The Perfect Fit
Chico’s has created a niche catering to women 35 and older, helping them coordinate and accessorize wardrobes in sizes (0-3) that make them feel good about themselves. Service is paramount to the chain’s success. In none of the chain’s close to 600 stores will a customer find a mirror inside an individual fitting room.
Chico’s believes that by having the customer walk out of the fitting room to stand in front of a common-area mirror, the sales assistant can influence her choice of apparel and accessories.
It’s hard to argue with Chico’s successful formula, yet a new study by Chain Store Age and Leo J. Shapiro & Associates on fitting rooms, lighting and flooring suggests that for most retailers, adding a mirror would go a long way toward making the shopping experience more appealing.
Asked to imagine an ideal fitting room and what it would take to make it perfect, 29% of respondents to a national survey said a mirror, more mirrors or a three-way mirror. The desire to view oneself trailed only seating (46%) in its appeal to shoppers.
Overall, consumers said they preferred fitting rooms that could accommodate two people at once, had doors vs. curtains and had mirrors inside rather than outside. They also opted for private rather than communal fitting rooms. They’d rather not have a limit on the number of garments they brought into the fitting rooms. And they’d rather not be bothered returning unbought garments to the racks.
The data comes from a February 2007 national sample telephone survey of 813 consumers age 16 or older. It is part of an ongoing series of consumer studies conducted by Chain Store Age and Leo J. Shapiro & Associates of Chicago.
Home Depot Projects Lower Profit in 2007
Atlanta, The Home Depot Inc. said Wednesday it will pump $2.2 billion into improving its business this year even as it expects lower earnings and slim sales growth. Home Depot said that for fiscal 2007 it expects sales growth in the range of flat to an increase of 2%, a decline in comp-store sales in the middle single digit percentages and an earnings per share decline of 4% to 9%.
Including the effect of a 53rd week in its fiscal year, consolidated sales are expected to increase by 1% to 2%, and earnings per share are expected to decline by 3% to 8%, Home Depot said.
CEO Frank Blake told investors at Wednesday’s conference that like last year, “2007 also will be a difficult year.” But he said it will be a year of focus on Home Depot’s priorities and a year with “hopefully less noise.”
The “noise” was apparently a reference to the investor furor over former CEO Bob Nardelli’s hefty compensation in light of the company’s lagging stock price. Nardelli resigned in early January after six years at the helm of the company. He took with him a severance package valued at $210 million.
To improve its business, Home Depot said it will invest $2.2 billion this fiscal year in key priorities, including the opening of 115 stores. The investment includes $1.6 billion in capital spending and $600 million in expense.
Home Depot said it will recruit master trade specialists, simplify its staffing model, use more technology to aid customer service, and redesign employee compensation and reward plans. It also will invest in new merchandise and review its pricing strategies. Additionally, the chain will spend money on customer loyalty programs, direct-ship programs, credit programs and other specialty sales initiatives.
Federated Plans Name Change
New York City, Federated Department Stores on Tuesday said it would ask shareholders to approve changing the company’s corporate name to Macy’s Group Inc. A vote to amend the corporation’s charter to accommodate the new name will be held in conjunction with Federated’s annual meeting on May 18. If approved, the company will be known as Macy’s Group Inc., effective June 1. The move comes on the heels of the company changing most of its store nameplates to Macy’s.
“Macy’s Group is the appropriate name for our company, given that about 90% of our sales involve the Macy’s brand. That said, Bloomingdale’s is—and will remain—a very important part of our company,” said Terry J. Lundgren, Federated’s chief executive. Federated Department Stores also said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings. For the quarter ended Feb. 3, net income rose to $733 million from $699 million the prior-year period. Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 “duplicative” store locations. Comp-store sales rose 6.1% in the quarter.
During the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.
The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.