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Retail World Unites at SPECS

BY CSA STAFF

The mood was upbeat and spirits were high at Chain Store Age’s 43rd SPECS conference. The annual event, held this year in Lake Buena Vista, Fla., attracted retailers, architects, designers and contractors from around the country, who came together to share ideas and discuss challenges and opportunities.

The program balanced inspiring keynote presentations, targeted educational workshops and a vibrant exhibit floor (the Solution Center) that offered the latest in store planning, construction and facilities-management products and services.

The event attracted all segments of the retail industry, from specialty apparel chains to supermarkets to discounters. Some of the chains in attendance included The Home Depot, Wal-Mart Stores, Limited Brands, Payless ShoeSource, Rite Aid, Wegmans Food Markets, Advance Auto Parts, Bass Pro Shops and The Bon-Ton Stores.

Specialty food and restaurants were well-represented by such operators as Starbucks Coffee Co., BUCA, Ruth’s Chris Steak House and Chipotle Mexican Grill. A complete list of the retail chains and other companies, including suppliers, at SPECS/2007 starts on page 212.

This year’s educational program kicked off with an insightful, pre-conference presentation on personal development. The regular program offered workshop tracks in big-box construction, small-box construction, store planning and design, and personal development.

In addition, the agenda included a business strategy track, which provided attendees valuable information about new and innovative business trends that will impact their businesses in the coming years. A solutions track, 20-minute mini-sessions offered real-life solutions to real-life situations.

The SPECS tradition of business partnering and networking was very much in abundance at this year’s event. There was plenty of opportunity for both, on a formal and informal basis, throughout the show. Retailers and other attendees renewed old ties and forged new alliances at breakfast, during the workshops, over meals and at coffee breaks. Everyone had a chance to unwind at the evening receptions.

SPECS/2008 will be held March 9-12, at the Hilton Anatole in Dallas, and planning is already well under way. The program is being developed by the SPECS Advisory Board, which consists of retailers and suppliers.

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Weekly Retail Fix

BY CSA STAFF

THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT

BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions.

“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.

THE FIX: Differentiation would better help Sam’s

Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.

Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.

That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.

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BY CSA STAFF

THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%

WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers.

Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.

Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.

THE FIX: Improved shopper experience ups comps

Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.

Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.

Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.

Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”

He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.

“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”

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