Jo-Ann Tightens Seasonal Strategy

Retailer Aiming to Improve Sell-Through Rates and Reduce Markdowns

By Cecile B. Corral -- Home Textiles Today, 11/27/2006 12:00:00 AM

Hudson, Ohio —

Jo-Ann Stores is revamping its lagging seasonal business with new buying practices and a more meaningful merchandise mix. "We've implemented new seasonal buying disciplines to improve sell-through rates, reduce markdowns and ensure that we never again carry over seasonal merchandise from one year to the next," Darrell Webb, chairman, president and ceo said during the retailer's third-quarter earnings conference call last week.

Webb said tighter buying rules and deeper markdowns to clear inventory have resulted in less clutter and more room for fresher product on the selling floor.

Already, the 814-unit chain bought 27.5% less merchandise for the Halloween and fall selling periods. "We made the decision to walk away from unprofitable seasonal sales," Webb explained.

Net earnings for the third quarter were $0.1 million, compared with a net loss of $4.1 million in the prior year third quarter. Net sales dropped 2.6% to $461.9 million from $474.2 million in the prior year. Same-store sales decreased 5.4% for the quarter.

Looking ahead to next year's third and fourth quarters, Jo-Ann's seasonal merchandise team — just returned from Asia — is preparing a collection of merchandise with "more consistent taste and quality." Webb said.

The shopping experience is also top of mind for Jo-Ann's; entrances and aisles have been cleared and new cleaning standards introduced. The retailer is also investing "a great deal of time and energy" toward improving its in-stocks on basic merchandise, and is rolling out new radio headsets to its 172 superstores for better customer service.

Longer term, Jo-Ann will reduce its new store openings for next year to six — five 35,000-square-foot stores and one in the 25,000-square-foot prototype — all of which will be made in an updated format featuring wider aisles, lower fixtures, improved sight lines, better signage, and other enhancements.