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J.C. Penney Thinks Big

BY Marianne Wilson

J.C. Penney Co. is aiming to be a major player in a growing market niche — men’s big and tall — that is estimated to be a $6 billion-plus annual business. The segment is expected to grow 25% in the next decade. 


The chain’s new specialty menswear concept, The Foundry Big & Tall Supply Co., made its retail debut in May, opening 10 stores in a mix of in-mall and lifestyle centers in the Dallas and Kansas City, Mo., regions. By 2013, the fledgling business is expected to have expanded to 100 locations, with the number expected to triple to 300 stores within five years. 


The Foundry is the first initiative from Penney’s Growth Brands Division, launched in late 2010 to pursue high-potential opportunities in retail. Growth Brands initiatives have no external association with — and are separate from — the company’s namesake brand. But they are able to leverage Penney’s logistics, IT, merchandising, marketing, planning and allocation, and other back-office capabilities. 


The new concept offers an extensive head-to-toe assortment of menswear, with sportswear in sizes 1XL to 6XL and XLT to 5XLT and suits up to size 54L. (Even more extended sizes are available on the company’s website.) Shoes run from 10 regular to 16 wide. Price points range from $20 to $35 for a T-shirt to $175 to $200 for specialty suit coats. 


The selection includes casual, contemporary and traditional styles, and combines the retailer’s own private brand (mostly basics) with such national brands as Calvin Klein, Cole Haan, Geoffrey Beene, Levi’s, Callaway, Izod, Timberland and Marc Ecko Cut & Sew. Licensed team apparel and active wear give each store a local feel. 


Key to The Foundry’s strategy, and its appeal, is its distinctive shopping environment, which is designed to make big and tall men feel comfortable. The store design was a collaborative effort between Penney and the Seattle-based retail design firm Callison.


“Inspired by the look of a microbrewery, The Foundry Big & Tall Supply Co. stores feature an urban, industrial design where customers can relax, enjoy themselves and shop some of the biggest names in menswear — in sizes that fit,” said Steve Lossing, president, The Foundry Big & Tall Supply Co., Plano, Texas. A 20-year menswear veteran, Lossing has served with Penney in various management roles since 2002. 


With an average footprint of approximately 5,000 sq. ft., The Foundry has an urban, industrial look, with concrete and wood flooring, brick walls, exposed ceilings, and steel and wood fixtures. The space has a masculine feel, enhanced by such accents as big-screen televisions tuned to sports programming and a poker table. 


“In determining the design attitude, we identified familiar places where the big and tall guy feels comfortable,” Lossing explained.


The layout is divided into three distinct areas: the porch, the lounge and the loft. Customers enter through a porch area, which has open, exposed ceilings, and tile floors with a concrete look and feel. The modern collections are merchandised on one side of the floor, and traditional collections are on the other. This area also houses a bar-inspired customer service center and checkout.


The middle of the interior houses the lounge.


“It’s a great area for customers to hang out and relax, with worn wood floors and walls, and a drop-down ceiling with large, comfortable club chairs and ottomans, a large flat-screen TV and a unique poker table fixture,” Lossing said. T-shirts, denim/jeans and shorts also are merchandised in this area.


One of the most unusual design elements is the fitting room area, or “Tank Room,” which is located across from the lounge. 


“There are three fitting rooms, and they have the industrial appearance of large copper cylindrical brewery tanks, with sliding doors and piping handles,” Lossing said. 


The back third of the store, the loft, has open, exposed ceilings and a large red brick back wall featuring The Foundry logo. In addition to shoes, accessories and other goods, this area offers licensed team apparel and active wear — and a second large flat-screen TV.


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Increased Efficiencies

BY Marianne Wilson

Retailers that sell gasoline have long been challenged to maintain margins and reduce costs related to retains and run-outs and other operating expenses. It’s even more of a priority today, given the volatile fuel market and increased competitive pressures. 


Cumberland Farms, the largest convenience store and gasoline retailer in the Northeast, has streamlined its fuel operations and optimized its fuel inventory by deploying FuelQuest Fuel Management System (FMS), an end-to-end fuel supply chain solution focused on reducing the cost of procuring, managing and accounting for bulk fuel.


“We wanted a solution to centralize our fleet scheduling for inventory-managed stores and dealers as part of our overall fuel strategy,” said Greg Scott, senior VP, terminal operations and petroleum distribution, Cumberland Farms, Framingham, Mass. 


The Web-based solution allows Cumberland Farms’ dealers to place orders online, Scott explained, and automates replenishment planning for both low-volume and high-volume inventory-managed sites, increasing dispatcher efficiency. 


“Previously, we used an in-house developed system, whereby store operators would call in and we would enter their inventory,” he added. “It was a manual system.” 


The FMS system automates all aspects of the fuel-management process, providing Cumberland Farms with a complete platform to manage its fuel operations. With FMS in place, the chain has been able to optimize its fuel-holding strategy, improve its demand forecasting and maintain more accurate inventory. The company can now dispatch 300 to 350 loads per shift (there are two shifts per day). 


