lillo -- Home Textiles Today, 10/14/2002 12:00:00 AM

NEW YORK —

After introducing its store-within-a-store home decorating concept three years ago, Hancock Fabrics said the area now represents 29 percent of its sales, and the company believes it may reach 40 percent within a short period of time, Larry Kirk, chairman and ceo, told analysts at McDonald Investments' Consumer Growth Conference here.

"We will put more emphasis on the home decorating and specialty side of our business," he said. "Decorative fabrics and home accents are high-ticket, high-margin products in a high-growth segment, and our customer count, as well as the average ticket size, is moving up."

With finished home decor products and Waverly fabrics in 1,200 square feet of space, the concept attracts a larger customer demographic of customers who sew and customers who don't sew, though Kirk stressed that Hancock will not ignore its traditional sewing customer.

All new and renovated stores will incorporate the new concept, which is currently in more than 225 out of its 435 locations, with some 280 to 300 more planned by the end of the year.

Kirk said the stores with this section have seen immediate accelerated high-margin decorating sales, and as those stores mature and more convert to that format, he expected to have more growth in that category.

"Our business is an idea business, and we try to put more ideas and new and fresh products in front of customers, and it's working," Kirk said. He added that he believes the customers of Michael's, A.C. Moore and Bed Bath & Beyond are Hancock's customers too.

Despite having stores in 42 states, Kirk said the chain sees plenty of opportunity to increase its store base, especially in new markets. Currently, Hancock does not have units in the Pacific Northwest states of Washington, Oregon and California; the Plains states of Oklahoma, Kansas, Nebraska and Colorado; the Northeast; and Florida. In the past, Hancock clustered its units together to share the costs of newspaper advertising. But now that it uses direct mail and TV and cable advertising to reach customers, "the need to cluster stores is not as important," he said. Towns with populations of 40,000 to 50,000 people, for example, are prime growth opportunities, with the benefits of cheaper rent and available labor.