Big Lots looks ahead
-- Home Textiles Today, 6/10/2009 1:53:00 PM
New York--Big Lots is in a “growth mode” and plans to open 45 stores this year, which is double from last year, according to Steve Fishman, chairman, ceo and president. Fishman made his remarks this morning during the 29th Annual Piper Jaffray Consumer Conference here.
Big Lots, the nation’s largest broadline closeout retailer, carries a wide range of merchandise, of which 15% is related to home including domestics and home decor. Big Lots currently operates 1,345 stores in 47 states with its highest concentration of stores located in California, Texas, Florida and Ohio.
Big Lots growth strategy, which the company refers to as WIN which means What’s Important Now, is focused on merchandising, real estate and cost structure. The retailer plans to focus on brand names, quality and value. “We are 30% consumables, not 50% or more like other discounters,” Fishman said. “Our performance in discretionary categories has been in line or better than most of retail but it’s been challenging and it’s been impacting our comps negatively for the last two or three quarters. However, at the same time, discretionary spending is challenged and we put together a string of record quarters.” Fishman said. The first quarter of 2009 represented the company’s 10th consecutive quarter of record EPS performance. The company’s operating profit also rose to 5.3%, up from 5.1% last year.
When addressing what retailers could benefit in the current economy of decreased spending, Fishman said, “We happen to believe we are positioned to be the beneficiary of that.”
On the real estate front, the retailer is poised to add stores and take advantage of the slowed market. “We’ve moved counter to the market. Prices are now affordable for our model. The number of vacancies in our size stores are at levels we haven’t seen in over 10 years,” Fishman said “We’re seeing availability in highly desirable markets that we’ve not seen in several years. We will be opening a large percentage of our new stores in 2009 in coastal markets, areas with growth and population density.”
The retailer will also be testing an updated store layout in some locations and also has plans to open a handful of stores that are 20,000 square feet and less.
“We’re truly a unique and different business and there is significant barriers to entry in closeout retailing. Our merchandise mix is highly discretionary which should position us to become a beneficiary when the consumer stabilizes or potentially begins to spend more money,” Fishman said. “We happened to believe that great value will never go out of style.”
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