Anna's Linens Roars Into The Carolinas

Gastonia, N.C. — Anna's Linens boosted its square footage by 5% in a single day last week, opening a dozen of the 14 former Plej's stores it acquired late last year. As the Costa Mesa, Calif.-based retailer adds new markets along the East Coast, it recently passed another milestone: more sales now come from east of the Mississippi than west of it.

Anna's sales through the close of the fiscal year on Jan. 30 were “good but not spectacular,” said Alan Gladstone, chairman, president and ceo. Anna's blue collar customer base was pressured by higher gas prices, and Anna's was challenged by the highly promotional retail environment, he said.

“I've never seen so many one-day sales and two-day sales,” he added. “We elected not to take part. So we gave up some sales, but our margins remained strong.”

Although the company put the brakes on a plan to go public — largely due to the Plej's purchase as well as store damage from Hurricane Katrina, Gladstone asserted — Anna's still sees an initial public offering as an eventuality.

“It's been my desire since the beginning to take this company public, and that hasn't changed,” he said.

What has changed, in increments, is the merchandise assortment in Anna's stores. The new units opened last week reflect Anna's expansion into hard home categories such as self-adhesive vinyl tile packs, framed art, wicker hampers, plate sets, cutlery sets and bathroom etageres.

“We are definitely enamored with the margin on non-bed and bath,” said Gladstone. “And our customer has been asking us for more categories.”

Anna's is accommodating those hard lines in three ways, Gladstone said. The company has edited back slower-performing textiles SKUs, offering fewer colors or patterns on particular items. In addition, the current store format calls for 13-foot ceilings, to allow for more vertical merchandising, and new fixturing in the sheet department frees up space.

Textiles continue to dominate the assortment; the window category rings up $100 million in sales between curtains and hardware, he said.

“Window has been and will be the cornerstone of Anna's,” Gladstone remarked.

By the end of the first quarter, Anna's will have already opened 25 units. The Plej's maneuver has put Anna's ahead of schedule to open 50 stores during 2006. The company bought the stores out of bankruptcy, then refurnished, refixtured and merchandised the units in a little more than a month, Gladstone said. Plej's staff was rehired and “trained in the Anna's ways.”

Next on the agenda: Anna's will become the first retailer to take on the reconstituted Cannon brand next month. The company holds no exclusive on the brand, nor does it seek one.

“Somebody else will get Cannon eventually, and that's okay,” Gladstone said. “We're ready to compete; that's what this country is all about.”