Canada’s tb!s on the Move
In March, Canadian discounter tb!s the bargain shop promoted U.S. retailing veteran Beryl “Jack” Buley to president and CEO. Buley was recruited by the chain in 2010 as executive VP and chief merchandising officer.
Buley brings years of retailing experience to tb!s, which started out as Woolworth’s Canadian division in the 1920s. Prior to moving north and joining the company, he served as division president of merchandising, marketing and global supply chain for the fast-growing Dollar General. And before that, he spent 16 years at Kohl’s, ending his stint there as executive VP stores, where he oversaw the chain’s entry into such key markets as Atlanta, Dallas, New York and California.
Chain Store Age talked with Buley about his plans for tb!s and the retail environment north of the border.
What’s your first priority as the new chief executive of tb!s the bargain shop?
It is to take what is already a terrific company — with a lot of great merchandise and good value for Canadians — and make it even better. We do business in rural areas, some of them remote, and we are also in suburbs and we have urban locations, so it’s very diverse. And the No. 1 priority is to take what we’re doing already and then to bring to all of these locations some of the things that U.S. retail has gotten so good at.
Just as with Dollar General, which has transformed a great deal over the last four or five years from a store that wasn’t very easy to shop to an excellent, shoppable retailer, my priority at tb!s is to take what they have and use the experience I gained at Dollar General to similarly elevate the tb!s stores. That’s why the private equity company, Genuity, that owns tb!s recruited me, specifically to bring my experience with and understanding of U.S. retail to position tb!s for success — especially given that Target is coming to Canada, and so is Dollar Tree.
Has tb!s, like its American counterparts in the discount category, attracted a new shopper — one who previously didn’t frequent discount stores — in the recession?
Not really, and that is largely due to the fact that tb!s occupies a different space than its American discount counterparts. tb!s is very much the same size and convenience-oriented concept as Dollar General, but its merchandise lineup is more balanced.
While Dollar General does 60% to 75% of its business in consumables (food, paper goods, chemicals, pet Supplies, etc.), tb!s has a more varied mix, with a third of its business in apparel, a third in housewares and\ seasonal items and toys, and a third in consumables. In terms of what is inside the store, it’s more like a small Walmart but with name-brand merchandise like T.J. Maxx and Marshalls. It’s a wonderful space to be in. Once we make the stores easier to shop and bring in even more convenience items, tb!s will be further enhanced, and that’s very exciting.
With the economic climate improving and more shoppers returning to full-price and even luxury retail options, how will you work to maintain the tb!s customer base?
There are two ways in which we will do that. First, keep in mind that the Zellers chain, which was acquired by Target and is a direct competitor of ours in about 20% of our markets, will be closed for a period of time while Target rebrands them, which means a whole new customer is up for grabs. And, second, we are going to make our shopping experience a whole lot better, adding more convenience, a pet department, a small automotive and hardware section, increasing the party goods, and then adding more consumables, all of which will allow us to expand our customer base.
What is the current state of retail in the Canadian market with regard to barriers to entry, market voids, etc.?
Target’s acquisition of Zellers is a perfect illustration of the barriers to entry into Canada, in that it is easier to come in and buy a chain than to try and Grow location by location. Seventy-five percent of the Canadian population lives within 200 kilometers from the U.S. border, so coming in and buying a chain was the perfect way for Target to enter since most Canadians are very familiar with the brand. And I think that other U.S. retailers that seek growth In Canada will do so via acquisitions. There is still a lot of small retail in canada — mom-and-pop stores and two- and three-store chains — and many will be ripe for acquisition.
How receptive are Canadian shoppers to American concepts?
I think there is a high degree of receptivity. From where I live, I get all of the Buffalo, N.Y., channels on my television, and I, like most Canadians, get lots of the U.S. commercials. So Canadians know U.S. retail. They are so excited about Target; they line up to cross the border and shop Black Friday sales at a whole host of U.S. retail stores, and they know who the top U.S. retailers are. They want J. Crew and Victoria’s Secret and Marshalls and Target. So I believe they will be very receptive to American concepts and U.S. retailers.
And I want to emphasize the fact that I relocated to Canada. I am not one of those executives coming in and out of the country each week. I am living here, and that allows me to understand the Canadian customer and to ensure that tb!s meets that customer’s needs.
What are tb!s expansion plans, and what kind of remodeling and redesign efforts do you have underway?
We selected 10 stores across Canada — a mix of urban, suburban, rural — and launched a remodeling program that added upfront coolers with convenience items such as ice cream and pizza, incorporated pets and automotive, and re-laid out the stores in a racetrack design with reorganized categories and updated signage. We made no structural changes to the buildings and added no square footage.
All 10 remodels are now complete, with the first opening on Feb. 10 and the 10th opening on March 29, and we will now watch the results and learn from them as we continue to roll out the concept from now through this fall.
A new approach to appliances at Kmart
HOFFMAN ESTATES, Ill. — The market on Friday cheered a move by Kmart parent company Sears Holdings to cut 700 positions from the appliance departments at 225 stores. Shares of Sears Holding advanced $2.67 on Friday to close at $74.03 after news of the layoffs was reported Friday morning by the Wall Street Journal.
Kmart spokesman Chris Brathwaite was quoted as saying the move will allow customers to check out appliances at any register rather than going to a dedicated register for appliances. But there also won’t be any specialized appliance-only staff people on hand near appliances. Instead, all Kmart staffers are being trained to answer questions about appliances, according to Brathwaite. There will also be a 1-800 number customers can call for help.
That is hardly the type of customer service appliance shoppers are used to experiencing at such other leading appliance retailers as full-line Sears stores, Home Depot, Lowe’s, Best Buy or HH Gregg. The move makes sense for Kmart though, since its stores are hardly a destination for appliances, other than the type that fit on a kitchen counters. These days, shoppers in the market for large appliances have done considerable online research and made up their mind about what model to buy before they set foot in the store. So the opportunity for a sales associate with minimal training at a Kmart store to influence a shopper’s purchase was quite low and therefore not worth the company’s investment in labor.
Kmart had expanded the number of stores with appliance departments to 1,300 stores from 270 stores in February.
Former Home Depot exec joins lighting company
TCP, the Aurora, Ohio-based manufacturer of energy efficient lighting products, has announced that industry veteran Jorge Fernandez will be joining the company in the position of SVP business development. Fernandez comes to TCP from Home Depot, where he led the company’s energy efficient lighting category.
“Jorge will immediately assume the critical role leading our LED product strategy and also manage our emerging markets development, focused on our rapid expansion in Latin America," said Ellis Yan, CEO of TCP. "Jorge brings a tremendous wealth of knowledge and expertise, particularly in the LED lighting segment, and he is recognized as one of the industry’s leading experts on energy efficient lighting."
Fernandez came to Home Depot in 2003 as a part of their management development program, where he was an associate in the Internal Audit Leadership Program. He rose through several positions of increasing responsibility in merchandising, eventually assuming his most recent position as senior merchant of LED product development.
While at Home Depot, Fernandez led the retailer’s entry into the energy efficient and LED lighting category. Prior to that, he worked for AT&T (formerly BellSouth Telecommunications) as an engineering project manager in their networks division.