News

Painting a bright future with premium lines

BY CSA STAFF

Paint has become a high priority at Lowe’s, and the retailer has positioned itself as a destination for consumers through deals with premium suppliers and name brands like Valspar and Martha Stewart Living that debuted in stores this year.

At a Merrill Lynch retailer conference held this spring, Lowe’s president and coo Larry Stone said paint is a category Lowe’s has “wrestled with for a number of years” as it tried to make paint and paint supplies a bigger part of its business.

According to the Home Improvement Research Institute, Lowe’s has made steady gains in paint sales during the past decade, and even eclipsed Wal-Mart. According to a 2005 HIRI study, 18.4% of consumers surveyed chose Lowe’s as their destination of choice for paint products (up from 5.2% in 1995) compared to 15.1% for Wal-Mart. But they were well behind industry leader The Home Depot, which was named by 31.1% of consumers surveyed.

To keep that momentum going, Lowe’s made a move this spring to eliminate its Signature, American Tradition and Duramax paint and coating brands and placed them under the Valspar banner. Lowe’s executives said the move makes it easier for shoppers to find what they’re looking for and gives the Valspar name more cachet.

During a fourth-quarter earnings call earlier this year, the Valspar deal was described by Stone as something that would give Lowe’s a national brand we could hang our hat on.

“We looked at all the different brands that were available and came back with the strategy,” said Stone. “We felt like this was the best brand available to the marketplace and that we could really put some leverage behind it and gain market share.”

And the feeling is mutual at Valspar. Shortly before the line of Signature Colors, Ultra-Premium and Door Max paints debuted at Lowe’s, Valspar ceo Bill Mansfield said he hoped the deal would help the company “build a $1 billion consumer paint brand.”

That thinking also played a part in Lowe’s deal with Martha Stewart Living to carry a branded line of interior and exterior paint in stores. Martha Stewart Colors debuted at Lowe’s in early 2007 with a 350-color paint palette and color cards created by Martha Stewart. The paint also carries a fairly affordable average price of $25 per gallon.

Martha Stewart Living president of merchandising Robin Marino said partnering with Lowe’s is part of the company’s growth strategy to “expand our merchandising business segment, which includes home building, home decorating and home improvements.” Until the exclusive with Lowe’s, Martha Stewart Colors was available at rivals like Menard’s, Sears/Kmart and Orchard Supply stores.

For Lowe’s, the paint line will expand its roster of exclusive products and help give it a competitive edge. “It will be carried only at Lowe’s and will replace all existing Martha Stewart paint programs,” said Stone.

And the paint strategy fits well with Lowe’s efforts to target female shoppers with its clean, well-lit stores with wider aisles. According to an internal study by Lowe’s, women make the buying decisions in 80% of all painting projects.

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Nike names new brand management vp

BY CSA STAFF

BEAVERTON, Ore. Nike Thursday announced that Ken Dice has been named vp of USA brand management.

Most recently, Ken held the position of evp of marketing for Discovery Communications. For the last three and a half years, he led the marketing teams for The Discovery Channel, The Learning Channel, The Animal Planet, The Travel Channel, and eight other cable television networks. Under Ken’s leadership, the teams have strengthened and focused their connection with key consumer audiences. Dice reports to Craig Cheek, vp and general manager of Nike USA.

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Gottschalks misses sales goals

BY CSA STAFF

FRESNO, Calif. Gottschalks Inc. today announced that same-store sales for the month of June decreased 4.3% from the prior year. Total sales for the month decreased 5.8% to $57.5 million from $61 million in June 2006. On a year-to-date basis, same-store sales decreased 2.1% from the same period of the prior year. Total sales for the year-to-date period decreased 3.1% to $245.7 million compared to $253.5 million for the same period of fiscal 2006. The company operated three fewer stores in the month and four fewer stores for the year-to-date period compared to the same periods of fiscal 2006.

Jim Famalette, president and ceo of Gottschalks said, “Our sales performance in June did not meet our expectations. Our best areas were dresses, shoes, children’s and cosmetics, which benefited from a special event during the month. Despite good results in these categories, we experienced softness in a number of apparel categories as well as in our home store merchandise. We ended the month with comp-store inventory 1% below the same period last year. Based on our combined results for May and June, as well as the current retail environment, we now expect to incur a loss for the second quarter and anticipate the full fiscal year earnings will be below those of last year.”

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