“FMS allows our dealers to place orders online and automates replenishment planning for both low-volume and high-volume inventory-managed sites,” Scott added. “It increases our dispatcher efficiency, while reducing unplanned splits.” 


Indeed, fewer retains (when a driver has to take back gas) and run-outs have been among the biggest benefits of the system, according to Scott, along with more accurate forecasting. 


“The FuelQuest system is very dynamic, and it makes adjustments for things like weather emergencies,” he said. 


Better inventory management is another key advantage.


“Historically, you have more inventory in the ground than you really need,” Scott explained. “But now we are able to adjust back to actual sales, which significantly reduces the amount of money we have in the ground.”


Scott said he expects the improved inventory management and more accurate dispatching of trucks, resulting in fewer miles driven, will provide Cumberland Farms with significant savings going forward.


“I expect a relatively high cost saving,” Scott said. “Initially, it will be based on time management, delivery accuracy, and the like, which are efficiency improvements.” 


Most recently, the chain added to its overall fuel management strategy by purchasing FuelQuest’s ForeSite, a support tool that provides visibility into fuel inventories. It will allow Cumberland Farms real-time, map-based views of its fuel inventory in some 1,040 Cumberland sites across 11 states. ForeSite’s capabilities also include exception monitoring via early warning indicators of non-compliant inventory conditions.


“With ForeSite, we can quickly determine the health of our fuel network and identify trends and problem areas,” Scott said. “We can also drill down into detailed site, tank and fuel inventory information.”


REACTION: Field reaction to the automated fuel management system has been mostly positive.


“Our store managers like that they no longer have to go and manually stick tanks for inventory readings,” Scott said. 


As with any technology, the initial deployment brought with it some frustration. 


“There was some fine-tuning, which wasn’t surprising given all the details and data,” Scott said. “But FuelQuest has been right on top of everything.” 


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Hot Retailers

BY Katherine Boccaccio

A women’s lifestyle apparel brand born on the Web, a fast-growing burger eatery, a discount German supermarket chain and a homegrown watchmaker are the 2011 recipients of the International Council of Shopping Centers’ Hot Retailers awards. 


The annual honors, based on a survey of more than 55,000 ICSC members worldwide, are designed to recognize innovative retail concepts. 


Here’s a brief look at this year’s winners:


Athleta: Founded 12 years ago and acquired by Gap Inc. in 2008, Athleta has evolved into a premier women’s active lifestyle brand, with apparel for yoga, running, swim, gym, hiking and skiing. 


Previously available only via catalog and online, Athleta officially entered the retail space early this year, opening in San Francisco’s fashionable Pacific Heights neighborhood. The 5,000-sq.-ft. store has an inviting and comfortable feel, and showcases the brand with inspirational imagery. 


Two additional locations are on tap for this summer, both in New York City, with a goal of 50 stores across North America by 2013. At presstime, Athleta was reportedly on track to open two stores in Southern California in the fall.


Smashburger: With 100 locations nationwide, Smashburger is on the fast track. Founded in 2009, the Denver-based, fast-casual restaurant company plans to open 85 stores in 2011, and is targeting 500-plus units in the next few years. While franchising is key to its growth, corporate-owned stores and joint-venture partnerships are also part of its strategy.


International expansion also figures into Smashburger’s plans, as it aims to be the No. 1 global “better burger” brand. It expects to open its first global location this year. 


Aldi: With more than 1,100 locations in 31 states (and 8,000 stores worldwide), privately held, German discount grocer Aldi ranks as one of the nation’s fastest-growing food retailers — a distinction it has achieved without merger or acquisition. 


A model of efficiency, Aldi trades only in essential supermarket services. The chain is known for its low prices and edited selection of some 1,400 items, 95% of which are sold under its own private labels. 


With the bulk of its U.S. stores located primarily from Kansas to the East Coast, Aldi still has plenty of room for expansion. It plans to open 80 U.S. stores this year, and recently entered two new markets: Dallas/Fort Worth and South Florida. In February, Aldi opened its first location in New York City. 


Fossil: Fossil is best known for its namesake watches, the business that started it all in 1984, but in recent years the company has moved far beyond its roots. Today, Fossil markets an array of branded fashion accessories, from handbags and jewelry to sunglasses and, most recently, women’s shoes. 


But timepieces remain Fossil’s bread and butter, and here too, the company has expanded its reach. Fossil still produces its own Fossil, Relic and Zodiac brands, but also has licenses to make watches for a number of designer labels, from Michael Kors to Burberry. 


Fossil’s products are sold in department stores, specialty shops, and specialty watch and jewelry stores across the globe. The company also distributes its products in more than 360 company-owned retail stores and through its e-commerce channel. 


For 2011, Fossil’s primary initiatives are to accelerate its direct-to-consumer channel expansion and grow its international watch businesses, with a major focus on Asia. Plans include opening 80 to 85 stores worldwide.


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