Merchandising shift

CLIFTON, NJ— Linens 'n Things is initiating or expanding a series of merchandising and marketing strategies intended to drive sales and profits through the critical fourth quarter and beyond.

Changes will be seen in soft windows, regional marketing and a continuing push into specialty foods, in addition to already announced merchandise exclusivities, the company said in a conference call with stock analysts last week.

The effort comes on the heels of a third quarter that yielded positive earnings on improved but still modest comp-store growth influenced by category fluctuations.

The retailer is expanding its soft window treatment business, which it identifies as a large but underpenetrated market segment. President Steve Silverstein said LNT has added inventory, dedicated staffing and restructured store management to capitalize on the perceived opportunity.

"Windows provide an important point of differentiation in the marketplace," he said. "We [also] recently introduced Nautica windows to complement the strength of that fashion bedding brand."

The chain is also extending its initiative to merchandise more regionally, refining assortments in fashion bedding to "more appropriately reflect regionality." Early test results have been promising, Silverstein said, and assortment changes are currently being implemented in all stores.

These initiatives join the recently announced exclusive Waverly Home Fashions program, which is currently shipping chainwide and will launch next month. That program includes proprietary lines in fashion bedding, bath, decorative pillows and window treatments, along with housewares, kitchen products and area rugs, Silverstein said.

LNT is also significantly expanding its presence in specialty foods, according to Silverstein. "Specialty foods is a new category and is rapidly becoming a more meaningful part of our business," he explained. "During the fourth quarter, we expect the business to more than double in volume over last year."

The merchandising and marketing drive follows a third quarter that saw strength in the company's core textiles and housewares businesses, offset by weak Back-to-School sales.

"In hindsight, we were too cautious in our Back-to-School assortments, breadth and inventory," Silverstein said. "On the other hand, as a result, we ended the quarter with limited markdown exposure."

Third quarter sales were driven by strength in the sales of sheets, quilts, duvets and window treatments. Those sales were buttressed by improvements to the company's in-stock position, which chairman Norman Axelrod said improved by 10 percent since the beginning of the year.

Axelrod indicated that, while it may be some time before LNT returns to its historic growth levels, he's optimistic the company is gaining momentum toward that goal.