NEW YORK — Carter Hawley Hale Stores Inc. will build private label to 25 percent of its women’s apparel inventory this year, as the retailer seeks to “take back the reins of control from the vendor community.”
That was the message from David L. Dworkin, CHH’s president and chief executive officer, on Monday at the opening session of the National Retail Federation’s 83rd annual convention, at the Sheraton and Hilton Hotels.
More than 2,000 people crammed a ballroom at the Sheraton for the presentation, which also included Arthur C. Martinez, chairman and ceo of the Sears Merchandise Group, who spoke about Sears’ strategies for reenergizing its business.
Dworkin said, “We have allowed the wrong type of thinking to shape our stores. There is too much emphasis on brand names instead of on a product idea.” He emphasized that CHH will still maintain strategic alliances with vendors but said, “We’ll be thinking for ourselves. Too many retailers have given up control to vendors. There is a focus on brands, not on what’s selling.”
Dworkin said one of the problems he encountered when he came to CHH was the bureaucracy and the company’s lack of connection with its customers. He pointed out that about 30 percent of the company’s customer base is Asian or Latino, a group he maintains is largely ignored by other retailers, and with whom CHH sees a big opportunity in its southern California and Southwest trading areas.
The company has launched multilingual programs, with in-store signs and bilingual associates and has started advertising in several languages. The company recently launched a radio campaign in Japanese and three Chinese dialects, as well.
After the session, Dworkin said the current level of private brands at CHH is “almost negligible — about 10 percent.” He added that most of the production will be domestic and said the increased emphasis on private label is because CHH buyers cannot find what they need in the market to cater to customer needs.
Martinez of Sears offered a progress report on the company’s five-year, $4 billion renovation program and its corporate restructuring plan, and he noted apparel has been on the receiving end of new space created by the renovations.
“Apparel generates about one-quarter of our revenues, but 60 percent of our profits,” he said. “We’d like to build that to 40 percent of our revenues over the next four to five years.” He added that cosmetics, fragrances, women’s special sizes and moderate apparel brands will be other areas Sears will be developing further. Sears will add about 12 million square feet of selling space during the course of its renovation program, or the equivalent of 120 stores, he said. The company is gaining space for apparel partly from rolling out Home Life freestanding furniture stores and hardware stores. The plan is to have 400 to 500 hardware stores in four to seven years, and 250 furniture stores.
Martinez said the key to Sears turning its business around has been to “break away from the past,” including closing the general merchandise catalog last year, drastically reducing costs to allow cutting prices and reorganizing the corporate structure to take more suggestions from employees and local management.