Anna's Banner 2005 Continues in Vegas

Las Vegas —For Anna's Linens, this is shaping up to be a year of milestones.

The 17-year-old company recently celebrated the opening of its 200th store, and broke into the ranks of the Top 20 home textiles retailers with 2004 sales of $214 million. It expects to become a public company before the end of the year, which it will cap with new market entries into Detroit, Washington D.C./Baltimore, Milwaukee, and Tampa/St. Petersburg, Fla.

Store No. 200 — Anna's 7th Las Vegas unit — also displays some subtle shifts in merchandising. Although the mix still favors bedding, bath and window, it also includes slightly more hard lines than in the past. Cookware is the latest newcomer to the assortment, and Anna's has expanded its offerings of candles, potpourri, silk flowers and small-scale storage items such as hooks and bathroom caddies. Display walls on the periphery of the store now extend to 11 feet in height. Crown molding has been added to the architecture.

“Anna's is a better-looking store, a better-value store with better locations than at any time in our history,” said Alan Gladstone, chairman and CEO.

Those locations — while still targeting blue collar, primarily ethnic neighborhoods — are also showing more flexibility.

Anna's core real estate has been inside-the-beltway or inner-city neighborhoods, and for several years abandoned Kmart boxes made prime targets for Anna's stores.

But Anna's is also finding a place for itself in sprawling new communities populated by working families. Such is the case with its new 10,000-square-foot store in the Silverado Ranch shopping center on the border between Las Vegas and Henderson, Nev. The store shares a pad with Target, Pier 1, Nordstrom Rack, Marshall's, Famous Footwear, Michael's and several smaller, value-oriented stores.

Its ninth Las Vegas unit, set to open in March 2006, will be located in a shopping center fronted by a Wal-Mart superstore — not for the first time.

“Our desire is to be where the traffic is. We believe the traffic is with Wal-Mart and Target,” Gladstone said.

Still, the stores continue to maintain an average footprint of about 8,000 square feet, sometimes slightly higher. Also, the merchandising philosophy still emphasizes value as well as low prices. But while the top price point remains a $99.99 bed-in-a-bag (the opening price point is $29.99), Anna's now also offers an endcap of 500-count sheet sets for $79.99 — a program it added in late spring.

“We didn't really need sheets to drive traffic, so we (previously) stopped at 300-count. But our stores told us we had to do better,” Gladstone said.

However, he cautioned, a bump in thread counts doesn't signal a corresponding escalation of pricing on top-of-bed above the $99.99 mark.

“With the environment out there, we don't see any need to go over $100. If anything, the prices are going south,” he said.

Anna's celebrated its 100th store opening just two years ago, and its accelerated growth plan should put it between 215 and 220 stores by the end of 2005. Next year's plan calls for an additional 60 stores, although the company won't announce its new market entries until fall.

Because it targets a niche demographic rather than the mass market, Anna's sees the potential to grow to 1,000 stores. The company is already laying the groundwork for that expansion, Gladstone said.

“We are building infrastructure ahead of our growth in logistics, personnel and systems,” he said.

The company also is stepping up its direct buys.

“Our size has its advantages,” he said. “This year, we're bringing in five times more containers than last year, and we expect the same next year. It's the wave of the future.”