Constancy in a World of Change
Store environments constantly require fresh new looks and updated designs. One of the biggest challenges retailers face is consistently executing changes across hundreds, sometimes thousands, of locations while maintaining the integrity of their brand. Rick Davis, founder and CEO of Dallas-based DAVACO, talked with Chain Store Age senior editor Connie Gentry about how his company helps retailers with the rollout of multiple store openings and with the three “R’s” of store design: resets, retrofits and remodels.
Chain Store Age: How do resets, retrofits and remodels differ?
Rick Davis: Resets typically involve the merchandise and fixtures in a portion of the store; for example, we do this frequently in the designer sections of department stores such as Tommy Hilfiger and Liz Claiborne.
Retrofits involve merchandise, fixtures and graphics in more than one area, possibly the entire store. For example, we converted hundreds of Eckerd stores to the CVS brand and we were completing the rollout at a rate of 70 stores a week.
Remodels usually entail major changes storewide including possible structural changes like moving walls or replacing floors—extensive modifications that require working with subcontractors—as well as replacing fixtures and merchandise throughout the store.
CSA: What is the best way for retailers to manage design changes across their portfolios?
Davis: Most retailers would be paralyzed if they tried to manage national rollouts internally, so they typically outsource. The biggest problem with outsourcing is that it is not uncommon for a retailer to hire one company, that hires another company, that hires another company…and it just goes on and on so the actual work is not done by the company the retailer hired. What sets DAVACO apart from other service providers is that we are an employee-based company. There are 600 DAVACO employees nationwide who work exclusively on our clients’ projects and travel from store to store ensuring that projects are completed exactly as promised.
CSA: Do stores typically remain open while these projects are under way?
Davis: The majority of the time our field execution teams operate in an open-store environment. That open-store environment is another reason we are committed to being an employee-based company. It takes a special kind of professional to be able to manage projects without interfering with store operations. When projects are conducted during store hours, there are two groups of customers to satisfy: the shoppers in the store as well as the retailer’s store managers and regional managers.
CSA: The retailers you work with are experiencing a high volume of growth. What should retail executives focus on to successfully manage growth across their portfolios?
Davis: Hiring quality people. At the end of the day, the people you hire represent your brand. If you compromise and don’t hire the best, your entire company will be compromised.
CSA: In today’s competitive, fast-paced market, what is the biggest challenge retailers face when they embark on high-volume rollouts of new store designs?
Davis: Logistical challenges caused by the considerable consolidation in the retail industry and increased global sourcing of fixtures. As a result, retail service providers have expanded their service role to include the management of these processes.
Another challenge, given the constant need to change the face of retail, is the increasing need for speed-to-market while maintaining brand consistency in store locations across the country. With a nationwide employee base, we are able to offer our clients efficient execution of high-volume projects, while maintaining consistency in each store so that brand identity is never compromised.
CSA: There appear to be several instances where DAVACO partners with retailers to support worthwhile causes—such as securing store fixtures and providing labor for the design and buildout of a teenage-pregnancy-center retail store. Is working on projects like this something you feel strongly about?
Davis: Absolutely. We work with all our major brands when asked to help and we are quick to support [causes] with resources, materials and dollars. We have annual [programs] with many of our retail partners including the Lowe’s Education Charity, the CVS Charity Classic and The Limited’s Wexner Center Foundation.
Victoria’s Secret Names New CEO
Columbus, Ohio, Limited Brands Inc. on Monday announced that Lori Greeley will replace Grace Nichols as CEO of Victoria’s Secret Stores. Greeley is currently executive VP and general merchandising manager of intimates for Victoria’s Secret.
The retirement of Nichols, a 20-year Limited veteran, from the CEO post was announced in May 2006. She will take a new role supporting initiatives within Victoria’s Secret, including the growth of its Intimissimi brand.
Additionally, Mark Weikel, COO of Victoria’s Secret Stores, will add the title of president.
Wal-Mart to Focus on Expanding Seiyu
New York City, Wal-Mart Stores is open to acquisition opportunities in Japan, but the retailer is more focused on expanding business at its 53%-owned Seiyu chain, according to a report by Reuters. Shares of Seiyu jumped Monday after Wal-Mart vice chairman Michael Duke told the Nikkei business daily that the company might look for more acquisition opportunities in Japan.
The paper reported that Duke welcomed planned changes in corporate laws in May that will enable foreign companies to buy Japanese firms through share swaps.
Wal-Mart last year tried to invest in superstore operator Daiei Inc., aiming to boost its presence in the country, but it lost the chance to Aeon Co., Japan’s second-biggest retail group.
Wal-Mart entered the Japanese market in 2002 by taking a small stake in Seiyu. It has since invested more than $1 billion in the chain, but has yet to return the retailer to profitability.
Wal-Mart spokeswoman Amy Wyatt said Wal-Mart’s focus in Japan is on Seiyu.
“It’s a very sizable business today, so we still think that there are a lot of growth opportunities in the existing business,” she said.
In terms of acquisitions, she said: “I wouldn’t go as far as to say we’re shopping for them.”